Information Technology and the Future of Work
With the economy in its best shape since before the 2008 financial crisis, a recent study from the University of British Columbia and Massachusetts Institute of Technology indicates that jobs in information technology — like computer software, big data, and cybersecurity — are providing Americans with long lasting financial stability. Published in August at the Journal of Monetary Economics, the study, “Structural Transformation and the Rise of Information Technology,” highlights the breadth of opportunity in IT jobs in the emerging economy.
The study indicates that when compared to other occupations, information technology jobs substantially outperform other occupations. The share of information technology jobs increased by an impressive 19.5 percent between 2004 and 2017, whereas less IT-intensive occupations grew by only 2.4 percent over the same period. Furthermore, the growth in IT jobs is more than eight times the growth rate than other jobs over the past decade.
“The future of jobs is in IT, and IT-intensive tasks,” said Giovanni Gallipoli, co-author of the study and associate professor from the Vancouver School of Economics at UBC. “Growth and productivity in jobs involving IT tasks are very strong, and workers who can perform such tasks have a clear competitive advantage in the labour market.” Moreover, when prompted about concerns about artificial intelligence and automation displacing more works, Christos Makridis remarked that “information technology skills are going to become essential to remain competitive in the modern workforce…. [U]nderstanding how to leverage technology to make humans more productive is no longer a luxury, but a necessity.”
While recent research from the Council of Economic Advisers points out that real wage growth has been roughly 1.4 percent in recent years, individuals working within information technology jobs have experienced particularly high wage growth. In fact, even though some have suggested that individuals with college degrees are not experiencing the same gains in the labor market as they used to, it is precisely the graduates in information technology jobs who have experienced the most rapid wage growth – roughly 6.5 percent more than their counterparts. “Both companies and workers stand to benefit if they invest in IT education,” said Gallipoli.
Despite the decline in traditional manufacturing jobs from automation or outsourcing, the study also shows that a subset of jobs in manufacturing that involve IT tasks have increased in number, as well as having high productivity growth and returns. These developments have helped to transform the nature of employment in manufacturing, creating a greater demand for workers with computing and technical expertise.
According to the researchers, companies often struggle to hire enough workers for IT-intensive tasks, suggesting the presence of a skills gap for jobs with digital and technical requirements. The insufficient number of job applicants with IT expertise indicates the possibility of workers’ mismatches in the labor market. In addition, this trend also highlights the need for additional training, whether formal or on the job, that focuses on the skills most desired by employers. For example, Makridis has previously commented that new models of education are going to be required to help individuals acquire the skills and habits they need to excel in these high technology jobs and stay competitive over the course of their careers. Universities, like Arizona State University, have been particularly effective at providing educational services at scale for a diverse group of students—rich and poor, young and old.
Much of the debate around automation and the role of technology in employment today focuses on its impact on jobs — or worries about how workers are going to be replaced by robots — as evidenced by Silicon Valley executives like Mark Zuckerberg warning of large-scale job displacement. However, the paper’s authors stress that greater focus needs to be paid to its effects on productivity, wages, and the ongoing structural change in the labor market in both manufacturing and services.
“Our research starts to highlight these sizable effects, and the growth in employment demand for certain IT-intensive tasks cannot be easily automated or offshored,” Gallipoli said. “The emergence of IT intensive jobs has had a major impact on the structure and on the distribution of wages both within and across sectors.”
Christian I. Giadolor, a Texas native, was a RealClearPolitics summer intern. He is a student at Stanford University majoring in political science.
