U.S. Tech Firms Add Jobs Despite Automation
U.S. technology companies are investing more in machines than in people, but tech hiring is nonetheless rising, according to a new report by Forrester and a just-released National Science Foundation study.
Mon, January 23, 2012
Computerworld — U.S. technology companies are investing more in machines than in people, but tech hiring is nonetheless rising, according to a new report by Forrester and a just-released National Science Foundation study.
There are several trends behind what is a pronounced shift in tech employment. Tech manufacturing is shrinking, thanks in part to automation and overseas production. Telecommunications is shedding jobs as the industry moves to wireless. But software and IT services are on the rise as more of the economy moves online .
High-tech manufacturing employment has declined by 28% since 2000, or about 687,000 jobs, according to the National Science Foundation (NSF) in its Science and Engineering Indicators 2012. The NSF's high-tech definition is broad and includes communications equipment, semiconductors, pharmaceuticals, aerospace and computer industries.
The value of the output generated by manufacturing employees in the last decade, however, doubled, according to the NSF, meaning it takes far fewer people today than it did just 10 years ago to produce a product.
As manufacturing jobs decline, the value of the work performed has doubled in the last decade, thanks, in part, to improved automation.
Manufacturing in the U.S. is increasingly becoming the assembly of components that are brought in from overseas; it is also increasingly automated, said Andrew Bartels, who prepared Forrester's study.
The NSF report looks at a broad range of the tech industry. Forrester is looking at a much smaller segment: the high-tech industry, which includes IT and telecommunications.
The U.S. tech industry, by Forrester's count, employed 3.2 million people by the end of last year. That represented a net gain of 42,000 workers compared to 2010 despite job losses in the telecommunications sector.
Nonetheless, the U.S. tech sector added 131,000 jobs last year in services and software development, according to Forrester. Although the tech sector provides only 2% of U.S. jobs, these IT jobs represent 6% of the total new private sector jobs created since the first quarter of 2010.
Holding back job growth are businesses that are investing in machines instead of people, said Bartels.
There was a 7% increase in business IT investment last year, but only a 1% increase in jobs compared with 2010, said Forrester. "Rather than add capacity, in the form of more workers, they are choosing to put their cash flow into technology to reduce cost," said Bartels.
The telecommunications sector is losing jobs because of the shift from wired to wireless, which needs fewer workers. There is also increasing automation in that industry, said Bartels.
