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America's New Deficit: The Shortage of Information Technology Workers
Table of Contents
I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . 1
II. The Demand for Workers in the Information
Technology-Driven Economy. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . 5
III. Is There an Adequate Supply of IT Workers? . . . . . . . . . . .
. . . . . . . . . 11
IV. Competitiveness Issues . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . 19
V. Factors Affecting the Supply of Information Technology Workers . .
. 23
VI. Current Responses to the Shortage . . . . . . . . . . . . . . . .
. . . . . . . . . . . . 29
VII. Summary and Further Actions . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 35
1 ,3 6 5
1 ,1 3 7
-2
2 7
-
8 2 0
-
5 0 0
1 ,0 0 0
1 ,5 0 0
2 ,0 0 0
2 ,5 0 0
1 9 9 4 2 0 0 5
(in
thousands)
New jobs
Net replacements
1994 base year employme } Job Openings
Due to
Growth
and
Net
Replacements
SOURCE: U. S. Department of Labor, Bureau of Labor Statistics
I. INTRODUCTION
The sweep of digital technologies and the transformation to a
knowledge-based economy
have created robust demand for workers highly skilled in the use of
information technology. In
the past ten years alone, employment in the U. S. computer and
software industries has almost
tripled. The demand for workers who can create, apply and use
information technology goes
beyond these industries, cutting across manufacturing and services,
transportation, health care,
education and government.
Having led the world into the Information Age, there is substantial
evidence that the
United States is having trouble keeping up with the demand for new
information technology
workers. A recent survey of mid-and large-size U. S. companies by the
Information Technol-ogy
Association of America (ITAA) concluded that there are about 190,000
unfilled informa-tion
technology (IT) jobs in the United States today due to a shortage of
qualified workers. 1 In
another study, conducted by Coopers and Lybrand, nearly half the CEOs
of America's fastest
growing companies reported that they had inadequate numbers of
information technology workers
to staff their operations. 2
Evidence suggests that job growth in information technology fields now
exceeds the
production of talent. Between 1994 and 2005, more than a million new
computer scientists and
engineers, systems analysts, and com-puter
programmers will be required in
the United States-an average of
that the formal, four-year education
system is producing a small propor-tion
of the workers required. Only
24,553 U. S. students earned
bachelor's degrees in computer and
information sciences in 1994. While
many IT workers acquire the needed
skills through less formal training
paths, it is difficult to determine
whether such training can be ad-equately
expanded to meet the demand
for IT skills.
High Demand Projected for
Information Technology Workers
FIGURE 1
4 America's New Deficit: The Shortage of Information Technology
Workers
This shortage of IT workers is not confined within the borders of the
United States.
Other studies, including work by the Stanford Computer Industry
Project, document that there
is a world wide shortage of IT workers. That industries in other
nations are facing similar
problems exacerbates the U. S. problem since the geographic location
of such workers is of
decreasing importance to the conduct of the work. U. S. employers will
face tough competition
from employers around the world in a tight global IT labor pool. Thus,
the United States cannot
expect to meet its long-term needs through increased immigration or
foreign outsourcing, and
must rely on retaining and updating the skills of today's IT workers
as well as educating and
training new ones.
Since information technology is an enabling technology that affects
the entire economy,
our failure to meet the growing demand for IT professionals could have
severe consequences
for America's competitiveness, economic growth, and job creation.
This paper is an initial effort to explore this complex and evolving
challenge. It begins
by considering the different ways in which interested parties have
defined the challenge, and
reviewing the various ways of defining the IT worker. It considers the
state of supply and
demand for IT workers and assesses the potential consequences of a
failure to meet the country's
need for these workers. To lay the foundation for further development
of policy responses to
this challenge, the paper also highlights some of the measures that
companies are taking to meet
their short-term and long-term needs for IT workers. Examples of
partnerships between indus-try,
government, and educational institutions are also provided with the
hope of encouraging
improved interactions among concerned groups. In exploring these
issues, the paper recog-nizes
that information technology is evolving rapidly, with resulting shifts
in labor require-ments.
Accordingly, this paper is, at best, a snapshot of a rapidly changing
phenomenon.
America's New Deficit: The Shortage of Information Technology Workers
5
Statistical and Definitional Problems
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 com-puter
diagnostic equipment, medical technicians who operate CAT scan
equipment, and loan
officers who use computers to assess creditworthiness, as well
computer programmers,
systems analysts, and computer scientists and engineers.
In the context of this report, we present data from several
organizations that have
looked at the IT worker shortage issue. Each defines an "information
technology worker"
differently. The following definitions are presented to provide a
foundation for understanding
the meaning behind the data.
For its study, the ITAA defined "information technology" as the
"study, design,
development, implementation, support or management of computer-based
information
systems, particularly software applications and computer hardware,"
and considered the lack
of skilled workers available to perform all functions related to its
definition.
Others are engaged in the development of software who are not trained
software
professionals, but who are considered to be IT workers. Stanford
University, for example,
has observed that those developing software embedded in cars, cellular
phones, aircraft, and
consumer electronics were far more likely to be mechanical engineers
or electrical engineers
with minimal training in software development methodology. 3
A study by the United States International Trade Commission of the
competitiveness
of the U. S. computer software and services industries referred to
only those individuals who
have software-related skills that fall into five general categories.
These categories are appli-cations
software developers, systems software developers, systems integration
service
providers, outsourcing service providers, and custom programming
service providers. 4
For this report, the Office of Technology Policy analyzed Bureau of
Labor Statistics
data to determine projected growth rates of core information
technology occupations through
the year 2005. BLS classifies these occupations as computer scientists
and engineers, sys-tems
analysts, and computer programmers.
6 America's New Deficit: The Shortage of Information Technology
Workers
Descriptions of Information Technology Worker Professions
Computer Scientists
Computer scientists generally design computers and conduct research to
improve
their design or use, and develop and adapt principles for applying
computers to new uses.
They are distinguished from other computer professionals by the higher
level of theoretical
expertise and innovation they apply to complex problems and the
creation or application of
new technology. Computer scientists employed by academic institutions
work in areas
ranging from theory, to hardware, to language design. Some work on
multidisciplinary
projects, such as developing and advancing uses for virtual reality.
Computer scientists in
private industry work in areas such as applying theory, developing
specialized languages, or
designing programming tools, knowledge-based systems, or computer
games.
Computer Engineers
Computer engineers work with the hardware and software aspects of
systems design
and development. Computer engineers may often work as part of a team
that designs new
computing devices or computer-related equipment. Software engineers
design and develop
both packaged and systems software.
Systems Analysts
Systems analysts (SAs) use their knowledge and skills in a problem
solving capacity,
implementing the means for computer technology to meet the individual
needs of an organi-zation.
They study business, scientific, or engineering data processing
problems and design
new solutions using computers. This process may include planning and
developing new
computer systems or devising ways to apply existing systems to
operations still completed
manually or by some less efficient method. SAs may design entirely new
systems, including
both hardware and software, or add a single new software application
to harness more of the
computer's power. They work to help an organization realize the
maximum benefit from its
investment in equipment, personnel, and business processes.
Computer Programmers
Computer programmers (CPs) write and maintain the detailed
instructions, called
"programs" or "software," that list in logical order the steps that
computers must execute to
perform their functions. In many large organizations, CPs follow
descriptions prepared by
SAs who have studied the task that the computer systems is going to
perform. The transition
from a mainframe to a primarily PC-based environment has blurred the
once rigid distinction
between the programmer and the user. Increasingly adept users are
taking over many of the
tasks previously performed by CPs. A growing number of sophisticated
software packages
allow users and SAs to write programs.
Source: Bureau of Labor Statistics, U. S. Department of Labor
II. THE DEMAND FOR WORKERS IN THE
INFORMATION TECHNOLOGY-DRIVEN ECONOMY
The Office of Technology Policy analyzed Bureau of Labor Statistics'
growth projec-tions
for the three core occupational classifications of IT workersÑ
computer scientists and
engineers, systems analysts, and computer programmersÑ to assess
future U. S. demand. BLS
projections for occupational growth are given in three bands-low,
moderate, and high. The
following analysis uses the moderate growth figures.
BLS projections indicate that between 1994 and 2005, the United States
will require
more than one million new IT workers in these three occupations to
fill newly created jobs
(820,000) and to replace workers who are leaving these fields
(227,000) as a result of retire-ment,
change of professions, or other reasons.
