The year-end issue of CIO Magazine is dedicated to current trends in IT technology, such as innovation, employment, security or the evolution of the software industry. And it projects these trends into 2010. For each of these issues, the magazine offers two scenarios. Let's focus on IT jobs in the U.S. In the first scenario, at least 25 percent of the IT workforce would disappear, while in the second one, the population of IT workers in the U.S. would be almost non-nexistent.
Here are some selected excepts.
Even as 2010 will see a further movement of some IT activities -- application development, legacy maintenance, call center operations -- overseas (Forrester Research estimates that the cumulative number of IT jobs heading abroad will grow from 27,171 in 2000 to 472,632 in 2015), U.S.-based companies will keep work here that requires close contact with the business: strategy development, business process improvement and the actual application of IT to the business.
[Please note the extreme precision of Forrester's forecast: they certainly used a spreadsheet and forgot to round their results!]
So what jobs will go overseas?
"Commoditized work will go overseas," says Peter Cappelli, director of the Center for Human Resources at The Wharton School of the University of Pennsylvania.
It's hard to argue for keeping certain IT work stateside. The salary for a programmer with two to three years of experience averages $7,500 in India, according to NeoIT, an offshore consultancy. In Russia, it's $10,000. In the United States, it's $65,000.
But other jobs will stay in the U.S.
By 2008, the IT workforce situated in the United States will be 25 percent smaller than it is today, according to Gartner. But the workers who remain will be more important to the business than ever. They'll be working on architecture, strategy, project management and business processes, predicts Lance Travis, vice president of outsourcing strategics for AMR Research.
So, what to expect if you're currently an IT worker?
Diane Morello, a vice president and research director at Gartner, predicts that those who remain in the field will become "IT versatilists, equally at ease with technical and business issues." Travis of AMR Research calls them 50/50 professionals. Fairchild Semiconductor's Watkins brings up a similar picture: "The IT cohort of the future has to be a good technologist and protector of technology, but also be a savvy businessperson."
And if your children want to graduate in computer science, will they have a good salary?
Despite downward pressure on U.S. IT salaries (the average compensation for tech workers grew just 1.7 percent from 2001 to 2002, while inflation was 2.2 percent, according to the Economic Policy Institute), experts expect wages to stabilize. But IT workers hoping for the fat paychecks and big bonuses of the past will be sorely disappointed. Normal cost-of-living increases and enough lift to keep up with other corporate positions are more likely, agree Intel CIO Busch and SIM's Markle.
While this first scenario doesn't give a rosy picture, look at the second.
It's 2010. TaTa Consultancy Services has made New York City its de facto worldwide headquarters and opened more than 100 satellite offices around the country. No longer simply a provider of lower-level application development and maintenance work based in Mumbai, India, TaTa now provides high-level consulting and business process improvement, overtaking IBM Global Services as the leading IT services provider in the States—and the world. The company has hired a recent Nobel Prize winner to head up its burgeoning R&D business, and rumor even has it that a recently out-of-work Sam Palmisano, formerly CEO of IBM, was sniffing around for a position there.
Scary, isn't? But perfectly plausible.
"If Indian firms set up shop in the U.S., that's where the real threat happens," says N. Venkatraman, Boston University School of Management's IS department chairman. "You no longer have to fly someone over from India. You now have someone who's worked for the EDSs and Accentures, and now just carries a TaTa business card."
If this is bound to happen, what would be the impact on the U.S.?
Once the number of jobs available to skilled U.S. IT workers dips below a certain level and the salaries being offered hit rock bottom, "Americans just aren't going to go into the profession anymore," Matloff says. And that bodes ill for CIOs' ability to get the job done at their companies and for their own future clout in corporate America. Wholesale offshore outsourcing would also be a disaster for America's leadership in IT innovation.
Please read the whole issue of CIO Magazine online for more details. Or better, grab a copy at a newsstand and keep it to read it again in 2010.
You also can read this former post, "Can You Pay U.S. Programmers at Overseas Salaries?" to see what's already happening in 2003.
Source: CIO Magazine, December 15, 2003 - January 1, 2004 Issue
12:34:54 PM
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