The
Supply of
Information
Technology
Workers
in the
United States
Peter Freeman and William Aspray
This study was supported by Grant No. EIA-9812240 of the National Science
Foundation. Any opinions, findings, conclusions, or recommendations expressed in
this publication are those of the author(s) and do not necessarily reflect the view of
the organizations or agencies that provided support for this project.
Coordinated by the Computing Research Association (CRA), 1100 Seventeenth
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Copyright 1999 by the Computing Research Association (CRA).
Executive Summary 9
Chapter 1. Political Context
15
◆ What Is This Report’s Evaluation of Earlier Studies? 15
◆ How Does Recent Legislation on H-1B Visas Affect Any Shortage? 19
Chapter 2. Information Technology Workers
25
◆ What Is Information Technology? 25
◆ Who Is an IT Worker? 29
◆ How Many IT Jobs Are There, and Where Are They Located? 34
◆ What Skills Does an IT Worker Need in Order to Be Effective? 37
◆ Why Is Information Technology Becoming So Prevalent in Our Society? 39
◆ What Are the Characteristics of Information Technology
That Affect IT Labor? 41
Chapter 3. Demand, Constraints, and Consequences 45
◆ What Are the Dynamics of the Marketplace and the Dangers
of Government Intervention in the IT Labor Market? 45
Table of Contents
i
◆ What Factors Limit the Ability of the Government, Industry,
University System, and Professional Community to
Improve the Match between Supply and Demand? 46
◆ What Are the Costs of an IT Worker Shortage? 48
◆ What Are the International Considerations in Dealing
with a National Worker Shortage? 49
Chapter 4. Worker Shortage 53
◆ How Does One Determine Whether There Is a Labor Shortage? 53
◆ Is There a Shortage of IT Workers? 54
◆ Where Are IT Worker Shortages Occurring? 68
Chapter 5. Supply—The Degree Programs 71
◆ What Are the Sources of IT Workers? 71
◆ How Have Career Paths for IT Workers Changed Over Time? 73
◆ What Is the Role of High Schools in the Supply System? 75
◆ What Is the Role of Two-Year College Programs in the Supply System? 78
◆ What Is the Role of Four-Year College Programs in the Supply System? 81
◆ What Is the Role of Graduate Programs in the Supply System? 88
Chapter 6. Supply—The Non-Degree Programs 99
◆ What Non-Degree Programs Do Traditional Colleges and
Universities Offer? 101
◆ What Other Groups Supply Non-Degree Programs? 102
◆ What Is the Role of Corporate Universities in Training and
Educating IT Workers? 103
◆ What Is the Role of Distance Learning in Educating the IT
Workforce? 106
◆ Is Retraining Occurring, and if so, How Long Does it Take to
Retrain for an IT Job? 109
ii
Chapter 7. Women, Minorities, and Older Workers 111
◆ How Do Women Relate to the Worker Shortage? 111
◆ How Do Minorities Relate to the Worker Shortage? 114
◆ How Do Older Workers Relate to the Worker Shortage? 115
Chapter 8. Seed-Corn Issues 117
◆ Is the Strong Industrial Demand for IT Workers Harming the
Educational System? 117
Chapter 9. Data Issues 121
◆ What Are the Sources of Data on IT Workers? 121
◆ What Are the Limitation of Existing Data on the IT Workforce? 124
Chapter 10. Recommendations 127
1. Federal and State Governments 127
2. Higher Education 132
3. Industry 136
4. Professional Societies 138
5. Individuals 140
Appendices:
A. Methodology 147
B. Related Studies 149
C. About the Authors and the Sponsoring Organization 151
D. Study Group Members 153
E. Computing Research Association Board of Directors 155
F. External Reviewers 157
G. Acknowledgments 159
iii
9
The purpose of this study is
to improve understanding of the
supply of and demand for infor-
mation technology (IT) workers in
the United States, and the surround-
ing contextual issues. In conducting
this study, the authors received
support from the National Science
Foundation, collaboration from five
other professional societies, and
guidance from the Computing
Research Association Board of
Directors.
There are four major
contributions in this study:
1. Evaluation of data. The
report identifies and evaluates all the
major sources of statistical informa-
tion relevant to this subject. The
study group found that federal data
are by far the most important and
reliable, but that they have some
serious shortcomings related to
untimely reporting, occupational
descriptions that are out of date
and based on ambiguous job titles,
and incompatibilities between
supply and demand data collected
by different agencies.
There are other data sources.
However, it is questionable whether
results drawn from geographically
restricted and occupationally
restricted data studies of IT work-
ers can be generalized to the
national IT labor force; and many
of the national studies of IT
workers done by private organiza-
tions have methodological weak-
nesses (see chapter 9).
2. Definition of ‘IT Worker.’
This report outlines a way of
distinguishing IT workers from a
much larger class of workers whose
jobs are enabled by information
technology. It then classifies IT
workers into four categories
(conceptualizers, developers,
modifiers/extenders, and support-
ers/tenders) based not on their job
titles, but on skills and knowledge
required to do the job. An initial
test of this categorization scheme in
the State of Georgia has illustrated
its value (see chapter 2).
3. Description of the Supply
System. Some of the participants in
the national debate identified
bachelor’s degree training in com-
puter science as the principal supply
source of IT workers. This report
presents a detailed description of a
much more extensive supply system,
E x e c u
t
i
v e
S u m m a r y
10
including not only majors in twenty
different IT-related disciplines at the
associate, bachelor’s, master’s, and
doctoral levels, but also many
people majoring in science, engi-
neering, business, and even non-
technical disciplines who often take
some course work in IT subjects
(see chapter 5).
The supply system also
includes an increasingly important
and rapidly growing continuing-
education element. This continuing
education is supplied not only by
the traditional higher education
system through short courses and
certificate programs, but also by
for-profit educators and by
companies that are employing the
IT workers. New modes of
delivering instruction, such as
asynchronous learning over the
Internet, are rapidly being deployed
(see chapter 6).
4. Analysis of shortage claims.
The report evaluates the question of
whether there is a shortage of IT
workers in the United States. The
study group determined that the
data are inadequate to ascertain
what mismatch there is, if any,
between national supply and
demand. Therefore the report
makes use of a variety of other
quantitative and qualitative kinds of
evidence. These include: secondary
indicators, such as wage growth
and labor certificates awarded,
based on federal data; quantitative
studies restricted to specific geo-
graphical regions or specific IT
occupations; private studies of the
national IT labor market whose
methodologies have come under
question; anecdotal evidence about
how employers have acted in their
search to recruit or retain workers,
or take alternative solutions such as
refusing work or replacing workers
by machines; and other kinds of
qualitative evidence.
The preponderance of
evidence suggests that there is a
shortage of IT workers, or at least a
tight labor market. None of this
evidence has the certainty of a direct
count of supply and demand, and
without this kind of direct count it
is impossible to distinguish an actual
shortage from a mere tightness in
the labor market. Moreover, there
are credible reasons for questioning
the evidentiary value of virtually any
piece of evidence that is available
(see chapter 4).
One of the problems with the
national debate is that IT workers
have been treated as a single,
undifferentiated group. However,
the phrase ‘information technology
worker’ encompasses many differ-
ent occupations that require a wide
array of skills and knowledge. It
would be helpful in future discus-
sions to segment the class of IT
workers into classes of occupations
that have similar levels of knowl-
edge and skill. It would be surpris-
ing, given the dynamism and
demand in the IT labor market, if
there were not some spot shortages
(and some spot surpluses). Unfor-
tunately, existing data do not allow
this kind of segmented analysis.
Of the many contextual issues
that need to be considered to gain a
full understanding of the supply and
demand of IT workers, this report
examines four:
5. Political context. The study
group evaluated the reports by the
Information Technology Associa-
tion of America (ITAA) and the
Department of Commerce, as well
as the criticism of these reports by
the U.S. General Accounting Office
11
(GAO). We agree with GAO that
the low response rates in the surveys
of industrial demand are a serious
weakness in the ITAA and Com-
merce reports; but this speaks
against the quality of the evidence,
not necessarily against the conclusion
that there is a shortage. The ITAA
and Commerce reports can also be
faulted for their narrow focus on
recipients of computer science
bachelor’s degrees when discussing
the supply of IT workers (see
chapter 1).