Of the three occupations, the largest job growth is accounted for by
systems analysts,
which are projected to increase from 483,000 in 1994 to 928,000 in
2005, a 92 percent jump.
This compares to a projected increase of 14.5 percent for all
occupations. The number of
computer engineers and scientists is expected to grow by 90 percent,
from 345,000 to 655,000
over the same period, while the number of computer programmer
positions is expected to grow
at a much slower 12 percent rate, from 537,000 in 1994 to 601,000 in
2005. However, while
only 65,000 new computer programmer jobs are projected to be created
during this period,
163,000 new programmers will be required to replace those exiting
Projected Growth in IT Professions
FIGURE 2
-
1 0 0
2 0 0
3 0 0
4 0 0
5 0 0
6 0 0
7 0 0
8 0 0
9 0 0
1 ,0 0 0
1 9 9 4 2 0 0 5 1 9 9 4 2 0 0 5 1 9 9 4 2 0 0 5
New jobs
Net replacements
1994 base year employme
Computer Engineers
and Scientists
Systems Analysts Computer Programmers
SOURCE: U. S. Department of Labor, Bureau of Labor Statistics, Monthly
Labor Review, November 1995, "Occupational employ
(in
thousands)
8 America's New Deficit: The Shortage of Information Technology
Workers
The service sector (not including transportation, communications,
finance, insurance,
real estate, and wholesale and retail trade) is expected to absorb the
lion's share of all increases
in these core information technology occupations. By 2005, the service
sector is expected to
increase its employment of computer scientists and engineers by 142
percent, systems analysts
by 158 percent, and computer programmers by 37 percent. In contrast,
the number of computer
scientists and engineers and systems analysts in the manufacturing
sector is expected to grow
much more slowly (approximately 26 percent and 48 percent,
respectively), while the number
of computer programmers is expected to decrease by about 26 percent.
Rapid technological change and the growing complexity of information
technologies
and their applications are accelerating the trend toward outsourcing
some computer-related
Industry IT Worker Intensity*
1 Computer and data processing services 33.46
2 Computer and office equipment 14.76
3 Telegraph and communication services, nec 10.03
4 Guided missiles, space vehicles, and parts 6.13
5 Life insurance 6.13
6 Medical service and health insurance 6.11
7 Security & commodity exchanges & svcs. 5.80
8 Search and navigation equipment 5.45
9 Research and testing services 5.33
10 Banking and closely related functions, nec 5.27
11 Communications equipment 4.75
12 Management and public relations 4.62
13 Aircraft and parts 4.27
14 Fire, marine and casualty insurance 4.26
15 Electronic components and accessories 3.84
16 Engineering and architectural services 3.47
17 Federal government 3.32
18 Crude petroleum, natural gas, & gas liquids 3.19
19 Measuring and controlling devices 3.16
20 Federal and business credit institutions 3.15
21 Drugs 2.95
22 Security and commodity brokers and dealers 2.88
23 Services, nec 2.87
24 Holding and other investment offices 2.86
25 Pension funds and insurance, nec 2.69
1 Computer and data processing services 43.65
2 Computer and office equipment 18.31
3 Telegraph and communication services, nec 13.62
4 Search and navigation equipment 8.00
5 Life insurance 7.96
6 Security & commodity exchanges & svcs. 7.70
7 Guided missiles, space vehicles, and parts 7.57
8 Medical service and health insurance 7.52
9 Banking and closely related functions, nec 6.81
10 Communications equipment 6.53
11 Research and testing services 6.48
12 Aircraft and parts 6.10
13 Management and public relations 5.99
14 Fire, marine and casualty insurance 5.51
15 Electronic components and accessories 5.20
16 Federal government 5.08
17 Engineering and architectural services 4.78
18 Crude petroleum, natural gas, & gas liquids 4.35
19 Measuring and controlling devices 4.10
20 Drugs 4.03
21 Federal and business credit institutions 3.88
22 Holding and other investment offices 3.78
23 Services, nec 3.40
24 Telephone communications 3.33
25 Security and commodity brokers and dealers 3.31
1994 2005 Projection
FIGURE 3
* Percent of industry workers that are computer scientists and
engineers, systems analysts, and computer programmers.
nec = not elsewhere classified
SOURCE: Bureau of Labor Statistics, U.S. Department of Labor
% %
America's New Deficit: The Shortage of Information Technology Workers
9
functions. Companies recognize the need to rely on outside experts to
keep up with the tech-nologies
and to assemble multidisciplinary teams to meet the unique needs of
each company.
This is contributing to the growth of IT workers in services.
Certain industries are more IT worker intensive than others and thus,
would be
And these industries are
only growing in their IT worker intensity. In the most IT worker
intensive industryÑ computer
and data processing servicesÑ it is projected that, by 2005, 43
percent of the industry's employ-ees
will be computer programmers, systems analysts, and computer
scientists and engineers.
However, IT worker intensity does not tell the whole story. The size
of an industry's IT
work force is an important consideration. For example, while the
Federal government is pro-jected
to be less IT worker-intensive in 2005 than many other industries, the
sheer size of its IT
work force would make shortages of computer programmers, systems
analysts, and computer
scientists and engineers a troubling problem. When IT worker intensity
and size of IT work
force are taken together, a picture emerges as to which industries'
competitive
4]. The computer and
data processing services industry stands out starkly as an industry
with much at stake in the
supply of IT workers.
FIGURE 4
Fed. gov.
5.1%
Wholesale trade 1.6%
Electronic components 5.2%
Aircraft 6.1%
Med. service, health
insurance 7.5%
Search, navigat. equip. 8%
Banking 6.8%
Missiles, space veh. 7.6%
Communication
services 13.6%
Communication equip. 6.5%
Security, commodity
exchanges, services 7.7%
Fire, marine, casualty
insurance. 5.5%
Computer, office equip.
18.3%
Hospitals
0.7%
Local gov. 0.9%
Personal supply serv. 1.3%
Life insurance 7.7%
Research, testing serv. 6.5%
Engineer., archit. serv. 4.8% Management, pub. relat., 6%
Education, pub & priv. 0.6% State gov. 2.2% 0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0 25,000 50,000 75,000 100,000
Number of Industry IT Workers
IT
Worker
Inensity*
* "IT worker intensity" is the percentage of a given industry's
workers that are computer programmers, system analysts, and computer
scientists and engineers.
Source: U. S. Department of Labor, Bureau of Labor Statistics,
Moderate Projection.
800,000
Computer &
data processing
services 43.7%
Projected IT Intensity and Size of IT Work Force
for Selected Industries in 2005
10 America's New Deficit: The Shortage of Information Technology
Workers
The Growing Importance of the
Computer and Data Processing Services Industry
The size and influence of the computer and data processing services
(CDPS) industry
have expanded rapidly over the past decade. Between 1988 and 1995,
CDPS sales grew 14
percent in constant dollars, compared to only 4 percent for all
industries that conduct research
and development.
Along with its phenomenal sales growth, CDPS employment has grown
rapidly
since the mid-1970s, as shown below. This growth is fueled not only by
the rapid diffusion
of information technologies throughout the economy, but also by the
tendency of firms in all
industries increasingly to outsource both routine and complex
information activities in order
to concentrate on the core business. Accordingly, increasing numbers
of CDPS and manage-ment
consulting firms are providing clients specialized information
technology services more
rapidly and less expensively than if the contracting firm did it
themselves.
The shift to an information-based economy and the increasing
concentration of
information functions in information service firms is reflected in
projected employment
trends for "core" IT workers in the industry. By 2005, BLS projects
that computer program-mers,
systems analysts, and computer scientists and engineers will
constitute 43.7 percent of
all 1.61 million CDPS workers (up from 0.95 million in 1994). Between
1994 and 2005, the
CDPS share of total U. S. industry IT workers is expected to move up
substantially with the
computer programmer share rising from 30 to 41 percent, the share of
systems analysts
moving up from 20 to 29 percent, and the share of computer scientists
and engineers increas-ing
from 24 to 34 percent. Engineering and management services and
personal supply
services also increase their share of these workers, while most other
services and all other
major sectors of the economy (in particular manufacturing) decrease
their shares.
As a consequence, the CDPS has, by far, the greatest stake in the
adequacy of the
supply of IT workers. Continuation of employment growth to a projected
1.6 million work-ers
in 2005, with 702,862
"core" information tech-nology
workers, depends
critically upon the exist-ence
of a well trained
workforce. As U. S.
industry increasingly
depends upon the CDPS to
provide many specialized
information services, any
adverse effects resulting
from serious bottlenecks in
the supply of new IT
workers would reverberate
across the economy.
