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The Supply of Information Technology Workers in the United States

Chapter 2: Information Technology Workers

What Is Information Technology?

This report uses the terms 'information technology' and 'information technology worker' because they are used in the national discussions about these labor issues. Unfortunately, these terms are somewhat imprecise and are used in different ways at different times. Figure 2-1, taken from a dated but still useful study by John McLaughlin and Anne Birinyi, gives a broad definition of the 'information business.' From this figure, one could infer a broad definition of information technologies that would include, among many others, computers, telephones, radios, televisions, books, and filing cabinets. This report does not use such a broad definition.

In this discussion, information technology (IT) refers only to computer-based systems. It includes computer hardware and software, as well as the peripheral devices most closely associated with computer-based systems. We define 'computer-based systems' broadly to include the full gamut of technological considerations, ranging from the design and production of chips (for example, Intel is widely regarded as an IT company); through the design and creation of complex, computer-based systems for a particular application (the modernization of the U.S. Internal Revenue Service tax-processing system was certainly considered to be an IT problem); to the end-use of such systems (most of the electronic commerce startup companies are considered to be part of the 'IT revolution,' at least for the purpose of tracking and reporting).

There is a certain amount of ambiguity to this definition. To clarify, it may be helpful to compare it with some other commonly used terminology and concepts. The term 'information system' is sometimes used to refer to computer-based systems that provide information for decisionmaking in organizations, which results in the use of 'information technology' and 'information systems' in closely related ways. This usage (e.g., "He heads up the corporation's IT operations") focuses on the purpose of the system rather than its underlying technology. In this report, the underlying technology of an information system (as used in the example above) is considered to be an example of information technology. The definition of information technology, however, is not restricted to any particular application area. Indeed, one of the attributes of information technology that makes it worthy of study is its pervasiveness in society.

There may be as many as twenty academic specialties that study various aspects of information technology and its use and applications (see table 2-1). Box 2-1 and the accompanying text in chapter 5 lists and reviews definitions of nine of these disciplines compiled by a National Research Council (NRC) study panel in the early 1990s. Only the three most popular IT-related disciplines-computer science, computer engineering, and information systems-will be considered here. In a strict sense, computer science is focused on the study of algorithms, the software that implements them, the properties of computers, and the processes for creating these technologies. Computer engineering traditionally has focused on the engineering of the components and hardware systems that make up a computer. In this strict sense, it focuses on the underlying technology that implements computer hardware. Information systems, although less well defined as a discipline of study, has focused instead on the use of computer technology for end-purposes related to decisionmaking of some kind. All three of these disciplines capture some aspects of what we regard to be information technology, but none of them covers all aspects.

In the past decade, and even more rapidly in the past five years with the spread of the Internet, the rapid merging of traditional communications and computer-based systems has added to the confusion. Although most telecommunications technology has been computer-based for some years, the rapid miscegenation of the functionality of computers and of traditional communications systems has come to the forefront. The ability to make telephone calls over the Internet or make computations via a Web page devoted to a particular topic, or the provision of greatly increased content (such as bank account information) using a traditional telephone hookup, are examples. There is no precise boundary between information technology and telecommunications technology. Some cases, such as the provision of enhanced, computer-based information services as part of standard telephone service, probably should be considered information technology; others, such as installing telephone lines in homes or fiber cables under the ocean, may not be.

Who Is an IT Worker?

Defining an IT worker is complicated, not only because information technology itself is not clearly defined. A wide range of occupations might be considered IT work. They vary enormously in the technical and other skills required to do the job. These jobs are not located solely in the IT industry (the industry whose primary business is to make and sell IT devices, software, services, and systems), and they do not always involve the design and creation of information technology artifacts. Instead, they are distributed throughout virtually every sector of society, including government, all sectors of industry, and most nonprofit organizations; and they may involve many people who propose, implement, enhance, and maintain systems that rely upon information technology. Not every job in an IT company is necessarily IT work (Are the janitors at IBM IT workers? We think not). Many jobs involve some contact with information technology, but not all would be considered IT jobs; otherwise, this category would soon become so large as to be useless.

It is not surprising that the different studies of the IT worker shortage have employed different definitions. As the Department of Commerce report noted:14

What is an IT worker? It depends on whom you ask. In a broad sense, the term 'information worker' can be applied to data entry personnel, auto mechanics who use computer diagnostic equipment, medical technicians who operate CAT scan equipment, and loan officers who use computers to assess creditworthiness, as well [as] computer programmers, systems analysts, and computer scientists and engineers.