The legislation providing a
temporary increase in the number
of temporary visas permitted
annually under the H-1B visa
program was also reviewed. CRA
and the other professional societies
participating in this study did not
take a position on the H-1B increase
when it was being debated in 1998,
and it is not our intention to
second-guess the program now. We
believe that the legislation probably
will increase the total supply of
workers during a period of epi-
sodic higher demand created by the
Y2K problem, while limiting the
risk to the indigenous supply system
through a sunset clause on the
increase in visas awarded (see
chapter 1).
6. Types of demand. This report
differentiates two kinds of demand.
There is episodic demand, such as this
country is experiencing currently as
it struggles with the Y2K problem
and the sudden spurt in Internet
activities. There is also a long-term
demand, created by fundamental
changes in technology and society.
The long-term demand for IT
workers is driven by the relentless
decrease in the size of information
technology, as well as its relentless
increase in performance, reliability,
flexibility, and price-for-perfor-
mance. Because of these changes,
information technology is rapidly
being adopted by every sector of
American society and made a
fundamental part of organizational
operations and personal activity.
Perhaps the greatest weakness in the
H-1B legislation is that it focuses on
a short-term problem created by an
episodic demand. It does not
address the long-term problem of
providing an adequate supply to
meet the demand for IT workers
that is likely to continue to grow
unabated well into the new millen-
nium (see chapter 3).
7. Limitations on action. Even
when organizations recognize a
mismatch between supply and
demand that they would like to
overcome, there are almost always
limitations on their ability to act. A
government organization cannot
regulate supply and demand; it can
only provide incentives, such as
fellowships, to encourage students
to choose an area of expertise that
appears to be in short supply. But it
is difficult for a government to
stimulate labor supply by just the
right amount since the market is
constantly changing, knowledge
about supply and demand is
imperfect and difficult to obtain in a
timely fashion, and there are often
unforeseen consequences of any
government action.
Industry has its own con-
straints. For example, companies
are forced by short product life and
short product development cycles
to hire new employees or reassign
existing workers in ways that do not
require a lot of break-in training
before they can be productive.
12
The traditional higher educa-
tion system is constrained by its
inability to change directions quickly.
This results from its limited re-
sources to allocate to new or
growing disciplines, the long-term
commitment colleges and universi-
ties make in buildings and capital
equipment or in tenured faculty
appointments, and its deliberative
style of decision-making (see
chapter 3).
8. International considerations.
There is a rising international
demand for information technol-
ogy. Companies throughout the
world are taking advantage of the
changes in information technology
that allow them to use it to improve
their operations. There is increasing
global competition to supply IT
products and services. International
and foreign firms are thus compet-
ing with U.S. firms for the skilled
workforce to develop IT products
and services and place them into
operation. Only a few countries
(e.g., India and Ireland) have a
surplus of IT workers; and there is
strong competition from many
countries, including their home
countries, for these workers. The
United States will have to assure an
adequate supply of IT workers if it
wants either to retain its world lead
in the IT sector, or remain competi-
tive in other industry sectors that
rely on information technology.
Foreign workers can play an
important role in the United States,
but they are unlikely to help meet
our growing demand for IT
workers in this manner (see
chapter 3).
Other topics. This study could
only touch on a number of other
topics that are important to ad-
equately understand IT workforce
issues. A number of groups are
underrepresented in the IT
workforce and in the educational
programs that prepare people for
careers as IT workers. These
include women, Hispanics, African
Americans, and Native Americans.
If these groups were represented in
the IT workforce in proportion to
their representation in the U.S.
population, this country would have
more than an adequate supply of
workers to fill even the most dire
estimates of a shortage. Because
other studies have investigated the
underrepresentation of women or
minorities in professional work,
scientific and engineering fields,
including the computing profession,
this study chose to focus its efforts
on other issues that have been less
thoroughly investigated. However,
some basic information and
statistics about the issues concerning
the participation of women and
minorities in the IT field have been
collected here. Some of the issues
concerning women mentioned here
are the lack of adequate exposure
to computers during the K-12 years,
the scarcity of role models, and
perceptions about what it is like to
be an IT worker (e.g., competitive
work environment, focus on
machines rather than people, and so
on). This study found many of the
issues for minorities to be similar to
those for women; but there is the
added problem that minorities are
not as likely as white males or
women to attend college or gradu-
ate school. It is clear that these
issues of underrepresentation need
more attention than they could be
given in this study (see chapter 7).
It may also be true that older
workers are underrepresented in the
IT workforce. There is certainly a
widespread perception that pro-
gramming is an activity for the
young, and that IT workers tend to
13
get “burned out” and leave the field
by the age of 40. The absence of
almost any data precluded this from
being a major topic of study in this
report. The study group looks
forward to the examination of this
important issue in a forthcoming
study by the National Research
Council (see chapter 7).
Some people are concerned
about a seed-corn problem: that
the high industrial demand for IT
workers is siphoning off too many
graduate students and faculty from
the universities, leaving an insuffi-
cient number to educate the next
generation of IT workers. This
study detected preliminary signs of
a seed-corn problem. The coordi-
nated efforts by government,
industry, and academia to solve a
seed-corn problem in computer
science that occurred around 1980
are recounted. Some of the
problems today are the same as in
1980, such as the rapid increase in
undergraduate enrollments placing
heavy loads on faculty. However
there are also some differences:
universities today have better
research equipment, compared
with that in industry; than they did
then; however, research support
now emphasizes short-term
research too much, and it is harder
for industry to coordinate volun-
tary restraint on faculty and student
raiding today because the industrial
employers of research computer
scientists are today much more
widely spread across many differ-
ent industries (see chapter 8).
The authors struggled with
the decision whether to include
recommendations in the report. The
mandate for this study was to
provide an understanding of the
issues surrounding the supply of
and demand for IT workers, not
to provide a call for action. In
most policy reports, the recom-
mendations have primacy and the
analysis is included merely in a
supporting capacity. The study
group did not want the presence
of recommendations to under-
mine the attention paid to the
analysis. Also, as a study group, we
do not have any particular standing
within the government, industrial,
or academic sectors from which to
recommend actions.
On the other hand, a number
of important issues were raised
and actions suggested by the study
group during the course of the
study. Given the wide range of
knowledge and experience repre-
sented by the study group, we
decided it would be useful to put
these suggestions forward in the
hope that they will stimulate
further discussion and action.
Mostly, the recommendations
identify a problem and a general
course of action without trying to
be specific about implementation
mechanisms.
The thirty-seven recommenda-
tions are grouped around a small
number of issues: data-collection
practices, industry-academic coop-
eration, industry hiring and training
practices, certification of educa-
tional and training programs,
broadening the supply pipeline,
improving the research and teaching
environment to retain and recruit
faculty, and curriculum develop-
ment. The recommendations are
organized according to intended
audience: government, higher
education, industry, professional
societies, and individuals (a summa-
ry of the recommendations can be
found at the end of chapter 10 as
box 10-1).
14
15
What Is This
Report’s Evalu-
ation of Earlier
Studies?
Human resource issues related
to information technology have
frequently been on the national
agenda since the early 1960s, when
the National Academy of Sciences
(NAS) and the National Science
Foundation (NSF) began preparing
studies and collecting data on this
subject. These efforts supple-
mented data that have long been
collected by the Bureau of Labor
Statistics (BLS).