-
2 0 0
4 0 0
6 0 0
8 0 0
1 ,0 0 0
1 ,2 0 0
1 9 7 2 1 9 7 6 1 9 8 0 1 9 8 4 1 9 8 8 1 9 9 2
(in
thousands)
SOURCE: Current Employment Statistics Program, Bureau of Labor
Statistics
Employment in Computer Services
Has Grown Rapidly Since 1972
America's New Deficit: The Shortage of Information Technology Workers
11
The Millennium Problem
Many computer professionals have been diverted to correct the
so-called Year 2000
problem. Some of the most important computer software used in industry
and government
may not work correctly starting in the year 2000 because it can only
recognize two-digit dates
that represent the year. For example, 97 is recognized as 1997. This
means that these com-puters
may not recognize a change to the new century and, thus, generate
erroneous data in a
wide range of computer activities, such as financial transactions,
logistics, production, and
communications. Many of the computers involved are older mainframe
computers, which has
placed a premium on computer professionals skilled in the older
computer language of
COBOL. It has been estimated by the Gartner Group that it may cost as
much as $600 billion
worldwide to fix the problem.
Rapid Growth Expected for Systems Analysts
With an expected growth rate of 92 percent to the year 2005, systems
analysts are
among the most dynamic of occupations, working at the nexus of rapid
change in technology
and business organization. Composed largely of young workers, unlike
computer program-mers,
only a small percentage of systems analysts are expected to exit the
occupation by the
year 2005.
Responsible for matching computer/ information systems to the special
needs of
companies and systems, many systems analysts must not only have an
understanding of
information technologies, but also business, scientific,
manufacturing, or engineering prob-lems.
According to BLS, for jobs in the business environment, employers
usually want
systems analysts with backgrounds in business management or closely
related fields. Many
information service and consulting firms are looking for educated,
computer savvy, individu-als
with a variety of college and graduate degrees to fill systems analyst
positions. A number
of consulting firms, which are rapidly expanding their information
services, prefer hires with
degrees in management, business, public policy, etc., over those with
more narrow computer
specialization. These firms provide whatever additional training is
necessary to fill out
computer/ systems skills. With a wide variety of skilled IT workers to
draw upon, information
service firms can quickly assemble the precise teams necessary to meet
the needs of their
diverse clientele.
The projected dramatic growth in systems analysts contrasts sharply
with the ex-pected
net growth in computer programmers. Systems analysts may contribute to
this slow
growth as they assume more and more computer programming
responsibilities, aided by the
introduction of a variety of programming software which simplify and
extend the program-ming
process. Some additional factors may further slow the growth in
computer program-mers.
These include economies of scale associated with increased outsourcing
of information
functions and increased reliance by organizations on prepackaged
software rather than wholly
customized data systems; overseas outsourcing of computer programming;
and the focus on
enterprise-wide system integration which is consolidating stand-alone
computer systems and
islands of automation.
III. IS THERE AN ADEQUATE SUPPLY OF IT WORKERS?
Current statistical frameworks and mechanisms for measuring labor
supply do not al-low
for precise identification of IT workers shortages. However, evidence
does suggest a prob-lem
may be emerging.
Upward Pressure on Salaries
The strongest evidence that a shortage exists is upward pressure on
salaries. The com-petition
for skilled IT workers has contributed to substantial salary increases
in many IT profes-sions.
A compensation survey conducted by William M. Mercer showed that
average hourly
compensation for operating systems/ software architects and
consultants rose nearly 20 percent
from 1995 to 1996. A survey conducted by the Deloitte & Touche
Consulting Group revealed
that salaries for computer network professionals rose an average of
7.4 percent from 1996 to
1997. Computerworld's annual survey found that in 11 of 26 positions
tracked, average sala-ries
increased more than 10 percent from 1996 to 1997. For example, systems
analysts' salaries
were up 15 percent, programmer/ analysts' salaries were up 11 percent,
and directors of systems
development received an average increase of 10 percent. Starting
salaries for graduates with
bachelor's degrees in computer science have nudged up to an average of
$36,666 5 , while expe-rienced
programmers can command salaries ranging from $45,000 -$75,000. 6
ITAA Survey
A recent survey of mid-and large-size companies, both information
technology-related
and non-information technology-related, conducted by the Information
Technology Associa-tion
of America found approximately 190,000 unfilled information technology
jobs in the United
States due to a shortage of qualified workers. According to this
survey, shortages are likely to
worsen. ITAA found that 82 percent of the information technology
companies responding to
the survey expect to increase their IT staffing in the coming year,
while more than half of the
non-information technology companies planned IT staff increases.
The Education Pipeline for IT Workers
Over the last ten years, there has been a decline in the number of
students receiving
university degrees in computer science. These graduates come from
four-year degree-granting
universities which focus on computer theory; that is, operating
systems, languages, distributed
systems, computer architecture and compilers. According to the U. S.
Department of Educa-tion,
the number of bachelor-level computer science degrees awarded by U. S.
universities
declined more than 40 percent between 1986 and 1994, from
America's New Deficit: The Shortage of Information Technology Workers
13
significant decline in bachelor-level computer science degrees is,
however, an imperfect indi-cator
of declining labor supply, given that many IT workers acquire their
skills through alterna-tive
education and training
paths.
While there have
been some increases in the
award of computer science
masters and doctoral de-grees,
overall computer sci-ence
degrees awarded have
dropped from a high of
50,000 in 1986 to 36,000
In addition, foreign
students make up a signifi-cant
share of U. S. computer
science graduates. Of the 36,000 individuals awarded graduate and
undergraduate computer
science degrees in 1994, about 18 percent were foreign nationals. For
advanced degrees, the
proportion of foreign nationals increases, reaching more than 50
percent for doctorates. 8 The
Computer Research Asso-ciation
estimates that foreign
nationals comprise nearly 50
percent of computer engi-neering
students in the
United States. 9 The high
proportion of foreign nation-als
in the graduate popula-tion
would indicate that
American industry cannot
count on capturing all new
graduates. 10
IT workers also obtain
their skills from training
providers other than four-
BachelorÕs Degrees in Computer Science
Down More Than 40 Percent Since 1986
0
5 ,0 0 0
1 0 ,0 0 0
1 5 ,0 0 0
2 0 ,0 0 0
2 5 ,0 0 0
3 0 ,0 0 0
3 5 ,0 0 0
4 0 ,0 0 0
4 5 ,0 0 0
1 9 6 6 1 9 7 0 1 9 7 4 1 9 7 8 1 9 8 2 1 9 8 6 1 9 9 0 1 9 9 4
SOURCES: National Science Foundation; U. S. Department of Education,
National Center for Education Statistics
FIGURE 5
Computer Science Degrees Earned BachelorÕs ¥ MasterÕs ¥ Doctoral
FIGURE 6
-
1 0 ,0 0 0
2 0 ,0 0 0
3 0 ,0 0 0
4 0 ,0 0 0
5 0 ,0 0 0
6 0 ,0 0 0
1 9 6 6 1 9 7 0 1 9 7 4 1 9 7 8 1 9 8 2 1 9 8 6 1 9 9 0 1 9 9 4
SOURCES: National Science Foundation; U. S. Department of Education,
National Center for Education Statistics
14 America's New Deficit: The Shortage of Information Technology
Workers
Training, Other Qualifications, and Advancement
Computer Programmers
There are no universal training requirements for programmers because
employers'
needs are so varied. Computer applications have become so widespread
that computer
programming is taught at most public and private vocational schools,
community and junior
colleges, and universities. Although some programmers obtain two-year
degrees or certifi-cates,
bachelor's degrees are now commonly required. In the absence of a
degree, substantial
specialized experience or expertise may be needed.
The majority of programmers hold a four-year degree. Of these, some
hold a B. A. or
B. S. in computer science or information systems while others have
taken special courses in
computer programming to supplement their study in fields such as
accounting, inventory
control, or other business areas. College graduates who are interested
in changing careers or
developing an area of expertise may return to a junior college or
technical school for more
training.
Employers using computers for scientific or engineering applications
prefer college
graduates who have degrees in computer or information science,
mathematics, engineering,
or the physical sciences. Graduate degrees are required for some jobs.
