occupational and industry employment outlook 2007

8/8/2019 Occupational and Industry Employment Outlook 2007

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Occupational and Industry Employment Outlook for IS and IS-Related Business

School Graduates 2002-2012

Prof. Ken LaudonIOMS Department

NYU Stern School of Business2007


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Population Overview: 2002-2012

U.S. population increases by 24 million

Slow down in rate of growth fromprevious decades Youth (16-24) grow by 7%

Middle age (55-64) grow 43% Young adult (35-44) decrease in size!Elderly (65-100) grow by 65%


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Labor Force Overview: 2002-2012

Civilian labor force expands 12% by17.4 million new workersTotal employment expands 14.8% to165 million from 144 million

Adding 21.6 million new jobs

20.8 million new jobs in serviceproviding industries, only 1.6 million ingoods producing industries


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Industry Sector Employment Outlook: Services

% Growth in Jobs by Sector

11.8%

12.3%

14.0%

15.7%

17.8%

18.5%

30.4%

31.8%

0.0% 10.0 20.0 30.0 40.0

Government

Trade, transportation, utilities

Leisure and hospitality

Professional and businessservices

Education and health services

Professional and business services

Information


Other


Financial services

Government


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Industry Sector Employment Outlook: Services

Growth in Millions of Jobs

0 1 2 3 4 5 6

Government



Profess ional and businessservices

Education and health services

Professional and business services

Information


Other


Financial services

Government


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Choosing the Right Sector: Bottom LineLike choosing the right asset classThe best job opportunities in both growth

and numbers are found in:Education and health servicesProfessional and business services (consulting)TradeGovernment Information sector

IS/IT is important in all these areas


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OccupationalOutlook2002-20012


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US Domestic IT Job Growth 2005-2012

-200,000400,000600,000800,000

1,000,0001,200,0001,400,0001,600,0001,800,000

2005 2006 2007 2008 2009 2010 2011 2012

Technical IT

Managerial IT

Technical total new jobs + replacement hires 2005-2012= 600,000 jobsManagerial total new jobs+ replacement hire 2005-2012= 150,000Growth rates ~ 5% 6% annually. Forecast period growth= +30%

Data Source: Occupational Outlook Handbook, Computer Systems Analysts, Database Administrators, and Computer Scientists , and Computer and Information Systems Managers, 2005. Table source: Ken Laudon


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IT G t India: T p 3 Firms

-

W profoSys

t

Indian Outsourcing Worst Case 2005-20012

Worst case: top Indian firms continue to grow at 12-18% annuallyTotal new outsourced jobs all from US market= 300,000+ in 2012


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Most Likely Indian Outsourcing Scenario: 2005-2012

More likely scenario: 10% annual growth rate in Indian outsourcing firmsdue to wage labor inflation (14% in 2005) and competition from China,

Middle East, and East European countries grows. Total Indian outsourced jobs= 216,000 in 2012

IT Job Growth I nd To p 3: 10% Growth

-10,00020,00030,00040,00050,000

60,00070,00080,00090,000

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

2 0 1 2

W


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US IS/IT Employment and Indian Outsourcing

-200,000400,000600,000800,000

1,000,000

1,200,0001,400,0001,600,0001,800,000

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

US Technical IS Jobs

US Managerial IS Jobs

Indian Outsourced Jobs

Indian outsourcing will play an important but small role in meeting the overalldemand in the US for IS/IT personnel in technical jobs, and an even smaller role in

IS managerial jobs


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US IS/IT Jobs Forecast Wrap UpUS IT/IS jobs will grow at 5-6% over the period,about 1.5x the GDP growth

Growth driven by falling capital costs in IT/IS sector,more powerful hardware and software, and relativelystable IS/IT wage ratesTechnical jobs which can become routinized andcommoditized suffer the greatest risk of outsourcing

to low wage countriesManagerial jobs, and those technical jobs whichrequire hands-on, judgmental, creative, and designskills are much less likely to be outsourced


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US IS/IT Jobs Forecast Wrap UpThe number of jobs outsourced to India will most likely expandat about 10% annuallyMostly technical, routinized, and commoditized positions

Indian outsourcing will fall from 18% growth down to 10% dueto rising wage rates (14%) and competition from even lowerwage countriesIndian outsourcers will be forced to move up the value chain of informational/knowledge value in order to grow.They face a number of constraints in this area such as location,culture, and sensitivity to US markets. Not all English is

American.While India has a population of 1+ billion people, its supply of educated, trained software engineers is more limited thanexpected because of lack of development throughout thecountry.


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US IS/IT Jobs Forecast Wrap UpEastern Europe will expand to challenge Ireland assource of outsourcing, but faces wages issues and

security issuesChina will emerge as a major outsourcing provider forIndian firms outsourcing to cheaper wage markets.


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Today s Message From Robert

Half AgencyKen,

It was great speaking to you. Best of luck with the presentation.One key focus that I would focus on is the necessity of beingable to communicate how their efforts and projects effect thebottom line of the company they are working for.

Sincerely, Colin O'Neill Account ExecutiveRobert Half Technology

occupational and industry employment outlook 2007

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