The most recent national
debate began in 1997 with a report
prepared by the Information
Technology Association of America
(ITAA), a trade association repre-
senting 11,000 companies. ITAA
reported a large shortage of IT
workers in large and mid-size U.S.
companies. In 1998, ITAA pub-
lished a second report based on a
larger sample of companies, which
indicated an even more serious
shortage of workers. The Depart-
ment of Commerce’s Office of
Technology Policy then issued a
report that largely mirrored the
conclusions in the original ITAA
report. The General Accounting
Office (GAO) criticized the meth-
odology used to gather the data put
forward by both ITAA and
Commerce, and questioned their
conclusions about a shortage.
Individuals and private organiza-
tions weighed in on the debate,
which quickly crystallized around
proposed legislation to increase the
number of temporary H-1B visas
that could be awarded annually.
Compromise legislation was passed
by Congress in October 1998 and
subsequently signed into law.
However, it is clear that this
legislation does not end the national
discussion of IT workers. The
legislation is temporary, lasting only
three years, and it addresses only
one aspect of this complex labor
issue. Questions about the treat-
ment of older IT workers, for
example, were largely ignored in the
H-1B debate. The importance of
IT workers to national competitive-
ness and national wealth, and the
dynamic nature of information
technology, which is rapidly being
incorporated into every sector of
C h a p t e r 1 . P o l i t i c a l C o n t e x t
16
the U.S. economy, strongly suggest
that issues surrounding the IT
workforce will be part of national
policy discussions for years to
come.
Although this report primarily
addresses current and future issues
about IT workers, this chapter is
devoted to an examination of some
aspects of the political context
concerning IT workforce issues in
the United States. This analysis
begins with a review of some of
the arguments presented in the
ITAA and Commerce reports.
The discussion will focus
primarily on vacancy rates, which
are used as a principal kind of
evidence in the two ITAA studies.1
The first study, undertaken by the
Cato Institute, a libertarian think-
tank, involved telephone interviews
with randomly chosen companies
(in various sectors, not just IT
companies) that employed 500 or
more workers (counting all their
workers, not just IT workers). Only
271 of 2,000 companies responded,
giving a response rate of 14
percent. The second study, under-
taken by the Continuing Education
Division of Virginia Tech, was also
a telephone survey, but this time the
targets were companies with 100 or
more employees. From a sample
size of 1,500 companies, 532
interviews were completed, giving a
somewhat better but still low
response rate of 36 percent. The
first study argued that 190,000 IT
jobs were unfilled in the United
States in 1996. The second study
claimed 346,000 IT vacancies—
representing a 10-percent vacancy
rate.
GAO argued that the low
response rates and small sample
sizes made the results of these
surveys highly questionable.2 It is
true that the results might be
skewed because companies that
were experiencing more serious
shortages may have been more
likely to respond. However, there is
no hard evidence from any statisti-
cally valid study that refutes either
the ITAA results or the presence of
an IT worker shortage. While the
ITAA results may not have the
weight of scientific evidence, they
do suggest that many U.S. compa-
nies are having difficulties filling
their IT positions. This evidence is
consonant with many other anec-
dotal reports heard while research-
ing this study.
This finding is bolstered by a
GAO observation that the unem-
ployment rate for IT workers was
only 1.3 percent in 1997, which is
1 “Help Wanted: The IT Workforce Gap at the Dawn of a New Century,” Information
Technology Association of America, Arlington, VA, 1997; “Help Wanted 1998: A Call for
Collaborative Action for the New Millennium,” Information Technology Association of
America and Virginia Polytechnic Institute and State University, March 1998. For a more
detailed critique of the first ITAA report, see 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. It persuasively
argues that there are methodological problems with one after another of the kinds of
evidence of shortage given in the ITAA report.
2 See, for example, U.S. General Accounting Office, “Information Technology: Assessment
of the Department of Commerce’s Report on Workforce Demand and Supply,” GAO/
HEHS-98-106, March 1998; GAO, “Information Technology Workers: Employment and
Starting Salaries,” GAO/HEHS-98-159R, May 1998.
17
much lower than the 4 percent
often considered by economists to
represent “full employment.” In
fact, even when the IT unemploy-
ment rate hit its historical high for
recent times—3 percent in 1991—it
was below the 4 percent threshold
indicating full employment. This is
perhaps to be expected, given that
most professional occupations that
are filled primarily by highly edu-
cated workers have low unemploy-
ment rates.3 Since 1987 the IT
unemployment rates have tracked
up and down in parallel with the
national general unemployment rate,
although the IT rates are consistently
lower by a factor of 2 to 3. Given
that the general unemployment rate
is currently at a 25-year low, it is not
at all surprising that the IT labor
market is experiencing some
tightness.
The Department of Com-
merce report,4 like the first ITAA
report, compares the projected
number of IT jobs to the supply as
an indicator of a shortage. For
demand, Commerce used a Bureau
of Labor Statistics (BLS) projection
that between 1994 and 2005 the
number of IT jobs in the United
States would increase annually by
95,000. Commerce contrasted the
projected annual increase in demand
with data from the National Center
for Education Statistics (NCES).
The NCES data indicated that only
25,000 bachelor’s degrees in com-
puter science are produced annually
in the United States—and that these
numbers have been steadily decreas-
ing from a high of 42,000 in 1986
(a 40-percent decline).
GAO rightly criticized
Commerce’s argument—by noting
that there are additional kinds of
formal computing training besides
bachelor’s degrees, such as associate
degrees and certificate programs,
that prepare people for IT careers;
and also that most IT workers
receive their formal education in
fields other than computer science.
In consonance with GAO’s line of
reasoning, this study group believes
that to understand whether there is
an IT worker shortage, one must
consider both the multiple sources
of supply and the various occupa-
tions for which each of these
sources prepares an IT worker.
There are many IT jobs, such as
help desk attendant or Web de-
signer, for which an undergraduate
computer science degree is neither
common nor appropriate training.5
Another problem with the ITAA
3 According to a data brief from R. Keith Wilkinson, Science and Resource Studies, NSF,
the unemployment rate for science and engineering degree-holders was less than half
the overall national average: 2.2 percent for those working in science and engineering,
and 2.8 percent for science and engineering degree-holders in other than science and
engineering occupations, versus 5.6 percent for the U.S. labor force as a whole in 1995.
See http://www.nsf.gov/sbe/srs/databrf/sdb/98325.htm for details.
4 U.S. Department of Commerce, Office of Technology Policy, “America’s New Deficit: The
Shortage of Information Technology Workers,” Fall 1997.
5 Brian Hawkins, the president of EDUCAUSE, has noted that there are reasons why IT
jobs that do not require a computer science degree are advertised with this degree
requirement: “Often HR personnel do not fully understand such issues all that well,
when job specifications and job descriptions are written. Sometimes this is done in an
attempt to artificially elevate the position deliberately, in an effort to get the position
graded at a level that the salary could attract reasonable candidates, who may or may
not have such qualifications.” Personal communication, March 8, 1999.
18
line of reasoning is that the decline
in the production of bachelor’s
degrees in IT-related fields has
ended. There was a very significant
national upswing in the number of
students entering bachelor’s degree
programs in computer science in
1997 and 1998. The CRA Taulbee
Survey of Ph.D.-Granting Depart-
ments of Computer Science and
Engineering indicates that new
declarations of majors in computer
science at the bachelor’s level have
doubled over these two years, and
much higher graduation numbers
can be expected as these students
complete their undergraduate
degrees. Enrollments still are not as
high as they were at their peak a
decade earlier, however.
As another indicator of a
shortage, the Commerce report
cited the fact that some U.S. compa-
nies were outsourcing work to
other countries. GAO correctly
observed that the statistical data to
support this claim are not compel-
ling. The Commerce report dis-
cussed the size of the IT workforce
in other countries, such as India, and
mentioned percentages of that
country’s IT work being done for
export. However, it was difficult to
apply these statistics meaningfully as
an indicator of a worker shortage in
the United States. It would have
been useful to have statistics about
the percentage of IT work for U.S.
companies being outsourced
overseas and how that percentage
has changed over time. The
significance of even these statistics,
however, would not be unambigu-
ously clear. Outsourcing is a tried-
and-true method used by compa-
nies for financial and other reasons,
and the presence of outsourcing
does not, in itself, represent evi-
dence of a worker shortage.
