It seems that after few years of slowing down, the technology industry is beginning to enjoy better time again as businesses and governments around the world begin spending on information technology (IT). According to a report by Forrester Research, the IT industry will “explode” bigger than before as more companies are considering IT as strategic factor to keep them competitive in the global market. The research firm predicts that global IT spending will increase about 9 percent to more than $1.6 trillion in 2010 and more in the next five years.
Andrew Bartels, Forrester Research vice president declared: “The technology downturn is unofficially over, everything is ready for a more tech spending and hiring. The US, the technology market will be much stronger than any other market with technology spending growing more than twice the rate of gross domestic product.” The data indicated that in the past six months of 2010, global purchases of computer equipment has increased by 10%, communications equipment has increased by 8%, software spending has increased about 11% and IT outsourcing services already reached 8% higher than last year.
The U.S technology market is not the only place that grow but European market is also forecasted to have the strongest growing in many years where technology purchases will rise by 12%. The research also predicts that technology market in Canada will grow by 10%, in Asia Pacific by 8%, and Latin America by 7%. With the exception of Eastern Europe, the Middle East, and Africa, almost every country will enjoy significant growth with their technology markets. Forrester Research predicts that hiring in the technology will increase by the end of the year and continue in the next several years with wages also increase at least by 6% each year as there is still a shortage of skilled workers in every country.
Throughout the economic downturn, most companies had to layoffs many workers but the technology industry remained stable with minimum layoffs. In the next several year, the prospects is bright for Web developers because more companies are relying on their websites to sell products and services. Many governments are also increasingly depend on their websites to provide services to their citizens so people with web development experiences would have no problem finding jobs. According to Forrester, demand for Web developers remains very strong throughout the world but this field also has become more specialized as more tools and technologies are available. The most sought after jobs are network security specialist, network architect, and software project manager. Forrester research found that more than 30% of company surveyed plan to hire more Web developers this year and as a measure of the strong demand, most Web developers said they received raises between 6% to 12% last year.
The IT growth also fuels the outsourcing industry in India. According to the new study of National Association of Software and Service Companies (NASSCOM), the IT outsourcing will create 30 million additional jobs (10 million directly and 20 million indirectly) by 2020. In the past ten years, the IT outsourcing industry has directly employed about 3 million software people and indirectly created additional 18 million jobs. NASSCOM predicts that IT outsourcing and engineering development earning will achieve about $1.4 trillion by 2020. However, the study also warned that industry revenue growth that has increased 40 percent over the last ten years may slowdown due to the shortage of qualified skilled workers. Currently, Indian’s IT industry is experiencing a critical shortage of skilled people which lead to an “internal war” among companies for talents. About a third of the Indian software workers are changing jobs every years to get better salaries and positions. Company recruiters reported that they had to throw in “additional bonuses” to lure talent to their companies. The most popular incentives were higher salaries of 10% or more or extra bonuses such as longer vacations, more oversea assignments, and sign-on bonus of cash.
As the IT market continues to grow with high demand for workers, more countries are jumping in the market. China is considered a “key contender” that could compete directly with India. China has better infrastructures, more government incentives, lower costs but the key weaknesses are lower quality products, poorly trained managers, lack of enforcement for intellectual property, and significant problem with software piracy. According to several studies, most western companies are reluctant to outsource to China for fear of Chinese companies copy their products and sell them at much cheaper prices. Ken Brown, a China business consultant explained: “China already did it with consumer products such as TV, Home appliances, stereo systems, computers, electronics gadgets etc by copy Japanese and S. Korean products. They are doing the same with motorcycles, cars, machineries etc., there is no reason they would stop at anything. Today you can buy many “Counterfeit products” made in China as they are exported them everywhere. I do NOT think China will be able to push India aside in IT market. Their education system has not catch up with the rest of the world, they are still focus on cramming and passing exams with no practical aspects. Their IT workers can only do limited works, such as programming and testing but have little concept of design or build larger systems. Most IT companies are not well managed, most products have high defects as they are still learning how to do business globally. Contradict to several predictions, I do NOT think China can go very far because of their “mindsets” of build low quality product or copy somebody products and sell them at cheaper prices. If you look at everything that they build, the quality is very low, it may be acceptable for some cheap products such as toys, clothes, shoes but for software, it is unacceptable.
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Prof. John Vu
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Source: SEGVN