Commerce used the narrow definition of the Bureau of Labor Statistics classifications: computer scientists and engineers, systems analysts, and computer programmers. The Information Technology Association of America (ITAA) used a broader definition: any skilled worker who performs any function related to information technology, which itself is defined as the "study, design, development, implementation, support or management of computer-based information systems, particularly software applications and computer hardware."15

The General Accounting Office (GAO) has noted how the lack of a good definition has caused problems in making good policy: 16

The GAO and Commerce Department research into the IT industry labor issue reveals that it is necessary to make a distinction between the IT industry as a whole and the various occupations within the industry. This distinction is often overlooked or is not clear in the data; there is often difficulty in identifying people who are working in IT occupations if they are not working for an IT business. If one asks what government or companies should do about the IT labor issue, the answers will be more apparent if the question is phrased more clearly. There is a substantial difference in salaries, employment opportunities, and labor supply by IT occupation. It is difficult to compare statistics that examine these issues because the studies use different definitions of occupations and therefore come up with widely different estimates of starting salaries, job vacancies, and labor supply.

An NRC report on computer professionals written in the early 1990s called for a simple classification scheme, which has yet to be supplied. 17 Jane Siegel from the Software Engineering Institute indicated: 18

I would be thrilled if in the next major national surveys...they did nothing more than simply have a logical, simple structure that broke out people doing computer-related work...If I could get even very rough estimates of the degree field and some simple demographics about who these people are and a little bit about their turnover rate and what they do in life, I would have a whole body of knowledge that I think would help a large set of our users.

Alan Fechter from the National Academy staff, following up Siegel's suggestion, "cautioned that although a moderate level of detail may be valuable for corporate planning, a greater level of aggregation may be appropriate for purposes of national planning and estimation." 19

This report will not attempt to provide the ultimate definition of an IT worker. However, two categorizations are presented that the study group believes can help with national planning and estimation. The first distinguishes IT workers from other kinds of workers who may sometimes use information technology in their jobs (see figure 2-2). Each IT-related occupation is located at a single point on the graph. As one moves from left to right, the occupations require increasing amounts of IT knowledge. As one moves from bottom to top, the occupations require increasing amounts of domain knowledge (knowledge of business practice, industry practice, technical practice, or other kinds of knowledge particular to an application domain). The diagonal line separates the IT-related occupations into two classes, depending on whether IT knowledge or domain knowledge is more important. If more than half the value provided by a worker involves his or her IT knowledge, then this person is considered to be an IT worker. If the person's occupation involves the use of information technology but it adds less than half the added value to the work, then we regard the person as an IT-enabled worker. A few occupations are plotted on the exhibit, as examples.

The second categorization focuses only on the IT workers. Table 2-2 differentiates four categories of IT workers, depending on the principal functionality in their occupation. The table includes examples of particular IT occupations that would fall under each of the four categories (conceptualizers, developers, modifiers/extenders, and supporters/tenders). 20

This approach is somewhat different from the Standard Occupational Classification (SOC) scheme used by the Bureau of Labor Statistics (BLS), 21 in which the categories are essentially a distillation of job titles. This study found it difficult to classify workers on the basis of what they are called, at least in a way that is helpful to making policy. It decided instead to return to first principles and figure out what the workers do.

The categorization is built from a developmental perspective of the world. It is based on an experience and familiarity with the IT industry, where the workers are responsible for creating IT artifacts. However, this categorization should also apply reasonably well to all kinds of IT workers in all sectors of the economy (i.e., to those who develop, use, and maintain systems driven by information technology), and it should provide insight into current policy issues regarding supply and demand.

This belief is bolstered by the fact that there is a reasonably good match between level of formal education and category of worker. Table 2-3 maps formal education onto the four categories. There is not an exact one-to-one correspondence between educational degree and category of work. However, the exhibit clearly shows a correlation. 22 Occupations that fall under the conceptualizer category are commonly populated with recipients of master's or doctoral degrees. Occupations that fall under the developer or modifier categories are usually filled by people with bachelor's or master's degrees-and in the case of the modifier category, sometimes by people with associate's degrees. Supporter occupations tend to be filled most commonly with people holding an associate's degree, or perhaps only a high school diploma. Chapter 6 discusses at length the fact that an increasing percentage of IT worker training is provided outside of formal degree programs. This kind of training provides valuable knowledge of specific technologies, company culture, and the practices within that industry. It also hones skills such as communications, teamwork, and self-learning. However, there is some question whether it can adequately replace the foundational knowledge acquired in the formal degree programs, which is critical preparation for at least some IT occupations.