Employers who use
computers for business applications prefer to hire people who have had
college courses in
management information systems (MIS) and business, and who possess
strong programming
skills. Knowledge of FORTRAN, COBOL, C, Fourth Generation Languages
(4GL), CASE
tools, systems programming, C++, Smalltalk, and other object oriented
programming lan-guages
is highly desirable. General business skills and experience related to
the operations of
the firm are preferred by employers as well.
Most systems programmers hold a four-year degree in computer science.
Extensive
knowledge of a variety of operating systems is essential. This
includes being able to config-ure
the operating system to work with different types of hardware, and
adapting the operating
system to best meet the needs of the particular organization. They
also must be able to work
with database systems such as DB2, Oracle, or Sybase.
(continued on next page)
America's New Deficit: The Shortage of Information Technology Workers
15
Training, Other Qualifications, and AdvancementÑ continued
Computer Scientists and Engineers, and Systems Analysts
There is no universally accepted way to prepare for a job as a
computer professional
because employers' preferences depend on the work to be done. Prior
work experience is
very important. Many people develop advanced computer skills in other
occupations in which
they work extensively with computers and then transfer into computer
occupations. For
example, an accountant may become a systems analyst specializing in
accounting systems
development, or an individual may move into a systems analyst job
after working as a
computer programmer.
Employers almost always seek college graduates for computer
professional positions;
for some of the more complex jobs, persons with graduate degrees are
preferred. Generally, a
Ph. D., or at least a master's degree in computer science or
engineering, is required for com-puter
scientist jobs in research laboratories or academic institutions. Some
computer scientists
are able to gain sufficient experience for this type of position with
only a bachelor's degree,
but this is difficult. Computer engineers generally require a
bachelor's degree in computer
engineering, electrical engineering, or math.
For systems analysts, many employers seek applicants who have a
bachelor's degree
in computer science, information science, computer information
systems, or data processing.
Regardless of college major, employers generally look for people who
are familiar with
programming languages and have broad knowledge of and experience with
computer systems
and technologies. Courses in computer programming or systems design
offer good prepara-tion
for a job in this field. For jobs in a business environment, employers
usually want
systems analysts to have a background in business management or a
closely related field,
while a background in the physical sciences, applied mathematics, or
engineering is preferred
for work in scientifically oriented organizations.
Technological advances come so rapidly in the computer field that
continuous study
is necessary to keep skills up to date. Continuing education is
usually offered by employers,
hardware and software vendors, colleges and universities, or private
training institutions.
Additional training may come from professional development seminars
offered by profes-sional
computing societies.
Source: Bureau of Labor Statistics, U. S. Department of Labor
16 America's New Deficit: The Shortage of Information Technology
Workers
year degree-granting universities. These include:
° two-year associate-degree-granting community colleges which provide
grounding
in applications (especially in new computer programs and hot areas
such as "the
year 2000 problem) as well as basic theory, and vocational technical
education pro-grams
° special university/ community college one-year programs designed to
upgrade the
skills of IT workers already in the work force (new applications) or
those with back-grounds
in other technical fields who are looking for a fast track entry into
the IT
profession
° private-sector computer learning centers which typically offer
courses to people
with little or no computer background who are interested in
discovering whether
they have the aptitude to make it in the computer-related professions
° in-house company training to upgrade employee skills (e. g. client/
server-based tools
and architectures, C++ and Visual Basic) or to assist in the
transition from one skill
set (e. g. computer hardware engineers) to another (e. g. computer
software engi-neers)
° computer user groups, Internet forums, and company-sponsored help
sites also of-fer
knowledge that can help expand or update computer skills
In addition to those earning four-year degrees in computer and
information sciences, in
1994, 15,187 degrees and awards in computer and information sciences
below the bachelors
level were earned.
Offshore Sourcing and Recruiting
Some companies are drawing upon talent pools outside the United States
to meet their
demands for IT workers. India, with more than 200,000 programmers, in
conjunction with
predominantly U. S. partners, has developed into one of the world's
largest exporters of soft-ware.
In 1996-97, outsourced software development accounted for 41 percent
of India's soft-ware
exports. Companies are also searching for IT workers in foreign labor
markets--in Russia,
Eastern Europe, East Asia, and South Africa--using direct recruiting
efforts, Internet techniques,
and international recruiting agencies. 11
America's New Deficit: The Shortage of Information Technology Workers
17
The Global Shortage of IT Workers
As in the United States, data limitations make it difficult to assess
and compare the
supply and demand for IT workers in foreign countries. Nevertheless,
executive surveys and
anecdotal evidence suggest that IT workers are in increasingly short
supply in other countries
as well.
A survey of some 1,500 chief information officers (CIOs) in 21
countries, conducted
by Deloitte and Touche Consulting Group, suggests that IT managers
throughout the world
are experiencing a difficult combination of unprecedented demand for
IT workers and high
turnover rates. According to the survey, companies are finding it
especially difficult to retain
employees in four key areasÑ client/ server architecture, data
modeling, distributed databases,
and particular packaged software applications such as SAP. Turnover
rates in these areas
range from 35 to 45 percent.
In the advanced industrial economies, strong growth rates in the IT
sector continue to
propel demand for IT workers. Canada's IT sector has been growing by
10 percent annually;
estimates of the shortfall in IT employees range from 20,000 to
30,000. Given Canada's
proximity and relatively high level of integration with the United
States, U. S. firms often can
recruit Canadian IT workers by offering more generous compensation
packages than are
available locally. While Canadian universities have not experienced a
sharp drop in computer
science enrollment, the Canadian government has responded to the
increased demand for IT
workers through several channels: it established the Software Human
Resources Council to
help develop the IT workforce; improved immigration policies; and
encouraged universities
to augment standard degree programs with 3 to 9 month IT training
programs.
In some developing economies, IT-based economic growth strategies,
combined with
other sources of demand for IT workers, may overwhelm the supply of
skilled personnel. In
India, for example, the software industry has been growing at over 40
percent per year.
Exports account for approximately half of the industry's revenues, due
in large part to the
outsourcing activities of U. S.-based software companies. Given the
country's skilled work-force,
high quality standards, relatively low labor costs, widespread use of
English, and
available communication links, India is a particularly attractive
outsourcing site for Western
software companies. In addition, the Indian government has implemented
a variety of
programs and policies designed to expand the country's software
industry, largely through
Software Technology Parks of India (STPI).
Although various institutions are producing 55,000 students annually,
India's highly
skilled software professionalsÑ numbering approximately 160,000 in
1996-1997Ñ are not
expected to keep pace with the country's rapidly growing software
industry. The country's
large software firms are attempting to solve the problem through
internal training and educa-tion
programs, combined with support from the country's universities,
colleges, and private
educational institutions. In addition, the industry's main trade
association, the National
Association of Software and Service Companies (NASSCOM), established
the Institute of
Computer Software Professionals of India (ICSPI) to assist with the
problem.
(continued on next page)
18 America's New Deficit: The Shortage of Information Technology
Workers
Global ShortageÑ continued
In other countries, local IT development strategies alone are creating
a gap between
the supply and demand for skilled IT professionals. Malaysia's
long-term economic
development strategy relies heavily on creating a "multimedia super
corridor" (MSC), a 9
by 30 mile IT center that is expected to lead the country to a new
level of economic and
technological development. Through tax breaks and other
investment-related incentives,
the Malaysian government is actively seeking to attract foreign IT
firms. However, these
efforts may outstrip the supply of skilled personnel: Malaysia's
universities are producing
less than 6,000 IT engineers per year, far fewer than the estimated
annual demand of
10,000. In addition, many skilled workers have been seeking higher
wages in countries
like Singapore. To address the problem, the Malaysian government has
included a univer-sity
within its MSC plan, is exploring university-industry partnerships to
train workers
outside of the college track, and is seeking to reduce any barriers to
hiring foreign workers.
Indeed, comparative economic developing studies suggest the importance
of education,
training, and skill flexibility for countries, like Malaysia, that are
pursuing IT-based eco-nomic
development trajectories.
Sources:
Asian Technology Information Program (Tokyo), Report number
ATIP97.066: Indian Software
Activities; http:// www. atip. or. jp (August 8, 1997).
Minda Zetlin, ÒCan Malaysia Make Big Dreams Come True?Ó
http://ibm.com/othervoices/zetlin/
march89702824.html (March 8, 1997).
Nagy Hanna, Sandor Boyson, and Shakuntala Gunaratne, The East Asian
Miracle and Information
Technology: Strategic Management of Technological Learning, World Bank
Discussion Papers #326,
The World Bank, Washington, DC , 1996.