Outsourcing outside of the United
States may be an indicator of
limited U.S. capacity to do this
work, but it is hard to tell without
further examination. For example,
the lower cost of having program-
ming done overseas or the desire of
a company to establish a presence in
a particular country might be
reasons for foreign outsourcing that
have nothing to do with a shortage
of American workers.
The final argument given by
Commerce as evidence of a worker
shortage is the increase in salaries of
IT workers. The report cites three
private studies of IT worker
compensation that show annual
salary increases in 1996 and 1997
averaging between 7.4 percent and
20 percent—much higher than the
overall average increase in compen-
sation for U.S. workers (4.1 per-
cent). GAO gives two counter-
arguments. The first is that this may
be evidence of a tightening labor
market rather than an actual short-
age of workers. On this point,
GAO’s argument may be focused
too much on the near term. Re-
gardless of whether there is a
‘shortage’ or merely a ‘tightness’
today, if the demand for IT
workers continues to grow rapidly in
the next decade—as the BLS itself
predicts and our study group
expects—any tightness would soon
become a shortage, unless supply can
find a way to keep up with demand.6
6 BLS has projected that between 1996 and 2006 the IT-related occupations (i.e.,
computer systems analysts, engineers, and scientists) will grow by 107.6 percent,
compared with an overall job growth of only 14 percent in the United States. BLS, Monthly
Labor Review, November 1997.
19
GAO’s second criticism was
the use of BLS data to argue that
IT occupations have, at best, merely
kept pace with average salary
increases in the professional and
specialty occupations overall from
1983 to 1997 (although IT workers
started from a considerably higher
base salary). One problem with this
argument is that BLS data are
strongly at odds with private data,
such as employer compensation
surveys. One reason may be that
the private studies take bonuses and
stock options into consideration,
whereas BLS considers only base
salary. There is anecdotal evidence
that spot shortages have driven up
salaries. Two or three years ago, for
example, new graduates with a
bachelor’s degree in computer
science were being offered starting
salaries up to double the average of
their peers if they were experienced
in building local area networks—a
new skill that was then in short
supply. Some schools are reporting
a similar increase today in salary
offers for students graduating with
experience in information security.
Most people interested in
this labor issue have focused on the
differences between the positions
taken by Commerce and GAO, but
there are, in fact, many areas of
agreement. GAO has publicly
stated, for example, that it agrees
with the Commerce report on past
and expected growth in demand
for IT workers, current low
unemployment rates for IT work-
ers, and the need for a better
understanding of supply-demand
dynamics and better categories and
data in order to develop good
policy.
How Does
Recent
Legislation on
H-1B Visas
Affect Any
Shortage?
This study group did not take
a position for or against the legisla-
tion that temporarily increased the
number of H-1B visas that may be
awarded annually.7 Nevertheless, a
number of points can be made
about the likely effects of this
legislation on the IT workforce.8
◆ Given that there is a sunset
clause in the legislation that increases
the cap, this legislation will clearly
not be a long-term factor unless it is
renewed.
◆ The number of IT workers
entering the United States under the
H-1B program is and will continue
to be a small percentage of the total
IT workforce in this country.
According to BLS, there are ap-
proximately two million IT workers
in the United States. The limit on the
number of workers of all types
entering this country on H-1B visas
was 65,000 per year. This limit will
increase to 115,000 for 1999 and
2000, before dropping back to the
7 For a discussion of the legislation that increased the annual cap on H-1B visas, plus a
labor perspective on the legislation, see Greg Gillespie, “Congress Expands H-1B Visa
Program,” IEEE, The Institute, December 1998, p. 1.
8 For another view on H-1B, Y2K, and the larger, long-term issues of IT workers, see Howard
Rubin, “The United States IT Workforce Shortage,” Dr. Dobb’s Journal, Fall 1998, on the Dr.
Dobb’s Web site at http://www.ddj.com/articles/1998/9814/9814b/9814b.htm
20
65,000 level. H-1B workers enter a
number of occupations, such as
baker and fashion model; not all of
them are IT workers. The best
estimate from unreliable data is that
from 20,000 to 25,000 of these
65,000 visas have been going to IT
workers, and it is difficult to predict
how many will go to IT workers in
the future. Since the visas are
temporary, the workers can stay in
the country on this visa for only six
years. In fact, a number leave
before their visas expire. For these
reasons, H-1B workers are likely to
represent a small portion (perhaps
less than five percent) of the
national IT workforce.
◆ Of H-1B workers who do
IT work, there is no good evidence
about where they are likely to be
employed or what effect they will
have on the domestic IT labor pool.
The specific kinds of IT work they
will do is unknown. The top ten
users of these visas in the past have
been companies providing contract
labor and services. By far the
largest user has been the Mastech
Systems Corp. in Pittsburgh, which
has received visas for 1,733 of its
employees—80 percent of its
workforce. These workers are
virtually all programmers who hold
a bachelor’s degree as their highest
level of education. However, there
is also some demand for H1-B
workers in more highly skilled,
higher paying positions. They
include research scientists in indus-
trial research laboratories or faculty
members in research universities,
where they serve the nation by
creating new technologies that
generate national wealth and by
training the next generation of IT
workers. For example, Intel Corp.
says that, of its 67,000 employees,
about 3 percent have been hired
using H-1B visas, and nearly 80
percent of these hold a master’s or
doctoral degree. There is no way to
determine whether the larger
number of temporary workers
entering the United States under the
expanded program will continue to
be employed by companies like
Mastech or by companies like Intel.
◆ The cost of the visa, which
approaches $15,000 when legal fees
are included, limits the extent to
which H-1B visas will be used to fill
lower-skill positions.
◆ The attention paid to the
H-1B visa has obscured the exist-
ence of another major source of
skilled foreign labor, including IT
workers. The TN visa (commonly
known as the ‘NAFTA visa’)
permits unlimited numbers of
Canadian IT professionals to enter
the United States for work, and it
will offer similar opportunities to
Mexicans beginning in the year
2003. There is some evidence that a
brain drain of IT workers from
Canada is hurting the Canadian IT
industry.9
◆ Making the increase in the
number of visas awarded under the
H-1B program a temporary
measure is well justified. It is very
difficult to accurately forecast
national shortages. Witness the NSF
9 On the IT worker situation in Canada, see the Software Human Resource Council’s report,
“Taking Action on Canada’s IT Skills Shortage” (http://www.shrc.ca/Taking%20Action/
front_page.htm); SHRC’s Occupation Skills Profiles Model (the Canadian Advanced
Technology Association’s call to “double the pipeline” (http://www.cata.ca/cata/advocacy/
skillshortage.htm); and the British Columbia Technology Industries Association report,
“Technology Industries in BC: A 1997 Report Card” (http://www.bctia.org/industry/report/).
21
forecast in 1990 of a “shortfall” of
scientists and engineers in general,
which did not materialize; in fact,
many people now believe there is an
oversupply. Generally speaking,
legislation has never been a very
effective tool for balancing supply
and demand in any occupation. It is
possible to harm the indigenous
supply system by bringing in too
many foreign workers. It is also
possible that foreign workers are
filling positions that might otherwise
have been filled by American
citizens, such as older electrical
engineers who have lost their jobs in
the downsizing of the defense
industry, although the study group
uncovered no hard evidence of this.
A limited-term increase in the
temporary visa program will
provide an opportunity to study
some of these issues before any
additional immigration legislation is
considered.
