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The Tech Sector is Flat: A Long-Term Trend, or Just a Short-Term Blip?

Written by Nick Dinsmoor

June 9, 2019

The Tech Sector is Flat: A Long-Term Trend, or Just a Short-Term Blip?

By Brian Vincik, Vice President and General Manager at Securematics

Some interesting info concerning the tech sector has surfaced in recent years — but unless you were looking for it, you probably didn’t notice. Data shows that since the birth of the technology industry as we know it today (circa 1980), output has been growing steadily but employment has remained pretty much flat. To put it another way: there’s more tech work being done every year, but roughly the same amount of people doing it.

For those of us who work in technology, this data raises important questions. First of all, why is this happening? What implications does it have for people who currently work in tech, and for those who are hoping to enter the field? Finally, is this a trend we should expect to continue, or will changes to the industry impact job growth and create more vacancies for skilled employees?

We’ve done some digging so that we can shed some light on the issue. By looking at the likely reasons for this phenomenon and examining recent industry changes, we’ll explain what current and aspiring tech workers can expect as the field continues to evolve.

Why is the Tech Sector (Still) so Small?

There are several likely reasons why the tech sector hasn’t grown as quickly as other industries, even in recent years. Here are a few factors with clear links to the field’s relatively slow rate of job growth:

Employee Burnout

Technology exists to make our lives easier, but too often we confuse that with simply being able to do more things in a given time period. Unfortunately, there’s a limit to the mental energy someone can spend on a given task — no matter how many apps there may be for it.  A survey of employees from 30 well-known tech companies showed that over 57% of respondents were suffering from burnout.

A different survey from Kronos discovered that an unreasonable workload accounted for approximately 32% of burnout amongst surveyed tech workers, while another 32% was due to too much overtime or after-hours work. The implication is that people who work with technology are often expected to do more — either because we assume their skills make them hyper-efficient or simply because the industry is competitive. This would certainly help explain why the industry is apparently able to keep doing more work with the same number of people each year.

Artificial Intelligence

More recently, we’ve seen an uptick in the number of tech companies that are relying on AI to fulfill duties previously handled by human beings. According to Forrester, technology such as artificial intelligence and machine learning will replace 22.7 million jobs in the United States by 2025. When you consider how much of a problem burnout in the tech sector has become, it’s actually quite easy to understand why companies would use AI instead of people: machines don’t take breaks, suffer nervous breakdowns, or complain about low pay (in fact, you don’t have to pay them at all).

That’s not to say replacing your staff with AI is necessarily an affordable option. In fact, even simple types of AI such as chatbots can cost over $50,000 on the high end, placing them well outside the reach of most SMBs. Since cheaper bots will have limited capabilities, it’s still not feasible for most companies to completely replace their human employees with robots. Still, AI in its current form is definitely inhibiting job growth across the tech industry as a whole.

Acquiring Talent

Even with AI taking over certain functions, it’s hard to keep a tech company growing without being able to hire top talent in key areas as you expand. Unfortunately, U.S. employers often find themselves competing fiercely for the same small pool of suitable professionals, due to a lack of public investment in STEM education and an immigration system that can make bringing in skilled labor from other countries difficult.

Why There’s Hope for Tech Companies — and Workers

What does all this mean for those who currently work in the tech sector — or those who are trying to get their start in the field? Fortunately, the implications aren’t as dire as you might think.

For one thing, many believe that AI has the potential to create at least as many jobs as it replaces — both by expanding employment in key roles such as leadership and by creating new jobs for those who maintain automated systems. If that’s true, it will likely help to decrease burnout as well, since machines will be taking over many of the more repetitive, low-level functions currently performed by humans and leaving them free for more conceptual tasks.

The talent problem is trickier, but many believe that outsourcing certain IT functions may provide the answer for tech companies and their employees. For example, third-party SOCaas providers who are well-equipped to take on the work of monitoring network security for their clients can help those businesses save enough money to hire new full-time employees in other critical roles, and ease the workload on their staff in the process. Because outsourcing also reduces costs and risks to SMBs, it can also help them grow faster — eventually creating more opportunities in the tech sector.

Growing Along with the Industry

Long-term data like the study showing slow job growth in tech over the past few decades can look pretty grim, but it’s important to remember that today’s tech industry is not the same one that existed in 1980.

As technology continues to evolve, it promises to create solutions to many of the problems that currently have companies and job-seekers worried. Furthermore, popular bogeymen like AI and outsourcing are actually much more likely to grow the economy and create opportunities than they are to take them away — at least, in the grand scheme of things. 

Organizations and individuals who embrace these changes instead of resisting them will most likely be among the first to reap the considerable benefits they offer.


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