IV. COMPETITIVENESS ISSUES
Information technologies are the most important enabling technologies
in the economy
today. They affect every sector and industry in the United States, in
terms of digitally-based
products, services, and production and work processes. Thus, severe
shortages of workers who
can apply and use information technologies could undermine U. S.
innovation, productivity,
and competitiveness in world markets.
Productivity and the Cost of Doing Business
Competitive pressures have driven businesses to adopt a wide range of
computer sys-tems
to improve productivity, manage production, improve both internal and
external commu-nications
and to offer customers new services. Private sector investment in
enterprise-wide
applications alone was estimated to be $42 billion in 1996. 12 The
service sector, now repre-senting
70 percent of U. S. GDP, is increasingly information technology
intensive. Manufactur-ing
also relies heavily on information technology from computer aided
design and computer
numerically controlled machine tools to computer-based systems for
inventory control, pro-duction
planning, and statistical process control. In short, computer-based
information systems
have become an indispensable part of managing information, workflow,
and transactions in
both the public and private sector. Therefore, a shortage of IT
workers affects directly the
ability to develop and implement systems that a wide variety of users
need to enhance their
performance and control costs. A recent survey by Deloitte & Touche
Consulting reported that
worker shortages are causing many companies to delay information
technology projects.
As competition for IT workers heats up, rising salary levels increase
the cost of doing
business. For example, Electronic Data Systems Corp. (EDS) recently
reported that IT worker
shortages have contributed to pushing workers' compensation up by 15
to 20 percent annually.
The company reported in April 1997 that it may reduce its work force
by thousands to cut labor
costs and maintain profits. Many computer companies faced with rising
labor costs have passed
those increases along to their customers. However, EDS and similar
companies rely on long-term
fixed contracts to develop and manage large computer systems and have
less flexibility to
pass increased costs to customers. 13
Shortage-driven increases in salaries for both skilled IT managers and
IT workers also
increase the amount of venture capital investment required by start-up
companies in informa-tion
technology-related businesses. For example, new software technology
start-upsÑ which
have benefitted substantially from private venture capital and are IT
worker-intensiveÑ could
require greater venture capital investment in the future to cover
salary costs. These rising labor
20 America's New Deficit: The Shortage of Information Technology
Workers
costs could result in venture capital seeking growth opportunities
elsewhere, constraining the
emergence and growth of many promising new companies.
Government and non-profit organizations may increasingly be squeezed
out of the com-petition
for IT talent. For example, while average starting salaries for
graduates with bachelor's
degrees in computer engineering grew to more than $34,000 in 1995, the
Federal government's
entry level salary for computer professionals with bachelor's degrees
ranged from about $18,700
to $23,200 that year. The Department of Defense is already having
difficulty retaining IT
employees; it appears industry is offering them more attractive
compensation packages. The
U. S. Air Force Communications Agency reports a loss rate of 42 to 45
percent of systems
administrators from 1993-1995.
Industry Growth
High-tech industries, particularly leading-edge electronics and
information technology
industries, are driving economic growth not only in the United States
but around the world.
According to industry estimates, the markets for computer and
communications hardware and
services, and for software have grown to one trillion dollars. 14 With
the current annual growth
rate estimated at 10 percent, the global market for these products and
services may be growing
by $100 billion annually. These industries are IT worker intensive and
shortages of critical
skills would inhibit their performance and growth potential.
In the ITAA survey, 50 percent of the information technology company
executives cited
lack of skilled/ trained workers as "the most significant barrier" to
their companies' growth
during the next year-a problem viewed as significantly greater than
economic conditions, prof-itability,
lack of capital investment, taxes, or regulation. An additional 20
percent of the IT
company executives identified the shortage of these workers as "a
barrier" to their companies'
growth during the next year.
Innovation
The United States is a leader in the development of new products and
services, and
many important consumer and industrial innovations-from computers,
consumer electronic prod-ucts,
and telecommunications services to automotive electronics, aerospace
products, and ad-vanced
industrial systems-have been made possible by information
technologies. Information
technologies are expected to continue to form the basis of many of the
most important products,
services, and processes of the future. For example, it is expected
that in less than a decade,
electronics will account for about one-fifth of an automobile's value.
15 Shortages of IT work-ers
could inhibit the nation's ability to develop leading-edge products
and services, and raise
their costs which, in turn, would reduce U. S. competitiveness and
constrain economic growth.
America's New Deficit: The Shortage of Information Technology Workers
21
Trade
The shortage of IT workers could undermine U. S. performance in global
markets. The
global market for computer software and computer services reached $277
billion in 1994. The
United States is both the predominant supplier of and the primary
consumer for these goods
and services. 16 Ranked in terms of global market share in 1994, eight
of the world's top ten
applications software vendors and seven of the top ten systems
software vendors are U. S. firms.
Both of these markets are growing rapidly, with the computer software
market growing 12
percent annually, and the computer services market growing 11 percent
annually, reaching $420
billion by 1998, a 50 percent increase just between 1994 and 1998.
Aerospace, another IT
worker intensive industry is also a global market leader for the
United States, and is the Nation's
leading net exporter of manufactured goods. An adequate supply of IT
workers is essential to
America's continued strength in these markets.
High-Wage Jobs
A shortage of qualified IT workers could also prevent the United
States from taking full
advantage of high-wage job creation. Many information technology jobs
are high-wage jobs.
Workers in the software industry earn more than twice the national
average. A William M.
Mercer compensation study shows that the average hourly compensation *
in 1996 for an inter-mediate
customer support technician was $40.80; software development
architect, $77.70; op-erating
systems software architect/ consultant, $85.60, and operating systems/
software program-ming
analyst manager, $92.20. Even if shortages ease and upward pressure on
salaries is re-duced,
the IT professions have traditionally been high-wage jobs.
* Note: The text in the paragraph above appears as originally
published. The figures, how-ever,
are actually "average annual compensation," not "average hourly
compensation."
V. FACTORS AFFECTING THE SUPPLY
OF INFORMATION TECHNOLOGY WORKERS
A number of factors may contribute to constraints in the supply of IT
workers with the
skills employers want.
Underlying Causes of Decline in Computer and Information Sciences
Degrees
A number of reasons have been offered for the declining number of U.
S. students enter-ing
and earning degrees in computer and information sciences (a 42 percent
decrease between
1986 and 1994):
° despite rapid gains in the last decade, only about half of all high
school graduates
complete algebra II or chemistry, which are prerequisites for college
mathematics
and science; 17
° defense industry cutbacks and corporate downsizing have left many
students with
the impression that there are fewer job opportunities in the computer
field; 18
° many students believe that universities do not provide proper
training for the mar-ketplace,
particularly with respect to understanding the software development
pro-cess
in an industrial setting; 19 and
° on-the-job training is increasingly substituting for formal
four-year university edu-cation
in computer science. 20
It should be noted that computer science is not a particularly popular
choice of aca-demic
study. Only 1.1 percent of women and 3.3 percent of men earning
bachelor's degrees in
1994 earned them in computer science.
Mismatches between what universities teach and what industry needs
While workers with degrees from two-and four-year computer science
programs are
attractive to potential employers, many employers have found some
skill sets lacking in many
of these graduates. For example, graduates may be superb computer
theorists, but employers
are looking for IT workers skilled in networking/ distributed computer
environments and large
software projects, who have real world experience, and who are capable
in business and indus-trial
settings.
Industry Practices and Expectations
Information technology is advancing rapidly, causing frequent changes
in skill require-ments.
A decade ago, the Internet was a tool used mostly by researchers at
American universi-ties.
Today the Internet and the World Wide Web are information tools for
the masses, which
America's New Deficit: The Shortage of Information Technology Workers
23
has driven up the demand for skills needed to create and support
on-line information services. 21
According to one estimate, 760,000 persons are now working at
Internet-related companies. 22
Even within established segments of the software discipline, such as
software program-ming,
change is rapid. Software market leaders constantly update their
programs used in a
wide range of work place applications, causing employers to demand
that new hires have the
latest skills. 23
A critical factor affecting the IT labor market is the volatility
introduced into a company's
work stream by the appearance of new versions of software products in
shorter cycle times Ñ
in some cases every six months. Some have suggested that this rapid
change in software leads
companies to unrealistic expectations on potential hires, as well as
on their own staff in terms of
keeping their skills up-to-date. 24 Companies may advertise positions
as requiring specific skills
sets, even before training on the new software is generally available.