◆ The current legislation may
serve well to ameliorate the current,
but episodic, demand for IT
workers caused by the Y2K
problem by covering some of the
total demand for IT workers (but
not necessarily by doing Y2K work
itself). For reasons that are ex-
plained elsewhere in this report, the
demand for IT workers will
probably continue to grow steadily
and rapidly over the coming
decades. In fact, because informa-
tion technology affects so many
sectors of American industry, the
growth in demand for IT workers
is likely to continue unabated, even
in times of general economic
malaise or when IT companies
themselves have a downturn. Thus,
in the long term, the country will
have a large capacity to absorb new
workers from both domestic and
foreign sources. Y2K is a special
and important problem, but it is
temporary. It represents a sharp,
short-term peak on the long
upward curve of continuing, long-
term demand for IT workers.
There will be other short-term
peaks as well, such as the end-time
date for Unix systems early in the
next century. While eventually there
will be a sufficient growth in
demand for IT workers that the
U.S. economy could possibly
absorb all of the foreign workers
hired to fix Y2K problems, it is
unclear whether there will be some
temporary displacement of IT
workers after this short-term crisis
is over. To lessen the risk of
displacement of American workers,
it appears to be sound policy to fill
some of this short-term spike in
demand for the Y2K problem with
temporary foreign workers.
To complete this discussion of
the H-1B issue, it is useful to
compare this visa program with
legislation in 1989 dealing with labor
shortages of nurses reported by
some hospitals and other employer
groups. The history of this legisla-
tion and its effects on the shortage
of nurses is an illustrative case study
for understanding the IT worker
shortage. In fact, this H-1A visa
legislation for nurses provided the
structure for the legislation in 1990
that created the H-1B visa program.
The case study is recounted in box
1-1.
22
In response to labor shortages of nurses reported by hospitals and
some other employer groups, the Congress passed the Immigration
Nursing Relief Act of 1989 (INRA, Public Law 101-238). This law
added a new provision allowing admission of nonimmigrant registered
nurses (RNs) during a five-year pilot period to expire in September 1995.
The history of this program was carefully reviewed in 1995 by the
Immigration Nursing Relief Advisory Committee established under the
above law, and its report provides an instructive model for discussion of
the issues surrounding the debate about foreign IT workers. The rationales
for the H-1A nursing visas were:
a) reports of a nationwide shortage of nurses;
b) increasing dependence on foreign temporary nurses admitted
under other visas;
c) pending expiration of work authorizations for many existing
temporary foreign nurses admitted under other programs;
d) concern that foreign nurses were detrimentally affecting the
pay and working conditions of the domestic nursing
workforce; and
e) declining numbers and quality of applicants to basic nursing
education programs.
The new act, first, allowed foreign nurses previously admitted on
temporary visas to convert their status to legal permanent resident, and
waived numerical limits in existing law in order to allow this to happen.
Second, it created a new temporary nursing visa (the H-1A visa) that
included provisions intended to: 1) encourage employers to reduce their
dependency on foreign nurses, 2) provide protection for the wages and
working conditions of nurses who are citizens and legal permanent
residents of the United States, and 3) foster the development of a stable
pool of domestic RNs so that future shortages could be minimized.
According to the Advisory Committee, the debate on this particular
legislation embodied many of the issues that repeatedly arise in discussions
regarding the admission of foreign workers to meet skill shortfalls and
labor shortages in the United States. The Advisory Committee summa-
rized these issues with a long quotation from a 1991 staff report:10
The debate about relying on immigration more significantly to meet
“labor shortages,” and thereby contribute to America’s competitiveness in
the global marketplace, inevitably included the need to provide realistic
protection for U.S. workers. For immigration policy, this issue involved
two interrelated points. First, how to evaluate independently an employer’s
claim that a foreign worker is needed. And second, how to strike an
10 Gary B. Read and Demetrios G. Papademetriou, “U.S. Legal Immigration Reform: Recent
Developments,” Immigration Nursing Relief Advisory Committee report, 1995, pp. 12-13.
Box 1-1. H-1A Visas and the Nursing Shortage
23
intellectually and politically satisfactory balance between being responsive
to employer needs while also being sensitive to concerns that greater
access to foreign workers by U.S. employers might affect adversely the
wages and job opportunities of U.S. workers. Such adverse effects could
occur through direct displacement of U.S. workers or through significant
interference with the market’s natural propensity to adjust to a tighter
labor supply, thereby leading to an increasing dependence on foreign
workers. This debate clearly raised the issue that over-reliance on immi-
gration to meet labor shortages, as opposed to educating and training the
domestic workforce, could turn temporary labor market shortages into
structural deficiencies.
The conclusions of the Advisory Committee were mixed. They
noted that because only a tiny percentage of the U.S. nursing workforce
ever came to be accounted for by H-1A nurses (about 13,800 in 1994,
less than 1% of employed RNs), at the national level essentially all the
effects of this program were negligible. However, because the H-1A
nurses were heavily concentrated in only a few metropolitan areas (over
one-third in the New York City area alone, and two-thirds in New York,
Chicago, Houston, Los Angeles, and Dallas together), H-1As in these
cities mitigated a tight nursing labor market with “no adverse impacts on
patient care,” but also “may have lessened the pressure to find long-term
solutions to nurse staffing problems.” 11
The Committee found the “attestation” procedures required of
employers to be ineffectual, and reported that the “use of employer-
specific vacancy rates as a justification for the need for H-1A nurses was
problematic, as these rates could be calculated in several ways, making
them difficult to verify.” It noted further that the prevailing wage deter-
minations were often of doubtful validity and reliability, and that the act’s
requirement that “employers take timely and significant steps to recruit
and retain U.S. nurses was ineffective because it did not require any new
steps” beyond those that most employers had long practiced. 12
Lastly, the Advisory Committee reported that the rate of increases
in RN employment had slowed since passage of the 1989 Act; that press
reports had begun to appear about nurse layoffs; and that “the future
labor market for registered nurses is uncertain.”13 The H-1A nursing visa
program was allowed to expire in September 1995. In its final year,
FY1994, approximately 6,300 nonimmigrant nurses had been admitted
under this visa program.
Source: Computing Research Association, Intersociety Study Group on Information
Technology workers, based on the “U.S. Legal Immigration Reform: Recent Develop-
ments,” Immigration Nursing Relief Advisory Committee report, 1995.
11 Ibid., p. 5.
12 Ibid., p. 6.
13 Ibid., pp. 7, 31.
24
25
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 ‘informa-
tion 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 techno-
logical considerations, ranging from
the design and production of chips
(for example, Intel is widely re-
garded as an IT company); through
the design and creation of complex,
computer-based systems for a
particular application (the modern-
ization 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 com-
puter-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
Chapter 2. Infor mation Technolog y Wo r ker s
26
PRODUCTSU.S. MAIL
PARCEL SVCS
COURIER SVCS
TELEPHONE
TELEGRAPH
MAILGRAM
IRC’S
BR
CA
BR
OTHER
DELIVERY SVCS
MULTIPOINT DIST. DVCS
SATELLITE SVCS
FM SUBCARRIERS
PRINTING CO’S
LIBRARIES
PAGING SVCS
INDUSTRY NETWORKS
RETAILERS
NEWSSTANDS
DEFENSE TELECOM SYSTEMS
SECURITY SVCS
CO
RADIOS
TV SETS
TELEPHONES
TERMINALS
PRINTERS
FACSIMILE
ATM’S
POS EQUIP
ANTENNAS
FIBEROPTICS
CALCULATORS
WORD PROCESSORS
PHONO’S, VTR’S, VIDEO DISC
BUSINESS FORMS
MICROFILM MICROFICHE
PRINTING AND
GRAPHICS EQUIP
COPIERS
CASH REGISTERS
INSTRUMENTS
TYPEWRITERS
DICTATION EQUIP
FILE CABINETS
PAPER
PABX’S
TELEPHONE SWITCH
MODEMS
CONCENTRATOR
MULTIPLEXERS
TEXT EDITING E
COMMUNICATIO
MASS STORAGE
SCC’S
VAN’S
CABLE OPERATORS
SERVICESCONDUIT
ATM - Automated Teller Machines
IRC - International Record Carrier
PABX - Private Automatic Branch Exchange
POS - Point-of-Sale
THE “INFORM
Figure 2-1
Source: John McLaughlin and Anne Birinyi, "Information Business," Harvard College, 1980.