In this report, the term 'IT worker' is used throughout and always in the general sense described above. However, many of the sources cited either use alternative terminology ('computer professionals,' 'computer scientists,' 'computer and information scientists,' etc.) or they have a different meaning of 'IT worker' in mind. In these cases, the source's terminology is generally used, and an effort is made to clarify the intended meaning in the contextual discussion.

How Many IT Jobs Are There, and Where Are They Located?

Table 2-4 shows the number of IT workers in the United States and the annual percentage change in employment, using data from BLS. 23 Over the period 1988 to 1997, employment in the IT occupations (as they define them) grew from 1,259,000 to 2,063,000 jobs-a 64-percent increase. This can be compared with an increase of 29 percent in all professional jobs and an increase of only 13 percent in the total workforce during this time. Over this period, IT jobs increased from eight to eleven percent of all professional jobs in the United States, and from 1.1 percent to 1.6 percent of all jobs in the United States.

As figure 2-3 shows, the vast majority of IT jobs as reported by BLS are in one occupational category (Computer Systems Analysts and Scientists). Over the period 1988 to 1996, this category has grown much faster (158 percent) than the category of Computer Programmers (9.8 percent), while the category of Operations and Systems Researchers has dropped by 4.3 percent. From 1988 to 1996, the number of Computer Programmers dropped from 570,000 to 561,000, but in 1997 the number jumped to 626,000 (an 11.6 percent increase in one year). This may be an artifact of the temporary demand created by the Y2K problem.

The IT industry (that is, the collection of companies that produce IT products, services, or systems as their principal business) is one of the largest and most dynamic industries in this country. The number of workers in the computer and software industries has almost tripled in the past decade. However, this sector is by no means the only industrial sector in which information technology is being produced or used, or the only place where IT workers are employed. Indeed, there are IT workers in virtually every sector of American society. Information technology is rapidly being infused into the financial, retail, manufacturing, service, entertainment, transportation, and other industries; and numerous IT workers are going to work for companies in those sectors (see table 2-5 for some examples of the use of information technology in American industry). IT work also occurs in every geographic region of this country, not just in high-tech centers such as Silicon Valley or Route 128 in Massachusetts. 24 Thus a shortage of IT workers affects not only the IT industry (hardware, software, computer systems, computer services firms), but virtually every sector of the American economy. 25 The Y2K problem drives this point home. Computers are so firmly woven into the fabric of organizations that Y2K is a problem for almost every corporation and every government organization, and every member of society is affected.

What Skills Does an IT Worker Need in Order To Be Effective?

An effective IT worker needs a variety of skills, including technical knowledge about information technology, business knowledge and experience, and organizational and communications skills. The mix of skills needed varies greatly from one IT occupation to another. For example, a person doing IT work for a producer of household appliances will probably need to know more about production and accounting than an IT worker who is building general-purpose software utilities for a company in the IT or communications industry. It is impractical to present a complete set of skills needed for all IT occupations, or even for a single IT occupation. But it is possible to make a few observations, using examples from software-related occupations.

In the technical area, there are skills as well as knowledge to be acquired. A programmer needs to know how to design, program, test, debug, and modify programs. Someone specializing in operating systems would need to know how to analyze basic hardware operations and how to deal with complex communications situations. In the performance-testing area, a good knowledge of statistics is useful. A worker would need to know how to measure and analyze performance information and how to modify programs to improve performance. In the project management area, the worker would need to understand the project management model for code development and testing, be familiar with industry standards such as ISO 9000, and be able to establish requirements and functional specifications. In the project estimation area, a worker would need the ability to determine how long a project will take, what resources will be needed, and what dependencies on others need to be satisfied.

IT workers also need to have business skills and experience, which in many ways are similar to those needed by people in other service professions. Many workers need the ability to formulate project budgets, set tasks within those budgets, and complete work within time and budget. A worker may need to be familiar with specific application programs, such as corporate and industry databases, operation support programs, or manufacturing support programs. There is a need for knowledge about the specific application industry and its vocabulary, such as knowing who the leaders are and keeping up with industry standards. The worker needs to have knowledge of the customer's concerns and how to meet them; for example, how the customers use the IT product, their need for future products, and how current projects meet these needs. Finally, the worker needs to know the business practices of the employer: how projects are started, led, and terminated; the steps in getting a product to customers; and how customer needs are collected, distilled, and spread through the company.