They may also recruit on
the basis of computer program-specific skills, rather than looking
more broadly at applicants'
basic understanding of computing concepts, experience with
programming, and ability to learn
new technologies.
In addition, businesses often define skill sets for IT jobs very
narrowly-for example,
skill in a specific programming language-but developers of computing
technologies come from
a wide variety of backgrounds, including electrical engineering and
the humanities. Electrical
engineers led the way in the development of computer graphics.
Linguists and electrical engi-neers
built the first machine translation and speech understanding and
production systems.
The Need to Retrain Workers
Many of the unfilled IT jobs such as managerial positions, require
specific skills and
significant experience. Retraining existing employees could play an
important role in meeting
the growing skills needs of companies. Some suggest that companies
play a larger role in
cultivating and updating information technology skills among their
employees. 25
ITAA does note, and anecdotal evidence confirms, that most IT
companies provide
training to their IT employees. 26 However, highly trained workers can
easily leave an employer
after receiving extensive and expensive training and, in a tightening
labor market, they fre-quently
do. Nevertheless, while upgrading the skills of existing employees is
important for
companies seeking to meet their needs for skilled IT workers, employer
provided training alone
is unlikely to satisfy the increasing demand. 27
24 America's New Deficit: The Shortage of Information Technology
Workers
Underrepresentation of Women and Minorities in the Computer Science
Education Pipeline
Women and some minorities are underrepresented in the computer and
information sci-ences
education pipeline. WomenÑ who comprise 51 percent of the population
and earn more
than half of all bachelor-level
degrees awardedÑ earn about
one-quarter of the bachelor-level
computer and informa-tion
sciences degrees
awarded by U. S. academic
disturbing is the trend line:
the share of all computer sci-ence
degrees awarded to
women in the United States
has fallen steadily from a
peak of 35.8 percent in 1984,
to only 27.5 percent in
1994Ñ the lowest level
the number of computer
science degrees awarded, has cut the number of women receiving
bachelor's degrees in com-puter
science by more than half, from a high of 15,126 in 1986 to 7,020 in
1994. In 1994, men
were three times more likely
to choose computer science
as a field of study than
women.
African-Americans, Na-tive
Americans and Hispan-ics
are also underrepresented
in computer science
share of degrees in these
fields received by each of
these groups has climbed
substantially since 1977.
These groups also are
underrepresented in higher
Share of BachelorÕs Degrees in
Computer Science Earned by Women
FIGURE 7
0%
5%
10%
15%
20%
25%
30%
35%
40%
1 9 6 6 1 9 7 0 1 9 7 4 1 9 7 8 1 9 8 2 1 9 8 6 1 9 9 0 1 9 9 4
SOURCES: National Science Foundation; U. S. Department of Education,
National Center for Education
FIGURE 8
Share of All Computer Science Degrees
Earned by Women Has Fallen Since 1984
0%
5%
10%
15%
20%
25%
30%
35%
40%
1 9 6 6 1 9 7 0 1 9 7 4 1 9 7 8 1 9 8 2 1 9 8 6 1 9 9 0 1 9 9 4
SOURCES: National Science Foundation; U. S. Department of Education,
National Center for Education Stati
America's New Deficit: The Shortage of Information Technology Workers
25
FIGURE 9
Distribution of Degrees in Computer Science
by Race and Ethnic Heritage
FIGURE 10
education generally. Comparing the number of bachelor's, master's, and
doctoral degrees granted
in 1994 to students of each race and ethnic group to their share of
the U. S. population of 22-30
year olds, we found the percentage earned by Whites (5.2 percent) and
Asians (5.5 percent) to
be significantly higher than Native Americans (2.9 percent),
African-Americans (2.4 percent),
and Hispanics (1.4 percent). Nevertheless, Asians, African-Americans,
and Hispanics who
earn bachelor's degrees choose computer science as a field of study at
higher rates than
Computer Science Selection Rate, by Race
SOURCES: National Science Foundation; U. S. Department of Education,
National Center for Education Statistics
All BachelorÕs BachelorÕs Degrees in Percent Choosing
Degrees Computer Science Computer Science
White 947,309 20,503 2.2%
Asian 51,463 3,592 7.0%
Black 77,872 2,773 3.6%
Hispanic 45,376 1,311 2.9%
Native American 5,671 97 1.7%
0%
5%
10%
15%
20%
25%
Asian Black Hispanic Native
American
Share of Population, ages 22-3
Share of Bachelor's Degrees
Share of Master's Degrees
Share of Doctoral Degrees
SOURCES: U. S. Bureau of the Census; National Science Foundation; U.
S. Department of Education, National Center for Education Statistic
26 America's New Deficit: The Shortage of Information Technology
Workers
Efforts are underway in both the private and public sectors to
increase women's and
minorities' participation in technical fields. The National Science
Foundation sponsors pro-grams
to encourage minorities and women to enter the fields of science and
technology. Profes-sional
organizations also support such efforts. Members of the Association of
Women in Com-puting,
for example, participate in a National Science Foundation sponsored
telementoring
program aimed at encouraging young women to enter technical fields.
Limitations on Immigration of Skilled Workers
A number of U. S. companies have resorted to recruiting foreign
nationals to fill skilled
information technology jobs. Under the H-1B non-immigrant category of
U. S. immigration
law, 65,000 professional foreign workers may be sponsored by U. S.
employers each year. These
foreign workers must have a professional undergraduate degree or
substantial work experience,
and may work in the United States for six years. 29
Some companies and industry representatives believe the current cap is
too restrictive
and have expressed concerns about proposals to make it more difficult
or costly to recruit
foreign workers. They say foreign nationals are needed to fill open IT
jobs and, unless they can
hire more foreign workers, they may move some of their operations to
locations outside of the
United States where labor markets are believed to be less tight. 30
Some professional engineering societies believe the shortage of IT
workers is exagger-ated.
They fear that easing visa restrictions would create an over supply of
IT workers, which
could eventually lead to layoffs. The Institute of Electrical and
Electronics Engineers (IEEE)
has questioned the IT industry's contention. IEEE suggests the
shortage is a skills mismatch
created by rapidly changing technology and the difficulty of keeping
worker skills up-to-date to
keep pace. IEEE advocates a focus on retraining the current work
force, including engineers
laid off in defense downsizing. 31
Regardless of which view is correct, the emergence of a world-wide
shortage of IT
workers indicates that U. S. employers cannot rely on increased
immigration or even outsourcing
to foreign countries to meet any significant IT skill shortages.
Instead, the United StatesÑ as
well as other industrialized countriesÑ will be forced to rely
increasingly on policies and strat-egies
directed at educating, training, and retraining their domestic work
forces in IT skills.
VI. CURRENT RESPONSES TO THE SHORTAGE
Companies, universities and governments are taking steps to increase
the U. S. supply of
adequately trained IT workers. For example, Senator John Warner
recently introduced a bill to
establish a federal commission to recommend ways to increase the U. S.
pool of IT workers.
Industry Responses
Since there has been no comprehensive, systematic survey of industry
responses to the
tightening IT labor market, much of the information on how U. S..
industry has adapted to meet
its needs is anecdotal. Based on this information, it appears that
companies are pursuing
aggressive recruitment strategies to fill their IT slots. This
includes attracting top performers
from other companies. 32 Others pay bonuses to their employees who
provide hiring leads. 33
Still others attract employees with signing bonuses of $2,000-$ 3,000
or more. 34 Stock options
in the signing package are becoming routine. 35 Other carrots designed
to attract workers in-clude
flexible work hours, telecommuting, day care centers, and on-site
health clubs. Compa-nies
are also expanding their recruiting to other parts of the world such
as Russia, Eastern
Europe, East Asia, and South Africa. 36
Companies are also finding ways to overcome the decline in graduates
with university
computer science degrees. Some hire graduates from other academic
disciplines and provide
training in computer skills. 37 Similarly, other companies have found
the practice of retraining
existing staff to be sufficient in fulfilling their IT skill
requirements. Many employees with no
prior background and skills in computing are able to learn and apply
new information technolo-gies.
Companies are broadening their approach to recruiting from colleges
and universities.
Students at less prominent schools are sought out. Job offers are made
as early as a year before
graduation. Firms hope that student internships will pave the way to
full-time employment,
and provide future job candidates with real world experience.