27
PROFESSIONAL SERVICES
FINANCIAL SVCS
ROADCAST NETWORKS
BLE NETWORKS
ROADCAST STATIONS
NEWS SERVICE
DATA BASES
TELETEXT
TIMESHARING
SERVICE BUREAUS
ADVERTISING SVCS
ON-LINE DIRECTORIES
SOFTWARE SVCS
MPUTERS
LOOSE-LEAF SVCS
HING EQUIPMENT
RS
EQUIP
ONS WP’S
E
SOFTWARE PACKAGES
NEWSPAPERS
SHOPPERS
CONTENT
SCC - Specializied Common Carrier
VAN - Value Added Network
VTR - Video Tape Recorder
WP - Word Processor
MATION BUSINESS”
28
of the system rather than its under-
lying 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 technol-
ogy. The definition of information
technology, however, is not re-
stricted 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 informa-
tion technology and its use and
applications (see table 2-1). Box 2-1
and the accompanying text in
chapter 5 lists and reviews defini-
tions 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 technol-
ogy 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 technol-
ogy, 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-
1. Computer Science
2. Information Science
3. Information Systems
4. Management Information
Systems
5. Software Architecture
6. Software Engineering
7. Network Engineering
8. Knowledge Engineering
9. Database Engineering
10. System Security and Privacy
Source: Peter Denning, “Information Technology: Developing the Profession,”
Discussion Document, December 4, 1998.
11. Performance Analysis (Capacity
Planning)
12. Scientific Computing
13. Computational Science
14. Artificial Intelligence
15. Graphics
16. HCI (Human Computer Interface)
17. Web Service Design
18. Multimedia Design
19. System Administration
20. Digital Library Science
Table 2-1
IT-related Academic Disciplines Offered in the United States
29
based systems has added to the
confusion. Although most telecom-
munications technology has been
computer-based for some years, the
rapid miscegenation of the func-
tionality 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
Computer engineering - Graduates
work primarily in computer hardware.
Computer science and engineering -
Graduates work primarily in hard-
ware, firmware, and software,
depending on program and choices
made by the student.
Computer science - Graduates work
primarily in software design and
implementation.
Software engineering - Graduates
work with the engineering of
software, with special attention
devoted to large and critical systems.
Computer information science -
Graduates work on the development
of information systems, probably
Source: Adapted from “U.S. Degree Programs in Computing” in Computing Profession-
als - Changing Needs for the 1990s, National Academy Press, 1993.
with more emphasis on information as
an enterprise resource than is given in
programs in computer science or
software engineering.
Information systems - Graduates
design, develop, implement, and
maintain business information
systems.
Management information systems -
Graduates design, develop, implement,
maintain, and manage information
systems with a greater emphasis on
the management of the systems than
on the other aspects.
Information science - Graduates
usually work in libraries or develop
other facilities to provide information
to users.
Undergraduate Degree Programs in Information Technology
Box 2-1
30
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, soft-
ware, 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 informa-
tion 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 program-
mers. 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 man-
agement 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,
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.
31
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 classifica-
tion 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 categori-
zations 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 some-
times 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 occupa-
tions 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 catego-
ries of IT workers, depending on
the principal functionality in their
occupation. The table includes
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.
32
examples of particular IT occupa-
tions 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 Occupa-
tional 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,
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.
Figure 2-2
Source: Computing Research Association, Intersociety Study Group on Information
Technology Workers, April 1999.
Distinquishing IT Workers from IT-Enabled Workers
Business / Industry KnowledgeInformation Technology Knowledge
IT-Enabled Workers
IT Workers
Bank
Teller
Call
Consultant
OS
Developer
CFO
CIO
CTO
System
Admin
Application
Developer
SW
Project
Mgr
Bus
Project
Mgr
Marketing
VP
Product
Developer
33
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 correspon-
dence between educational degree
and category of work. However,
the exhibit clearly shows a correla-
tion.22 Occupations that fall under
the conceptualizer category are
commonly populated with recipi-
ents 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
Table 2-2
Conceptualizers - those who
conceive of and sketch out the
basic nature of a computer system
artifact:
Entrepreneur
Product designer
Research engineer
Systems analyst
Computer science researcher
Requirements analyst
System architect
Developers - those who work on
specifying, designing, constructing, and
testing an information technology
artifact:
System designer
Programmer
Software engineer
Tester
Computer engineer
Microprocessor designer
Chip designer
Source: Computing Research Association, Intersociety Study Group on Information
Technology Workers, April 1999.
Modifiers/Extenders - those who
modify or add on to an information
technology artifact:
Maintenance programmer
Programmer
Software engineer
Computer engineer
Database administrator
Supporters/Tenders - those who
deliver, install, operate, maintain, or
repair an information technology artifact:
System consultant
Customer support specialist
Help desk specialist
Hardware maintenance Specialist
Network installer
Network administrator
Categorization of IT Jobs
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.
34
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 communi-
cations, 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 profession-
als,’ ‘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
Source: Computing Research Association, Intersociety Study Group on Information
Technology Workers, April 1999.
Occasionally= ✓
Frequent= 4
Common= ✔
Unlikely= (blank)
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Table 2-3
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.
35
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 pro-
duce 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. Infor-
mation technology is rapidly being
infused into the financial, retail,
manufacturing, service, entertain-
ment, 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 Massachu-
setts.24 Thus a shortage of IT
workers affects not only the IT
industry (hardware, software,
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.
Source: Adapted from 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, Exhibits 7 and 8. Based
on the Bureau of Labor Statistics data.
T
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Table 2-4
36
25 See, for example, One Digital Day, Intel, 1998, for a snapshot of the many applications
of computing.
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 organiza-
tions that Y2K is a problem for
almost every corporation and every
government organization, and every
member of society is affected.
Source: Adapted from Burt S. Barnow, John Trutko, and Robert Lerman, “Skill Mis-
matches and Worker Shortages: The Problem and Appropriate Responses,” Draft Final
Report, The Urban Institute, February 25, 1998, Exhibits 7 and 8. Based on the
Bureau of Labor Statistics data.
Comparison of IT Employment 1988 and 1997
Figure 2-3
Computer Systems
Analysts and Scientists
479,000
38%
Computer Systems
Analysts and Scientists
1,236,000
60%
Computer
Programmers
570,000
45%
Computer
Programmers
626,000
30%
Operations Researchers
Systems Analysts
210,000
17%
Operations Researchers
Systems Analysts
201,000
10%
1988 Total IT Employment=1,259,000
1997 Total IT Employment=2,063,000
37
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 opera-
tions 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 estima-
tion area, a worker would need the
◆ Inventory management by large
retailers
◆ Shipping scheduling and quality
assurance by express courier
services
◆ Financial controls in virtually every
large business
◆ Frequent flyer programs by the
airlines
◆ Credit card validation by merchants
◆ Production of movies and videos
◆ Distance education
◆ Control of manufacturing lines in the
chemical and automobile industries
◆ Processing data for oil exploration
companies
◆ Global positioning systems used in
the trucking industry and in
scientific agriculture
◆ Literature searching in biomedical
research
◆ Computer-aided design by engineers
◆ Automated switching in the
communications industry
Source: Computing Research Association, Intersociety Study Group on Information
Technology Workers, April 1999.
Table 2-5
Use of Computer Systems in the Operation of American Industry
38
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 knowl-
edge of the customer’s concerns
and how to meet them; for ex-
ample, 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 commu-
nications 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, manage-
ment, and customers. Non-technical
skills relating to technical specifica-
tions 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 specifica-
tions, 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 communi-
cations skills (although students
sometimes acquired some of these
latter skills through internships). The
accreditation bodies CSAB and
ABET currently make communica-
tion 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 applica-
tion of these skills in some com-
puting 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 ad-
dressed in computer science or
39
computer engineering programs,
but they are addressed in informa-
tion systems programs.26 Graduates
in other majors generally gain less
technical training, but often they get
a better introduction to communi-
cations 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 Informa-
tion Technol-
ogy 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
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,” http://
www.man.deakin.edu.au/jw_lamp/acse-96.pdf ; 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).