IT workers also need communications and organizational skills, similar to those required of any worker involved in technical project development. There are teamwork skills, such as the ability to work with others who have diverse educations, skills, backgrounds, and cultures; to understand the function of each team member; and to respect the strengths and limitations of others. The worker needs to be able to organize and present technical material to technical peers, management, and customers. Non-technical skills relating to technical specifications and documentation-such as the ability to work in a team to design a project implementation, the ability to write a clear description of the job of each person on the team, and the management skills to delegate tasks within the team-are also required. The worker must be able to work to and revise specifications, and work to deadlines. Finally, the worker should be able accurately to estimate rates of progress towards goals and be able to report problems early. Table 2-6 shows that different kinds of IT jobs require different mixes of these technical, business, and communications skills.

Where does one acquire these skills? University programs in computer science traditionally have taught some of the technical skills, but not the business and communications skills (although students sometimes acquired some of these latter skills through internships). The accreditation bodies CSAB and ABET currently make communication skills a required component of an accredited computer science and computer engineering program, but the accrediting organizations do not specify the department that is to teach the skills or how they are to be applied. Indeed, almost no accredited program's department actually teaches communications skills as a separate course, although most of them require the application of these skills in some computing courses. These skills may not yet be emphasized as much as industry would like, but the trend is in the direction sought by industry. Business skills are not well addressed in computer science or computer engineering programs, but they are addressed in information systems programs. 26 Graduates in other majors generally gain less technical training, but often they get a better introduction to communications skills and even industry knowledge. Technical schools and self-help courses tend to focus on the technical skills. Corporate training programs often focus on all three.

Why Is Information Technology Becoming So Prevalent in Our Society?

There are many reasons why information technology has become so prevalent in the modern world, and there is no indication that these reasons will fade any time soon. The processing power and storage capacities of semiconductor devices, which are the building blocks of information technology, have been doubling every eighteen months for the past thirty years. At the same time, prices have continued to decrease. This means that information technology, which can be programmed to do practically anything, has become embedded in many kinds of organizational and physical systems. IT products have become commodity items. General-purpose semiconductor devices, such as the microprocessor, can now be used for millions of different purposes, leading to economies of scale. These devices are much more reliable than the mechanical, vacuum tube, and transistor devices that they replace. They add value to the products in which they are used, and they reduce the need for human users to do dangerous or boring tasks. Vast improvements over the past decade in the connectedness of computers and in human-machine interfaces have driven new uses.

What does this growing prevalence of information technology in society mean for IT labor issues? It appears as though information technology will be an increasingly important part of the U.S. national economy for many years to come. Although there are likely to be increases in productivity through new technologies and other means, the production of information technology will continue to rely on a large and growing force of workers who require high levels of skill and knowledge to do their jobs effectively. An inadequate supply of such workers will have harmful effects on the economy and the wealth of the nation. Any tightness in the labor market is likely to become a shortage within a few years, as the demand for information technology-based products and services grows. From a policy perspective, the focus needs to be not only on achieving a proper match between supply and demand today, but also on how the nation will supply the growing number of appropriately trained IT workers in the future.

What Are the Characteristics of Information Technology That Affect IT Labor?

Information technology has a short life cycle. Figure 2-4 illustrates this short life cycle by charting the revenue earned by the Hewlett-Packard Company during four years in the mid-1990s. It shows that new products introduced in one year earn their greatest amount of revenue in the following year, and that by the second year after their introduction their contribution to the company's revenue stream has already diminished significantly. In fact, nearly two-thirds of Hewlett Packard's revenues are derived from products introduced in the previous two years. This is true of many other companies as well. The demands of competition, and the opportunities presented by technological advances, have driven the introduction of new products every few months, and an almost complete turnover of the product line in four years. This rapid turnover in technology makes it imperative that IT workers adapt to new technologies and new products. This means that they must continuously work at keeping their skills and knowledge up to date or risk becoming obsolete and unemployable.