Companies are tapping foreign pools of skilled labor, recruiting
foreign nationals and
outsourcing more work to contractors in other parts of the world. 38
Geographic location is an
insignificant barrier since development of software products does not
require that various mem-bers
of the development team be in one location. By taking advantage of the
Internet, elec-tronic
blackboard technologies, and videoconferencing, some companies are
able to manage
teams around the globe that collaborate on projects, sometimes around
the clock.
28 America's New Deficit: The Shortage of Information Technology
Workers
Public Private Partnerships
Public-private partnerships have been forged to help ensure that more
workers will be
equipped with information technology-related skills. Most have focused
on revamping the U. S.
educational system to reflect the changing needs of industry.
Industry's Role in the Reform of
Mathematics, Science and Technology Education is one publication that
resulted from such an
effort by the Triangle Coalition for Science and Technology, a
partnership among business, edu-cation,
engineering, industry, and science and technology-related
organizations that work both
nationally and locally to improve science, mathematics, and technical
education. 39 The ITAA has
proposed that the current education paradigm be examined with an eye
toward the knowledge-based
economy, both by the education community and the employers of IT
workers. 40
There is some evidence that a new paradigm is emerging. For example, a
committee
composed of the Association of IS Professionals, the Association for
Computing, and the Asso-ciation
for Information Systems developed an Information Systems (IS) model
curriculum to
enhance the ability of the U. S. educational system to meet the needs
of employers. The curricu-lum
is designed to equip students with a strong mix of computing,
business, and communica-tions
skills, and includes classes on computer languages. It is being
implemented by the
University of Minnesota's Carlson School of Management. 41
Similarly, companies are forming partnerships with community colleges
to develop
curricula that are more reflective of industry's needs, especially the
need for information tech-nology-
related skills. 42 Also, community colleges are working closely with
employers in re-training
efforts for current employees. Broome Community College in upstate New
York, for
example, is working with local companies to provide appropriate
training to upgrade the skills
of the current work force. 43
The Software Publishers Association has encouraged the principal
stakeholders--Fed-eral,
state, and local governments, as well as the private and nonprofit
sectors--to assume re-sponsibility
for producing a world-class, Information Age work force. 44 They
advocate the re-engineering
of K-12 public education, a process that has already started. Many
companies,
driven by the need to ensure a talent pool from which to draw in the
future, have formed strate-gic
partnerships with the schools to improve science and mathematics
education at the K-12
levels. Some companies are offering their own in-house expertise and
resources to help teach-ers
and students sharpen such skills. For example, in July of 1997, Boeing
sponsored a Space
Academy for Educators aimed at helping teachers inspire and motivate
students in mathematics
and science. 45 Since 1992, Boeing has also conducted a Discover
Engineering Summer Sci-ence
Camp in which several hundred children take part in "hands-on"
science, mathematics
and engineering workshops taught by Boeing engineers. 46
America's New Deficit: The Shortage of Information Technology Workers
29
Professional organizations are also involved in supporting science and
technology edu-cation
in the schools. Since 1979, the New York Academy of Sciences'
Education Department
has worked to enrich and improve mathematics, science and technology
education in New York
City. The American Association for the Advancement of Science (AAAS)
sponsors a grass-roots
program, called Project 2061, designed to improve science education
programs in Ameri-can
schools. This project has developed books, CD-ROMs, and on-line tools
to assist teachers
in making all high school graduates science literate. 47
Regional Cooperation
Regional cooperation is also being forged to address IT worker
shortages in certain
geographic areas. In the metropolitan Washington, D. C. area,
representatives of regional busi-ness
groups, area universities and the technology councils of Northern
Virginia, suburban Mary-land,
and Baltimore are establishing an alliance to address the area's
shortage of workers with
information technology skills. 48
30 America's New Deficit: The Shortage of Information Technology
Workers
Federal Initiatives to Raise the Technical Skills
of the American Work Force
Technology has fundamentally changed the skills Americans need to
flourish in the
world of work. For example, most work places rely heavily on computer
and telecommuni-cations
technologies. The Clinton Administration has promoted policies and
programs to
help prepare today's and tomorrow's work force for a
technology-intensive, 21st century
economy.
Mathematics and Science Education. Technical skills are built on a
foundation of math-ematics
and science education that begins in a student's early years. The
Goals 2000 Educate
American Act of 1994Ñ designed to raise U. S. students' competenciesÑ
set an ambitious
national goal: "U. S. students will be first in the world in science
and mathematics achieve-ment."
While much of the responsibility for achieving this goal rests with
school systems at
the state and local levels, the Federal government plays a role in
encouraging improvements.
Federal investments for improvements in mathematics and science
education at the pre K-12
education levels focus on enhancing teacher skills, improving science
and mathematics
curricula, promoting system reforms, and other areas.
The Federal government also works as a catalyst to inject new vitality
into U. S. undergradu-ate
science, mathematics, engineering, and technology education by
investing in organiza-tional
reform, faculty enhancement, curriculum improvement programs, and
student support.
The Federal government is also a major supporter of graduate
education, financing fellow-ships
and traineeships in pre-and post-doctoral programs. Federal research
grants also
support graduate students by providing funds for assistantships.
Opening the Doors to College. Over half of the new jobs created in the
last three years
require higher-level skills and training beyond what a high school
diploma affords. To help
prepare Americans for such jobs, the President set a goal of making
two years of collegeÑ the
13th and 14th years of educationÑ as universal for young Americans as
the first 12 are today.
To support this goal, the President initiated a strategy to make
college more accessible and
affordable. With Hope Scholarships, for students in the first two
years of college, most
taxpayers will be eligible for a tax credit equal to 100 percent of
the first $1,000 of tuition and
fees and 50 percent of the second $1,000. With the Lifetime Learning
Credit, for those
beyond the first two years of college or taking classes part-time to
upgrade their job skills,
most families will receive a 20 percent tax credit for the first
$5,000 of tuition and fees
through 2002, and for the first $10,000 thereafter.
School-to-Work Opportunities. The School to Work Opportunities
Initiative is serving as
the catalyst for the creation of state and local systems to better
prepare all students for college
and careers. School-to-Work funding is being used to create systems
that integrate academic
and vocational learning, expose students to a range of career
possibilities, expand opportuni-ties
for students to engage in internships or other work experiences, and
forge links between
high schools and post-secondary education institutions.
(continued on next page)
America's New Deficit: The Shortage of Information Technology Workers
31
Federal InitiativesÑ continued
Technological Literacy. Today, technological literacyÑ the ability to
use computers and
other technology to improve learning, productivity, and performanceÑ
is a new basic that our
students must master. Yet, American schools are not prepared for the
technological era.
About half of all teachers have little or no experience with
technology in the classroom.
Only 4 percent of schools have a computer for every five studentsÑ a
ratio that allows regular
use by each student. Only 9 percent of classrooms have connections to
the Internet.
In 1995, President Clinton challenged the Nation's parents, teachers,
and government, com-munity,
and business leaders to work together to ensure that all children in
American are
technologically literate by the dawn of the 21st century. Four goals
guide the technology
literacy agenda:
1. Connect every school and classroom in America to the information
superhighway.
2. Provide access to modern computers for all teachers and students.
3. Develop effective and engaging software and on-line learning
resources as an
integral part of the school curriculum.
4. Provide all teachers the training and support they need to help
students learn
through computers and the information superhighway.
America's Technology Literacy Challenge: In his 1996 State of the
Union Address, Presi-dent
Clinton asked Congress to fund a $2 billion, five-year Technology
Literacy Challenge to
catalyze state, local and private sector partnerships in each state to
achieve the four educa-tional
technology goals. Congress supported the President's request for
first-year funding and
appropriated $200 million for grants to states to launch this
challenge.
The Technology Innovation Challenge Grants: This component of the
technology literacy
challenge invites school systems, colleges, universities, and private
businesses to form
partnerships to development creative new ways to use technology for
learning. Each Federal
dollar is matched by more than 3 to 1 by local and private funds.
Universal and Affordable Access to Advanced Telecommunications: The
Telecom-munications
Act of 1996 states that schools and libraries should have affordable
access
to telecommunications services for educational purposes. In May 1997,
the Federal Com-munications
Commission released a Report and Order on Universal Service which
makes
most elementary and secondary schools eligible for discounts ranging
from 20 to 90
percent on all commercially available telecommunications services,
Internet access, and
internal connections.
