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Prof. Ken Laudon IOMS Department NYU Stern School of Business

Occupational and Industry Employment Outlook for IS and IS-Related Business School Graduates 2005-2012. Prof. Ken Laudon IOMS Department NYU Stern School of Business. Population Overview: 2002-2012. U.S. population increases by 24 million Slow down in rate of growth from previous decades

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Prof. Ken Laudon IOMS Department NYU Stern School of Business

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  1. Occupational and Industry Employment Outlook for IS and IS-Related Business School Graduates 2005-2012 Prof. Ken Laudon IOMS Department NYU Stern School of Business

  2. Population Overview: 2002-2012 • U.S. population increases by 24 million • Slow down in rate of growth from previous 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%

  3. Labor Force Overview: 2002-2012 • Civilian labor force expands 12% by 17.4 million new workers • Total employment expands 14.8% to 165 million from 144 million • Adding 21.6 million new jobs • 20.8 million new jobs in service providing industries, only 1.6 million in goods producing industries

  4. Industry Sector Employment Outlook: Services Education and health services Professional and business services Information Leisure and hospitality Other Trade, transportation, utilities Financial services Government

  5. Industry Sector Employment Outlook: Services Education and health services Professional and business services Information Leisure and hospitality Other Trade, transportation, utilities Financial services Government

  6. Choosing the Right Sector: Bottom Line • Like choosing the right asset class • The best job opportunities in both growth and numbers are found in: • Education and health services • Professional and business services (consulting) • Trade • Government • Information sector • IS/IT is important in all these areas

  7. Occupational Outlook 2002-20012

  8. Technical total new jobs + replacement hires 2005-2012= 600,000 jobs Managerial total new jobs+ replacement hire 2005-2012= 150,000 Growth 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

  9. Indian Outsourcing Worst Case 2005-2012 Worst case: top Indian firms continue to grow at 12-18% annually Total new outsourced jobs all from US market= 300,000+ in 2012

  10. Most Likely Indian Outsourcing Scenario: 2005-2012 More likely scenario: 10% annual growth rate in Indian outsourcing firms due 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

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

  12. US IS/IT Jobs Forecast Wrap Up • US 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 relatively stable IS/IT wage rates • Technical jobs which can become routinized and commoditized suffer the greatest risk of outsourcing to low wage countries • Managerial jobs, and those technical jobs which require hands-on, judgmental, creative, and design skills are much less likely to be outsourced

  13. US IS/IT Jobs Forecast Wrap Up • The number of jobs outsourced to India will most likely expand at about 10% annually • Mostly technical, routinized, and commoditized positions • Indian outsourcing will fall from 18% growth down to 10% due to rising wage rates (14%) and competition from even lower wage countries • Indian 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 than expected because of lack of development throughout the country.

  14. US IS/IT Jobs Forecast Wrap Up • Eastern Europe will expand to challenge Ireland as source of outsourcing, but faces wages issues and security issues • China will emerge as a major outsourcing provider for Indian firms outsourcing to cheaper wage markets.

  15. Today’s Message From Robert Half Agency Ken, It was great speaking to you. Best of luck with the presentation. One key focus that I would focus on is the necessity of being able to communicate how their efforts and projects effect the bottom line of the company they are working for. Sincerely, Colin O'Neill Account Executive Robert Half Technology

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