4
-1
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3
Scale: 1- least important; 2- moderately important; 3- important; 4- critically important.
Source: Computing Research Association, Intersociety Study Group on Information
Technology Workers, April 1999.
Table 2-6
40
decrease. This means that informa-
tion 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 technol-
ogy 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 effec-
tively. 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 technol-
ogy-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 turn-
over in technology makes it impera-
tive that IT workers adapt to new
technologies and new products.
This means that they must continu-
ously work at keeping their skills
and knowledge up to date or risk
becoming obsolete and unemploy-
able.
The fluidity of the IT
workforce gives labor a power
over management. While some IT
workers have gained knowledge
41
about particular application areas
that represents a valuable asset in
their work, there is nothing inher-
ently 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.
Source: Hewlett Packard
The Importance of New Products to Company Revenue
The Case of Hewlett Packard
1994
1995
1996
1997
$
’97
’96
’95
’94
’93 & Prior
Nearly two-thirds of HP’s
orders are derived from
products introduced in
the last two years.
Figure 2-4
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 employ-
42
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.
ment for computer systems ana-
lysts, 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
Source: “Not all Programmers Are Created Equal,” G. Edward Bryan, IEEE, 1994.
Variability in Programmer Productivity
0
20
40
60
80
100
120
140
160
180
200
1
5
10
15
20
25
30
35
40
45
50
Top 50 Programmers by Rank Order
# Bugs Fixed/YearFigure 2-5
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.
43
Figure 2-6
Source: Stanford Computer Industry Project, 1999.
Who’s Getting the Top Talent?
Tier 1 - Hot Software Companies
◆ Software start-ups and boutique service firms
◆ Software publishers
◆ Wall Street
◆ R&D (corporate and university)
Tier 2 - Software-aware Companies
◆ VARs, consulting firms, systems, integrators
◆ Software intensive industries (computer hardware,
communications, financial services)
◆ Aerospace systems firms
Tier 3 - Everyone Else
◆ Other industries with incidental software
◆ Most IS applications development and maintenance
◆ DoD, federal, state, and local governments
44
45
What Are the
Dynamics of
the Market-
place and the
Dangers of
Government
Intervention in
the IT Labor
Market?
In most industries, there are
boom and bust cycles that affect the
respective labor market. Even the
IT sector, which overall has had a
rapid upward growth for the past
half-century, has experienced
economic downturns. It is com-
mon in any active profession to
have occasional mismatches be-
tween labor supply and demand
because business cycles tend to
move up and down more rapidly
than changes in supply. Occasionally,
supply changes more rapidly than
demand, as shown by the growth
of 40 percent per year in newly
declared computer science majors at
research universities the past two
years. The invisible hand of the
marketplace will often correct for
shortages through wage pricing and
other adaptations. Especially when
there are many employers vying for
the labor pool, wages will typically
rise enough to attract workers from
other fields. Government interven-
tion in a market is generally re-
garded as advisable either when the
free market is unable to operate on
its own, or where the costs are
regarded as too high. Examples of
these costs are the long time it takes
for the market to self-correct, the
pain caused to individuals or
institutions, or risk placed on the
national economy or national
security. In fact, it is very difficult
for government organizations to
effectively control labor supply—
not to mention that there is little
political will for doing so in this era
of free markets. It is hard to
predict future demand and to
collect timely data about the effect
intervention is having; as a result, it
is easy to over-stimulate a labor
pool.
Even when wages rise, the
market cannot adjust more quickly
than the amount of time it takes to
train an adequate supply of work-
ers. In the IT sector, such delays are
often quite short. Anecdotal evi-
Chapter 3. Demand, Constraints, and Consequences
46
dence suggests that it takes about six
months to retrain a worker for a
low- or mid-level IT occupation,
assuming the worker already
possesses some basic skills on which
to build. Some high-level positions,
such as management positions or
senior research positions in labora-
tories, may require a longer training
period. Sometimes, instead of a
shortage occurring immediately, the
level of talent filling open positions
is gradually lowered. This may be
especially true for particular seg-
ments of the labor market—for
example, a geographic region,
employers who have a rapid
increase in demand, or companies
that are regarded by workers as
somehow less attractive as employ-
ers (e.g., because of the nature of
the work, the wages paid, or the
corporate culture).
The recent history of interven-
tion by U.S. government agencies to
meet perceived shortages of
scientific and technical workers does
not provide an encouraging picture.
Perhaps the most notorious recent
case of failed policy pronounce-
ments is the warning during the late
1980s from then-senior manage-
ment of the National Science
Foundation (NSF) about looming
‘shortfalls’ of scientists and engi-
neers. These warnings were based
on methodologically weak projec-
tion models of supply and demand
that were originally misinterpreted
as credible forecasts, rather than
simulations dependent upon certain
key assumptions. The projections
yielded numerical estimates of the
shortfalls anticipated, eventually
reported to be 675,000 scientists
and engineers by the year 2006.
Based in part on these worry-
ing pronouncements, Congress
agreed to increase funding for NSF
science and engineering education
programs. Several years later, in
1990, again influenced by the
shortfall claims, Congress agreed to
greatly expand the number of visas
available for foreign scientists and
engineers, for both permanent and
non-permanent residents. (This bill
was the origin of the H-1B visas,
among other measures.) Many
educational institutions moved to
increase the numbers of graduate
students in these fields. By the time
these larger cohorts of graduate
students emerged with their newly
earned doctorates, the labor market
in many fields had deteriorated
badly, and many found their career
ambitions extremely frustrated.
This experience proved embarrass-
ing, leading to congressional
hearings in 1992 and harsh criticism
of NSF management from several
prominent congressional supporters
of science and engineering. A
repetition of this experience should
be avoided in handling the IT labor
market.
What Factors
Limit the Abil-
ity of the Gov-
ernment, Indus-
try, University
System, and
Professional
Community To
Improve the
Match Between
Supply and
Demand?
It may be difficult for compa-
nies to recognize that there is a
worker shortage, especially if they
employ only a few workers in a
47
given IT occupation, or if they are
used to taking a long time to fill
vacancies (which is common for
positions that require a high level of
education or training or many years
of experience, even in times of
market equilibrium). But even if the
government, industrial, and aca-
demic sectors do recognize that
there is an IT worker shortage and
decide they want to deal with it,
there are factors that limit their
ability to do so. The high level of
competition and the short product
life and product development time
often make it difficult for compa-
nies to hire new employees who
require a lengthy period of break-in
training before they can become
productive. It also makes it difficult
to retrain an existing employee for a
significantly different job. Thus
companies are sometimes forced,
by competitive pressures, to lay off
workers of one type and hire
workers of another type. Or they
may refuse to hire anyone who does
not already possess all the needed
skills. These employer practices
receive harsh criticism at times from
labor unions and some government
officials, but to some degree this is a
rational and perhaps necessary
reaction to the realities of the
marketplace.
Universities are sometimes
criticized for their slow response to
market conditions and their reluc-
tance to allocate or reallocate
resources to programs with high
and growing demand. Perhaps
most importantly, it should be
noted that the colleges and universi-
ties do not control student demand.
In this free market, student demand
can change quickly—certainly more
quickly than most universities can
react. It should also be remem-
bered that most universities have
limited resources, most of which
are tied up in long-term commit-
ments such as buildings and tenured
faculty. It is difficult for universities
to shift tenured faculty from one
subject area to another—especially
from one department to another,
but often even within a given
department. Even when such shifts
do occur (such as library science
faculty becoming management
information science faculty) these
faculty retreads are often not
accepted as full citizens, they may
never conduct the kind of research
that fits into the new department,
and they may not provide good
leadership in the new area. How-
ever, they do take up faculty slots
that might have been assigned to a
young researcher trained in the area.