TIIAP: The U. S. Department of Commerce's Telecommunications and
Information
Infrastructure Assistant Program is merit-based and provides matching
grants to non-profit
organizations such as schools and libraries. The grants are used to
purchase equip-ment
for connection to networks, including computers, video conference
systems, net-work
routers, and telephones; to buy software for organizing and processing
informa-tion;
to train staff, users, and others in the use of equipment and
software; and to pur-chase
Internet access.
VII. SUMMARY AND FURTHER ACTIONS
Just a few years ago, Java was coffee, C was a passing grade, and web
masters had eight
legs. Today, experts in Java computing and C programming command a
premium in the labor
market, and an army of human web masters keeps information updated on
the rapidly expand-ing
World Wide Web. The labor market for IT workers is expanding and
shifting rapidly, driven
by the unrelenting advancement and diffusion of information
technology. New skills are con-stantly
in demand, and IT occupations are evolving in new directions. As a
result, employers
are having difficulty obtaining the numbers of adequately trained IT
workers they need.
The United States has much at stake in ensuring an adequate supply of
IT workers;
severe shortages would compromise organizational productivity and the
Nation's ability to
develop leading-edge products and services, as well as the growth and
global competitiveness
of important U. S. industries.
In a tight labor market, employers are resorting to a number of
strategies to fulfill their
IT skill needs, such as aggressive recruiting programs that include
financial and quality of
working life sweeteners, tapping foreign sources of labor, retraining
existing staff in IT skills,
and forming partnerships with the academic community to expand the
pool of IT workers.
As the Office of Technology Policy worked to develop this snapshot of
a rapidly mov-ing
situation, we found the information and data inadequate to completely
characterize the
dynamics of the IT labor market. For example, information is lacking
on the supply of IT
workers flowing from employer provided training and from academic
programs other than
computer and information sciences, both believed to be important
training grounds for the U. S.
IT work force.
Improving our understanding of one of the country's most critical
labor markets is an
important goal for the United States. Accurate and timely information
is essential for the effi-cient
functioning of labor markets-for potential employees who need to know
where the jobs
are and what skills are needed, for employers who need to identify and
recruit highly trained
workers, and for the educators and trainers who are responsible for
work force development.
America's New Deficit: The Shortage of Information Technology Workers
33
A Need for Better Indicators and Statistics
Better information about where computer and information science
graduates go, what
kind of jobs they find, and what skills they need in those jobs would
help educators do a better
job of curriculum development and career counseling, and provide
students with a roadmap for
plotting their educational and career paths. 49 The report, Leading,
Concurrent, or Lagging: The
Knowledge Content of Computer Science in Higher Education and the
Labor Market, released
by the U. S. Department of Education and the National Institute for
Science Education in May
of 1997, is a step towards making such information widely known.
In addition, since information technology continues to play an ever
increasing role
in global competition and economic growth, there may be a need to
develop new economic
indicators that relate to the information technology-related
production, capacity, and evolution-ary
stage of advanced and industrializing countries that would provide a
new view of each
country's current competitive position and potential. 50
The Need for a Better Understanding of Linkages
More data is needed on linkages between engineering, science and
technology educa-tion
and training, and work place needs. The National Science Foundation
recently published a
report, based on surveys of technical education in two year colleges,
which begins to document
linkages between their programs and local businesses. Such analysis
could be extended to
four-year degree granting universities.
The Need To Better Understand the IT Training Industry
Many IT workers currently obtain their skills through a rapidly
emerging IT training
industry that has developed largely outside the formal educational
system. More data is needed
on the structure of this IT training industry, how it responds to
rapidly changing technology,
what the costs are to obtain significant IT skills, and whether
workers interested in obtaining
such training are able to obtain the financial assistance through
existing student aid programs.
The Need For Stakeholder Partnerships
A number of stakeholders from industry and the academic community have
begun to
address the need to increase the supply of highly skilled IT workers.
However, a broader range
of public-private partnerships at both the national and regional
levels may be needed to erase
any long-term shortages of critical IT skills that would constrain
business and organizational
performance, the ability of Americans to fill high-wage jobs, and
growth of the U. S. economy.
34 America's New Deficit: The Shortage of Information Technology
Workers
ENDNOTES
1 ÒHelp Wanted: The IT Workforce Gap at the Dawn of a New Century,Ó
The Information Tech-
nology Association of America.
2 ÒTrendsetter Barometer,Ó Coopers & Lybrand, July 1996.
3 Stanford Computer Industry Project Software Website:
http://www-scip.stanford.edu/scip.
4 ÒGlobal Competitiveness of the U.S. Computer Software and Services
Industries,Ó U.S. Interna-
tional Trade Commission, June 1995.
5 The Wall Street Journal, May 8, 1997.
6 The Washington Post, June 3, 1996.
7 National Science Foundation, Division of Science Resources Studies.
8 Ibid.
9 ÒComputer Technology Research,Ó The Computer Research Association.
10 Ibid.
11 ÒForget the Huddled Masses: Send Nerds,Ó Business Week, July 21,
1997.
12 Business Week, March 10, 1997.
13 The Washington Post, April 26, 1997.
14 ÒComputer Technology Research,Ó The Computer Research Association.
15 Automotive Engineering, May 1997.
16 ÒGlobal Competitiveness of the U.S. Computer Software and Services
IndustriesÓ, U.S. Interna-
tional Trade Commission (June 1995).
17 Ibid.
18 San Jose Mercury News, May 24, 1997.
19 ÒWanted: Qualified Software Engineers,Ó Computing Canada, September
1996.
20 The Washington Post, October 11, 1996.
21 Ibid.
22 Business Week, March 10, 1997.
23 The Washington Post, June 3, 1996.
24 The Washington Post, June 3, 1996.
25 The Washington Post, June 3, 1996.
26 ÒHelp Wanted: The IT Workforce Gap at the Dawn of a New Century,Ó
The Information Technol-
ogy Association of America, Arlington, Virginia.
27 Ibid.
28 National Science Foundation, Division of Science Resources Studies.
29 Information Technology Association of America.
30 ÒDebate Over Professional Visas Heats Up,Ó http://www.msnbc.com.
31 Ibid.
America's New Deficit: The Shortage of Information Technology Workers
35
32 Bay Networks Inc., a Silicon Valley communications company, lost a
five-year programmer
making $80,000 to a consultancy offering two years guaranteed at
$300,000 per year (Business Week,
March 10, 1997).
33 Charles Schwab Corp now pays employees a $3,000 finderÕs fee for
referrals to technology
applicants (Business Week, March 10, 1997).
34 The Washington Post, June 3, 1996.
35 Washington Business Journal, December 16, 1996.
36 ÒForget the Huddled Masses: Send Nerds,Ó Business Week, July 21,
1997.
37 The Washington Post, October 11, 1996.
38 Washington Business Journal, December 16, 1996.
39 IndustryÕs Role in the Reform of Mathematics, Science and
Technology Education. See the
Triangle Coalition for Science and Technology Education homepage:
http://www.triangle-
coalition.org.
40 Congressional Testimony (ITAA), April 24, 1997.
41 Computerworld, June 16, 1997:1.
42 ÒWanted: High-Tech Labor, Will Train,Ó The Austin Chronicle, Vol.
14, No. 49, http://
www.auschron.com/issues/vol14/issue49/pols.labor.html.
43 See a description of Broome Community College /Industry
Partnerships: http://scholar.lib.vt.edu/
ejournals/CATALYST/V23/N2/habel.html.
44 ÒToward An Educated Workforce: Transforming the Industrial
Workforce Into an Information
WorkforceÓ, The Software Publishers Association.
45 See description of the Space Academy for Educators In BoeingÕs News
Release section at http://
www.boeing.com.
46 See description of Discover Engineering Science Camp in BoeingÕs
News Release section at
http://www.boeing.com.
47 See description of Project 2061 on a link on the homepage of the
American Association for the
Advancement of Science (AAAS), http://project2061.aaas.org.
48 The Washington Post, April 19, 1997.
49 ÒComputer Technology ResearchÓ, The Computer Research Association.
50 ÒThe Competitiveness of the American Software Industry,Ó Dr. Harold
A. Rubin, Chair, Computer
Science Department, Hunter College, CUNY.
51 ÒHelp Wanted: The IT Workforce Gap at the Dawn of a New CenturyÓ,
The Information Technol-
ogy Association of America, Arlington, VA.
52 U.S. dollar is equal to 1.38 Canadian dollars as of July1, 1997
53 Ibid.
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