The fluidity of the IT workforce gives labor a power over management. While some IT workers have gained knowledge about particular application areas that represents a valuable asset in their work, there is nothing inherently application-specific about the information technology itself. Thus IT workers are not generally bound to specific industries. There is, however, a great variation in the productivity of IT workers. Especially in the software area, the best workers can be as much as ten times as productive as the least productive workers in the same company. Figure 2-5 presents one measure of this wide variation in the productivity of software workers. These kinds of variations occur among IT workers even when the labor market is not particularly tight. In a tight market, companies have to settle for less qualified programmers, and the effects of this variability in worker productivity may hit them harder. Companies may be fully staffed but nevertheless suffer greatly in productivity.

IT workers often have strong preferences about the kind of employer they wish to work for. Given the wide availability of jobs, many IT workers are more willing to change employers than are workers in many other occupations. They have little sense of being "locked in." Employers who are deemed less attractive because of the nature of their work, the salaries they pay, or the culture of their organization are more likely than other employers to experience IT worker shortages or to employ under-skilled IT workers. Figure 2-6 illustrates the hierarchy of employment. This is grim news for organizations at the bottom of the pyramid, which often includes government organizations.

IT work is stratified, and there is much greater demand for managers and other workers with system-level skills than for 'assembly line' programmers. The "average annual level of change in employment for computer systems analysts, engineers, and scientists was in excess of 10 percent, well above the 1.2 percent" for computer programmers. 27 Managers and more advanced IT workers require a longer time to train, both through formal education and on-the-job experience. Consequently, there will be longer lags in responding to changes in demand for these more highly skilled workers.


14 U.S. Department of Commerce, Office of Technology Policy, "America's New Deficit: The Shortage of Information Technology Workers, Fall 1997, p. 3.

15 "Help Wanted: The IT Workforce Gap at the Dawn of a New Century," Information Technology Association of America, Arlington, VA, 1997, p. 9.

16 Carlotta Cooke Joyner, "Is There a Shortage of Information Technology Workers?" Symposium Proceedings, The Jerome Levy Economics Institute of Bard College, June 12, 1998, p. 4.

17 The workers addressed in the NRC study-the "computing professionals"-probably constitute a slightly narrower class of occupations than are addressed in this study. National Research Council, Computing Professionals-Changing Needs for the 1990's, National Academy Press, 1993.

18 Ibid., p. 18.

19 Ibid.

20 Professor Daniel Papp of the Sam Nunn School of International Affairs at the Georgia Institute of Technology tested these categories in a survey of information technology education programs he conducted. He found that the respondents were able to use this categorization easily and that it seemed to have value for grouping the IT workforce issues occurring in Georgia. See Papp, "ICAPP Information Technology Strategic Response Educational Capabilities Inventory," draft report, December 16, 1998.

21 The SOC categorization scheme was in the process of being updated in 1998, but it was not clear that the revisions would meet the criticisms lodged in this report. See Office of Management and Budget, 1998 Standard Occupational Classification Revision; Notice, Federal Register, August 5, 1998.

22 This correlation breaks down, however, in the case of the earliest stage of conceptualization of an IT system, where the initial functional idea often comes from people with little IT education, but great applications knowledge.

23 These statistics are taken and adapted from Exhibits 7 and 8 in Burt S. Barnow, John Trutko, and Robert Lerman, "Skill Mismatches and Worker Shortages: The Problem and Appropriate Response," Draft Final Report, The Urban Institute, February 25, 1998.

24 While there are IT jobs in every American community, there are also concentrations of IT companies in a number of locales. Silicon Valley is well known, but there are up-and-coming concentrations of IT companies and IT workers in a number of other places, such as Austin, Texas; Champaign-Urbana, Illinois; Salt Lake City, Utah; and the Washington, DC area. See Steven Levy, "The Hot New Tech Cities," Newsweek, November 9, 1998, pp. 44-56.

25 See, for example, One Digital Day, Intel, 1998, for a snapshot of the many applications of computing.

26 For an example of an attempt to introduce communications, teamwork, conflict resolution, and ethics into the information systems curriculum, see John Lamp, Chris Keen, and Cathy Urquhart, "Integrating Professional Skills into the Curriculum," ; also see "IS '97 Model Curriculum and Guidelines for Undergraduate Degree Programs in Information Systems," The DATA BASE for Advances in Information Systems, Vol. 28, No. 1, Winter 1997, ACM Special Interest Group on Management Information Systems (SIGMIS).

27 Burt S. Barnow, John Trutko, and Robert Lerman, "Skill Mismatches and Worker Shortages: The Problem and Appropriate Responses," Draft Final Report, The Urban Institute, February 25, 1998.


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Document last modified on Wednesday, 04-Apr-2012 06:51:20 PDT.