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February 23, 2006

ACM Job Study: Despite Offshoring, IT Job Growth Should be Strong

CRA affiliate organization, the Association for Computing Machinery, today released the results of its year-long, comprehensive study on the globalization and offshoring of software. The study contains six key findings:

  1. Globalization of, and offshoring within, the software industry are deeply connected and both will continue to grow. Key enablers of this growth are information technology itself, the evolution of work and business processes, education, and national policies.
  2. Both anecdotal evidence and economic theory indicate that offshoring between developed and developing countries can, as a whole, benefit both, but competition is intensifying.
  3. While offshoring will increase, determining the specifics of this incrase are difficult given the current quantity, quality, and objectivity of data available. Skepticism is warranted regarding claims about the number of jobs to be offshored and the projected growth of software industries in developing nations.
  4. Standardized jobs are more easily moved from developed to developing countries than are higher-skill jobs. These standardized jobs were the initial focus of offshoring. Today, global competition in higher-end skills, such as research is increasing. These trends have implications for individuals, companies, and countries.
  5. Offshoring magnifies existing risks and creates new and often poorly understood or addressed threats to national security, business property and processes, and individuals' privacy. While it is unlikely these risks will deter the growth of offshoring, businesses and nations should employ strategies to mitigate them.
  6. To stay competitive in a global IT environment and industry, countries must adopt policies that foster innovation. To this end, policies that improve a country's ability to attract, educate, and retain the best IT talent are critical. Educational policy and investment is at the core.
The report is pretty weighty, but the executive summary (pdf) does a good job of laying out the central findings in more detail. This issue of job migration is a huge concern within the discipline and there's lots of FUD spread around on both sides of the debate, so having a report from a respected professional organization like ACM, generated by a Task Force with representatives from academia, industry, government, economics and labor should go a long way towards putting both sides on some firmer ground.

There's been pretty good coverage of the report already. First, ACM's U.S. Public Policy Committee has its press release and blog post. The New York Times' Steve Lohr had the first coverage of the report this morning. Lohr's piece highlights one of the key messages to come out of the study:

The study concluded that dire predictions of job losses from shifting high-technology work to low-wage nations with strong education systems, like India and China, were greatly exaggerated.

Though international in perspective, the study group found that the most likely prognosis for the United States would be that 2 percent to 3 percent of the jobs in information technology would go offshore annually over the next decade or so.

But more jobs will be created than are lost in the future, they said, as long as the industry in America moves up the economic ladder to do higher-value work typically, applying information technology to other fields, like biology and business. They noted that employment in the information technology industry was higher today than it was at the peak of the dot-com bubble, despite the growth of offshore outsourcing in the last few years.

"The global competition has gotten tougher and we have to run faster," said Moshe Y. Vardi, co-chair of the study group and a computer scientist at Rice University. "But the notion that information technology jobs are disappearing is just nonsense. The data don't bear that out."

Yet the view that job opportunities in computing are dwindling fast is both common and potentially damaging to America's competitive prowess, according to David A. Patterson, president of the Association for Computing Machinery.

He pointed to the declining interest in computer science as a major among American college students, based on a survey last year of the intentions of students entering college. The results suggested that only 1 in 75 students would major in computer science, compared with 1 in 30 in 2000.

"The perception among high school students and their parents is that the game is over that all computing jobs are going overseas," observed Mr. Patterson, who is a computer science professor at the University of California, Berkeley. "It's an extraordinarily widely held misperception."

The concern, he said, is that misplaced pessimism will deter bright young people from pursuing careers in computing. That, in turn, would erode the skills in a field that is crucial to the nation's economic competitiveness.

The report also saw coverage in CNN's Money which was subsequently Slashdotted. I'm sure there will be additional coverage of the report in the coming days.

I'm pleased that a number of CRA volunteers were able to serve on the Task Force, including CRA board members Bill Aspray (who served as the Task Force's Executive Consultant), Moshe Vardi (the TF Co-Chair), Bobby Schnabel, and Dick Waters, as well as Vijay Gurbaxani, who serves on my Government Affairs Committee, and Stu Zweben, who is instrumental in putting together CRA's Taulbee Survey. The study was an enormous undertaking, so kudos to ACM for making the effort to advance the debate. The study deserves to be read.

Posted by PeterHarsha at February 23, 2006 07:05 PM
Posted to Policy