According to Cyberstates 2018, the annual IT Industry outlook report published by CompTIA, last year the number of tech jobs in the United States grew by 200,000, to approximately 11.5 million. The tech industry contributed $1.6 trillion to the economy — the largest individual sector in America. There doesn't seem to be any stopping this technology employment boom.
Role of IT in economy
The technology employment boom is playing a prominent role in state economies as well. In 22 U.S. states, the IT sector was among the top five economic players and it was among the top 10 in 42 states.
Todd Thibodeaux, president and CEO of CompTIA, clarified that the local, regional, and federal economies’ direct gains due to the technology sector was just one part of the complete picture.
He went on to explain that technology was leading the way for progress, innovation, and development in almost every industry including:
- Highly specialized manufacturing
- Building smart communities
- Power and energy
Job trends in IT
They predict that the current trend — an annual increase in 200,000 tech jobs since 2010 — will prevail in 2018 as well and even more so in 2019. The U.S. Bureau of Labor Statistics expects the core technology jobs to reach 626,000, in 2026. If you consider the number of jobs created due to retirements and career-shifts, then this number could be as high as 1.2 million, in 2026.
The demand and supply mismatch also continues nationwide, with experts confirming that more jobs than qualified applicants were currently available.
The number of jobs in new age technologies grew by 27 percent every year, throughout the U.S. This further substantiated the trend that showed increased investments in sectors such as:
- Internet of Things
- Artificial intelligence
- Machine learning
- Self-driving vehicles
- Augmented reality
- Virtual reality
These technology jobs also offered better pay than those in other sectors. The Cyberstates 2018 report revealed that the average annual pay in the IT sector was $112,890, a mindboggling 107 percent above $54,420, the national average for all other sectors.
Other findings of Cyberstates 2018
Other key findings of the research were as follows:
In 2016, the tech sector grew in 36 states. This pattern continued and in 2017, 38 states showed an increase in the number of tech jobs. The five states contributing the maximum number of new jobs were:
- California (43,600)
- Texas (13,400)
- Michigan (13,200)
- Florida (12,000)
- New York (10,400)
In terms of percentage growth, the top states that created the most new IT jobs in 2017 were:
- Utah (+ 3.6 percent)
- Michigan (+ 3.4 percent)
- North Carolina (+3.1 percent)
- Washington (+ 2.9 percent)
- Idaho (+ 2.8 percent)
The top five states with regard to the size of the technology workforce in proportion to other sectors were:
- Massachusetts (10.6 percent)
- Washington (9.9 percent)
- Virginia (9.9 percent)
- The District of Columbia (9.7 percent)
- Colorado (9.7 percent)
The gender split in the sector remained unchanged from 2016 with men forming 66 percent and women 34 percent of the total workforce. At 39.8 percent, the District of Columbia had the maximum number of women workers in the sector. South Dakota, North Carolina, Wisconsin, and Missouri were the other states in the top five, in this statistic.
For the sixth straight year, the number of technology businesses grew. The number at last count was 503,000.
New businesses drive the technology employment boom
At present, 6.7 million people work in the technology industry. Where is this technology employment boom coming from? In the last quarter century, new businesses (operating for less than five years) created almost all new jobs added to the private sector.
In stark contrast, according to Jason Wiens and Chris Jackson at the Kauffman Foundation, from 2008 to 2011, older tech companies did away with more jobs than they added. This trend was evident for all except eight years during this period (you should also be aware that new sectors create more jobs than traditional ones).
Job growth due to automation
If we were to learn from history, increased automation should result in job creation in all fields in the economy. The Atlantic’s James Bessen pointed out that e-discovery software applications had replaced the demand for a huge chunk of paralegal tasks.
Despite this, the number of jobs for both lawyers and paralegals grew well above the national average. Bessen explained that since 1980, jobs that required an above average use of technology, grew much faster — 0.9 percent per year — than other more computer independent jobs.
This logic-defying trend was evident because automation brought down the cost of the service, leading to a surge in demand. This increased demand led to more job creation as opposed to job losses, as was anticipated when the technology first emerged.
With an increase in demand for a product or service, there is often an increase in new jobs as well. The jobs, which emerge post-automation, are at a higher skill level than those that technology replaced. Most often, these jobs were filled with local workforce because:
- Companies could now afford to pay as per national norms (due to increased business).
- Since the older, less skilled monotonous work was automated, the jobs carried out by outsourced employees ceased to exist.
Automation and outsourcing
The latest elections brought to the fore the impact of outsourcing on the customer service sector — which outsourced the maximum number of jobs in the past. Both outsourcing and automaton have in the past negatively affected this industry.
Economic advantages led to the export of several jobs in the sector to countries such as India and the Philippines, where the operations were more cost-effective. The size of the global contact center business is pegged at $300 billion-$350 billion. Approximately a quarter of this (20 percent-25 percent) is outsourced.
During the call-center boom, quality of customer service plunged because the customers had to interact with foreigners with inadequate training and poor language skills. All of that is changing due to technology.
Customers now prefer to use chats or email as opposed to telephone interactions. This is driving quality of interaction up while keeping cost of operations low because of less dependence on phone-contact centers.
The advent of smartphones, apps, and interconnected devices has made data collection more efficient.
Emerging technologies used in these platforms track the user’s every move, and discern the right facts from this data, making every customer interaction extremely effective and pocket-friendly. Therefore, the tasks that once required 500 foreigners can now be accomplished by 40 U.S. residents.
Growing automation is extending the tech boom
The growing automation due to Big Data, mobile app innovation, cloud computing, blockchain, and machine learning that we are seeing in the U.S. today is a continuing economic opportunity for the country and is a main catalyst for the technology employment boom.
Automation is expanding the scope of American jobs across the technology sector. When it comes to advanced quality work in the tech sector, the U.S. has an edge over most other markets. It appears evident that the technology employment boom is likely to continue at least in the near term.
Featured image: Pixabay
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