Part-time and adjunct appointments
are one tool that departments can
and do use to respond to rapidly
changing market conditions. But a
commitment to build up a com-
puter science or information
systems faculty (other than with
non-tenure-track faculty) means
making a long-term commitment,
which is almost certainly made at
the expense of some other worthy
initiative.
The slow response is also
partly due to the decision and
review process. This process often
seeks out views on major initiatives
from many parts of the univer-
sity—faculty, administration, and
sometimes even students and staff.
This deliberative process, which
largely precludes a response time
that can keep up with industry
trends, is part of what universities
believe gives them strength. Indus-
try, however, often sees this operat-
ing style as a weakness.
There are various factors that
limit the government’s ability to act.
Supply and demand are not regu-
48
lated by the government; the
government can only offer incen-
tives to encourage a student to study
a particular field or a company to
broaden its hiring practices. It is
hard for a government to stimulate
labor supply in any discipline by just
the right amount: the market is
constantly changing, the information
about supply and demand is imper-
fect and is difficult to obtain in a
timely fashion, and it is hard to
predict the effects that a government
initiative might have. Another factor
involves state and local versus federal
rights. Educational issues, especially
at the K-12 level, are considered
primarily a local prerogative; but
national labor issues require national
action, or at least national coordina-
tion, of K-12 and higher education.
Government organizations also have
a limited ability and desire to inter-
fere with the actions of a private
organization, such as a company or a
university.
For all of these reasons, even
when there is a desire to act, there
are often impediments to doing so.
What Are the
Costs of an IT
Worker
Shortage?
A substantial shortage of IT
workers can incur many different
costs. The effects are felt on many
levels—the nation, various indus-
tries, individual firms, and consum-
ers:
◆ A shortage of skilled IT
workers in the IT industry and other
high-tech industries would slow
innovation and product develop-
ment, which in turn would harm
exports and wealth creation in the
United States.
◆ Industries dependent on IT
workers would grow more slowly
if there were an IT worker short-
age, and this would have a negative
impact on employment overall.
◆ American companies might
become less competitive globally
because the up-push of salaries in a
tight labor market would have to be
reflected in the prices of goods and
services produced, or because these
companies could not get their
products on the market as rapidly as
foreign companies that are fully
staffed.
◆ If American talent were too
expensive or in short supply,
companies would be more likely to
move jobs offshore.
◆ Companies with intensive or
company-critical IT functions that
were unable to find an adequate
supply of qualified IT workers
might have to merge with compa-
nies that have these talents. While a
merger is not a bad thing in and of
itself, industry concentration for the
purpose of acquiring expertise
might harm economic forces and
industry efficiency.
◆ Information technology is
leading to enhanced productivity in
a number of industries. A lack of
IT workers would lead to a slow-
down in productivity improve-
ment.28 When salaries are driven up,
certain kinds of organizations might
28 In the early 1990s some economists questioned the productivity added by information
technology, but this attitude seems to be changing, coming into line with long-standing
anecdotal evidence that this technology can provide significant productivity gains.
49
be less able to meet industry market
salaries and would be affected
disproportionately by the shortage
of workers. This has been true, for
example, of government organiza-
tions trying to fix their Y2K prob-
lems. This factor has also affected
the ability of universities and other
nonprofits to attract qualified IT
talent.
◆ IT graduate students and
faculty might be attracted away
from universities in sufficient
numbers to jobs in industry that
there would not be an adequate
number of teacher-scholars left to
train the next generation of IT
workers (the so-called “seed-corn”
problem).
◆ A shortage of skilled people
would mean that in some cases
employers would fill positions with
people who are less than adequately
qualified. This practice could lead
to poorer performance, high rates
of project failure, a slowdown in
delivery, and decreased innovation.
◆ Software projects, especially
large ones, already have a high
failure rate (perhaps an artifact of a
long history of inadequate numbers
of well-trained IT workers). This
would likely worsen with a shortage
of skilled IT personnel.
◆ Tight labor markets are
often characterized by “churning,”
the increased movement of the
employees from one employer to
another. Churning significantly
increases recruitment and retraining
costs for employers; it also means
that the time of technical staff, as
well as management and human
resources staff, is spent on recruit-
ing, retaining, and retraining em-
ployees, rather than on more
productive elements of the busi-
ness.29 New employees are not as
productive as employees who have
been with a company for some
time because new employees need
to learn about company projects,
processes, skills, and capabilities.
◆ Workers who are respon-
sible for conceptualization and
development lose productivity
when there is a shortage of ad-
equate support staff and adequately
maintained support systems.
◆ When there is a shortage of
staff, employees who might have
been assigned to create new prod-
ucts sometimes are reassigned to
maintain existing products or
company support systems. This
could limit innovation and stifle
competitiveness.
◆ There could be a reduction
in the range of products available to
both individual Americans and to
American companies who use them
to improve their own products,
services, and well-being.
What Are the
International
Considerations
in Dealing with
a National
Worker
Shortage?
The IT marketplace and the
companies in it are increasingly
international in scope. Virtually all
of the major companies in the IT
29 For a reflective article on the issue of job churning, see Robert W. Lucky, “Job Churn,”
IEEE Spectrum, November 1998, p. 17.
50
industry headquartered in the United
States offer their products and
services around the world. Most
have sales offices in many countries,
and some have factories and even
research laboratories outside the
United States. Beginning in the
1970s, American companies began
to increase their use of overseas
workers to manufacture compo-
nents and assemble products, as
labor costs escalated in the United
States. Similarly, IT companies
headquartered in other countries
have opened foreign offices as they
try to expand their markets. A few
foreign IT companies have estab-
lished a substantial presence in this
country, and a number of both
European and Japanese companies
have established IT-related research
laboratories here (e.g., Hitachi,
Mitsubishi, NEC, Panasonic, Philips,
Ricoh, Sharp, Siemens, and Sony).
This means that there is
increasing worldwide competition
for IT contracts; if U.S. companies
cannot provide the service and
products, increasingly there are
other options. This surely could
lessen the demand for IT workers
in the United States; but it could
also prove to be an opportunity for
U.S. companies to build up their
world business. It was long
thought that American industry
would maintain control of both the
national and worldwide IT indus-
tries because of its large civilian and
military domestic markets, strong
higher educational system, good
research laboratories, and domina-
tion of software development. But
there have been pressures against
the American companies. For
example, in the 1980s, a globaliza-
tion of the software industry began,
driven by a search for talent. So
far, the United States still dominates
the software industry, perhaps
because the capacity of foreign
labor sources is strictly limited by
the numbers of highly educated
individuals and by the educational
infrastructures in other countries.
However, it is hard to know how
long this domination will last.
The flow of IT work and
workers is not limited by national
boundaries. It is not uncommon
for IT workers from one country
to work for a few years or even
their entire careers in another
country, although no statistics are
available on the numbers. Anec-
dotal evidence indicates that the
United States is by far the destina-
tion of choice for IT study and
work. Roughly half the graduate
students and one-tenth of the
undergraduates in IT-related
departments are foreign nationals;
and foreign-born students who earn
science and engineering (S&E)
doctoral degrees from U. S. aca-
demic institutions are staying in this
country after graduation in increas-
ing numbers. A recent NSF study
indicates that 63 percent of foreign-
born students who earned S&E
doctorates from U.S. institutions
between 1988 and 1996 said they
planned to locate here, compared to
50 percent or less of those previ-
ously studied. Two-thirds of those
who planned to stay had firm plans
for further study or employment.30
One might think that the
influx of workers and students
would help meet the strong de-
mand by American companies for
IT workers. Indeed, it does help.
However, it is fairly clear that
30 See “Statistical Profiles of Foreign Doctoral Recipients in Science and Engineering:
Plans to Stay in the United States” (http://www.nsf.gov/sbe/srs/nsf99304/start.htm)