A Federal Reserve report released this week compares the tech crash to the aerospace jobs disaster in the late '80s and early '90s, citing the loss of 1 in 3 technology jobs in regions such as Silicon Valley and Austin, Texas.

That report, summarized in a San Francisco Chronicle article notes signs that a tech rebound has begun, raising hope that tech jobs will return. New York Times' technology writer Steve Lohr also found evidence of a tech upturn, citing government figures ("Investment in Technology Is Roaring Softly Back", registration required).

The tech sector comeback has been

confounded by the so-called "jobless recovery" and offshore outsourcing of IT work.

Time to re-think career strategies?

Given those factors, will a rebounding tech sector raise all boats? Or is it time for IT workers to re-think IT career strategies? Can mastery of open source technologies help, or hinder job prospects? The answers to these questions aren't easy, but insights may be drawn from a consideration of past job markets and future trends.

Jim Reese, CEO of Randstad North America, an employment agency with more than $1 billion in annual revenues, offered perspectives in a September speech (pdf file). Randstad places temporary and part-time workers in a number of fields, including high-tech. Reese said that he believes the jobless recovery is at least partially an artifact, because job figures don't count growth in the number of Americans who are now self-employed.

He also says that the rush to outsource to India is having the effect of rapidly driving up wages for India's skilled IT workers. "China, Russia, Singapore, and Brazil can't keep up due to lack of offshore experience, language barriers, government policies, and other reasons," said Reese. Supply and demand dictates that as demand grows for a fixed pool of workers, the price will go up. Offshore outsourcing can entail higher costs in areas like communications and administration, so offshore wages don't need to be as high as U.S. wages to become uncompetitive.

Situation similar to auto market in '80s

The plight of U.S. auto workers, lends credence to Reese's observation. In the 1970s, Japanese auto makers rapidly captured market share in the United States, in part because of lower car prices that resulted from lower wages. Many predicted that auto assembly jobs would depart the U.S. forever. But, driven by strong demand, by the 1990s, Japanese auto workers were more expensive than their U.S. counterparts, and Japanese manufacturers were opening new plants in the U.S. to capitalize on labor pools in low cost-of-living states.

Longer term, Reese says that 76 million Baby Boomers, the largest generation in the workforce, are poised to leave the job market, citing Department of Labor predictions that there will be 10 million more jobs than people to fill them by 2010.

More importantly, Reese believes America's core competence, innovation, will stand U.S. workers in good stead. "The demand for innovation is not going away, particularly in a knowledge economy. Innovation will fuel an ever-increasing demand for workers with the right skills to make innovation pay off." Reese foresees an "all-out war for talent" in the years to come.

Innovation will always be in demand

If that's correct, where are the innovation fronts that can help shape a career strategy? Novell's purchase of SuSE confirms that Linux is becoming a mainstream technology everywhere except Redmond, Wash. (and even Microsoft now relies on Akamai's Linux clusters to shield its own Web servers). IBM, Sun, HP, and virtually every enterprise technology company now sells and supports Linux.

Sales figures show that Linux and Windows are both growing at the expense of the traditional UNICES like Solaris, AIX and HP-UX in the server market. Despite the slow economy, IDC reports that Linux continues to grow at double-digit rates. And serious analysts and IT firms are starting to talk about Linux for enterprise desktops, especially in governmental and educational settings.

While complex questions don't often have easy answers, Linux skills position IT workers in areas that are demonstrating growth, even in a sluggish economy.

Chris Gulker, a Silicon Valley-based freelance technology writer, has authored more than 130 articles and columns since 1998. He shares an office with 7 computers that mostly work, an Australian Shepherd, and a small gray cat with an attitude.

source: it managers journal
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When you have eliminated the impossible, that which remains, however improbable, must be the truth