The Economics of IT Three Perspectives on IT Economics Todays - - PowerPoint PPT Presentation

The Economics of IT

Three Perspectives on IT Economics

Today’s Topics

1) Economic Composition 2) Industry Composition 3) Labor Supply

Economic Composition

What kind of work do we do?

Staffing Patterns for IT

Share of IT Employment in Idaho

Source: Idaho Department of Labor

Industry Growth Projections

Projected Growth: 2014 – 2024

Source: Idaho Department of Labor

Idaho’s Technology Gap

STEM Industry Size and Growth in every State – Shares

Source: US Bureau of Labor Statistics

Washington Idaho

Source: Idaho Department of Labor

Idaho’s Technology Gap

Growth in Computer and Mathematics Occupations

Industry Composition

How do we work?

Public Enemy Number One

The Stocking Frame Knitting Machine

The Pattern of Modern Automation

Where are we?

Agriculture Industrial Clerical Services

Staffing Patterns for IT

Share of IT Employment in Idaho

Source: US Bureau of Labor Statistics & Federal Reserve Bank of St. Louis

+181%

• 28%

The Automation Paradox

Some Headlines

• Why Are There Still So Many Jobs?

(David Autor, PhD – Journal of Economic Perspectives)

• Robots Aren’t Destroying Enough Jobs.

Greg Ip, Wall Street Journal

• False Alarmism: Technological Disruption and the U.S. Labor

Market.

John Wu, PhD – Information Technology and Innovation Foundation

The Automation Paradox

The Verbal Model

Significant Automation in a small subset of Industries Displaced Workers must seek work in new industries Labor Glut! Reduced price of labor in low skill industries Cheap labor reduces financial incentives to automate Cheap labor reduces financial incentives to automate Overall Productivity Growth remains muted

The Automation Paradox

The Verbal Model

Significant Automation in a small subset of Industries Displaced Workers must seek work in new industries Labor Glut! Reduced price of labor in low skill industries Cheap labor reduces financial incentives to automate Cheap labor reduces financial incentives to automate Overall Productivity Growth remains muted

Sources: Frey & Osborne, Oxford Martin School, 2013; U.S. Bureau of Labor Statistics: 2010 Occupational Employment, Idaho Department of Labor, 2016

Low Medium High 29.2% 14.7% 46.5%

Percent of 2024 Projected Total Employment in Idaho

Automation Risk in Idaho

Distribution of Automation Probability

Healthcare’s Regulatory Bubble

Idaho Employment in Healthcare Practice and Support

Source: Idaho Department of Labor

Labor Supply

Where are we going to get all these brogrammers?

Limited Graduate Supply

Idaho Computer Science Graduates per Year

Annual Openings 525 per Year

Source: Idaho Department of Labor, IPEDS

Educational Output

Growth in Computer Science Degree Completers

Source: Idaho Department of Labor

Source: IPEDS

Educational Output

Idaho’s Share of Regional Completers

Idaho’s Technology Gap

STEM Industry Size and Growth in every State – Shares

Source: US Bureau of Labor Statistics

Washington Idaho OR UT

Employment Projections

2014-2024 North Idaho Projections

Source: Idaho Department of Labor Occupation Title 2014 Employment 2024 Projection Total Growth Growth Rate Annual Openings Software and Systems Developers 423 628 205 48% 260 Network Administrators 147 197 50 34% 17 Network Specialists 237 320 83 35% 11 Web Developers 86 137 51 59% 6 Total 893 1282 389 43% 294

Conclusions

Today’s Topics 1) IT-Intensive Industries are projected to be high-growth 2) Economic and Political factors will likely cause new industries to experience their own IT renaissances 3) Idaho’s STEM labor supply presents a continued barrier to growth

Sam Wolkenhauer Regional Economist Idaho Department of Labor Sam.Wolkenhauer@Labor.Idaho.Gov