Meeting the Digital Work Force Challenge
Testimony Before the Warner Commission on the 21st Century Work Force
March 2000

Mr. Chairman, and members of the Commission, thank you for inviting me to participate in this hearing. I know all of us involved in the information technology (IT) work force challenge believe the Commission’s work is vitally important and look forward to your final report on this subject due later this year. I appreciate the opportunity to contribute to your work by providing an overview of the Commerce Department’s latest report on the subject, The Digital Work Force Challenge, Building Infotech Skills at the Speed of Innovation.

	“business-to-business ecommerce will rise to $1.3 trillion by 2003, and online retail sales will grow to $40-$80 billion by 2002.”

Information technologies are a driving force in our strong economy. Over the past four years, IT-producing industries have contributed to more than one third of real economic growth. In 1996 and 1997, falling prices in IT-producing industries brought down overall inflation by an average of 0.7 percentage points, contributing to the remarkable ability of the U.S. economy to control inflation and keep interest rates low in a period of historically low unemployment. The IT industries have achieved extraordinary productivity gains. During 1990 to 1997, IT-producing industries experienced 10.4 percent average annual growth in value-added per worker. Forecasters estimate that business-to-business ecommerce will rise to $1.3 trillion by 2003, and online retail sales will grow to $40-$80 billion by 2002.

The widespread deployment of digital technology has created very strong demand for highly-skilled IT workers, and there continue to be many reports of employers having trouble recruiting and retaining enough workers with the skills in demand.

Meeting our country’s need for IT skills, of course, is the charge to this Commission, and it is also the subject of our report. The analysis in our report is based on a year-long dialogue with stakeholders in the business, education, government, and employee communities, which included:

• The National IT Work Force Convocation held in Berkeley, California in January 1998;

• Regional meetings sponsored by the Department of Commerce, as well as other meetings around the country in which Commerce Department officials participated or served as panelists; and

• Review of a wide range of data on the IT work force; and regular monitoring of new literature on the subject, including academic reports, reports in the media, commentary, and expert testimony before the U.S. Congress.

Let me first provide some basic information on this labor market, then I will discuss areas of challenge and possible approaches to improving IT work force development.

Recently, the Commerce Department’s Office of Technology Policy analyzed occupational employment projections, based on data released in November 1999 by the Bureau of Labor Statistics. These employment projections show that, between 1998-2008, more than 2 million new skilled IT workers--computer support specialists, database administrators, computer scientists and engineers, systems analysts, and computer programmers--will be needed to fill newly created jobs and to replace IT workers leaving the field. That is an annual average demand of about 200,000 skilled IT workers. About three-quarters of these jobs are projected to be in IT occupations normally requiring at least a bachelor’s degree, and one-quarter are projected to be in IT occupations normally requiring an associate degree.

Today, there is no single path to prepare a worker for a skilled IT job. Most get their education from four-year colleges. But other paths taken include: two-year degree granting community colleges, special university/community college one year programs designed to upgrade the skills of current IT workers, proprietary schools, private sector certification programs, and in-house company training.

	“Two-thirds of all workers in the highly skilled IT occupations hold a bachelor’s degree or higher.”

The education profile of today’s IT work force demonstrates the high skills needed for these jobs. Two-thirds of all workers in the highly skilled IT occupations hold a bachelor’s degree or higher. Of those with a bachelor’s degree, 46 percent have degrees, minors or second majors in computer science or computer engineering; 86 percent of the degree holders have a degree in a science or engineering discipline.

The soaring demand for IT workers has been highly publicized and, as a result, markets are responding. For example, after a 40 percent drop in bachelor’s degrees awarded in computer science between 1986 and 1994, in the past three years, bachelor-level enrollments in leading U.S. computer science and computer engineering programs more than doubled. Community colleges, proprietary training institutions, and IT vendor certification programs have responded to the demand, with many individuals enrolling in these programs which would qualify them for technician and support-level IT jobs. Last year, Microsoft reported that it would train, in that year, 1.2 million people around the world through 1,900 commercial training companies and 900 U.S. academic institutions. The private sector, and state and regional organizations are stepping up their training efforts. In addition, as you will hear about in detail from my fellow panelists, the Federal government is investing tens of millions of dollars to educate and train workers for IT jobs.

There are important qualitative aspects of the IT labor market that need to be considered in the education and training of these professionals. IT labor markets are complex and dynamic. Supply and demand characteristics vary by industry segment, by IT occupation, and by specific skills. Short product life cycles, and the variety of software and hardware products and their applications, together with the differing business requirements of different industry sectors, have created demand for workers with various combinations of IT skills, experience, and industry knowledge. This is expressed often by employers as needing"the right person with the right skills at the right time."

Due to time and competitive pressures, many employers seek job candidates with exact skill fit, requiring no additional training. Many companies have concluded that they cannot afford the time penalty and uncertainty associated with "making" the employees they need through training or retraining. Instead, they pursue a "buy" strategy, seeking the exact skills and experience they need for a particular project, and paying a premium for them.

With this approach, companies are able to reduce the risks associated with the uncertainty about future skill needs, while reducing or even eliminating the cost of training. At the same time, employers can be reasonably assured that new hires are able to hit the ground running. Another reason companies may be reluctant to invest in training IT workers is the fear that they will create an attractive target for poaching by other companies, and thus fail to gain a return on their investment.

While these labor market characteristics are most prevalent in the high-growth, fast-moving IT-producing industries, IT-using industries--such as insurance, banking, retail, and manufacturing--also feel the effect, because they tap the same pool of labor. They too have to pay premiums to acquire talent in high demand, and they also risk losing employees in whom they have invested to upgrade IT skills.

The national dialogue on the IT work force sponsored by the Department of Commerce focused principally on strategies to expand the number of individuals who have been trained in IT skills. I would like to briefly highlight some of our findings.

	“there is no "silver bullet”

A resounding conclusion from our nationwide dialogue is that there is no "silver bullet" solution to ensuring we have the IT skills we need to promote competitiveness. There is a continuum of challenges, and action is needed all along the continuum.

First, we need to improve the negative, "nerdy" image of the technical professions, so more young people will be attracted to these fields.

Suggested approaches for casting a new image include: one or more national media campaigns to highlight positive images of technical workers, and communicate what they do, and what skills are needed. At the state and local level, business and government officials could establish a dialogue with local media to encourage a more positive portrayal of technical workers, and expanded coverage of the community’s science and technology activities, and the people who participate in them.

	“We worked with the Warner Brothers Network to develop a series of high impact public service announcements targeting its teenaged television audience. The ads feature some of Warner Brothers’ popular young television stars.”

The Commerce Department has been working in partnership with the private sector to develop such campaigns. We worked with the Warner Brothers Network to develop a series of high impact public service announcements targeting its teenaged television audience. The ads feature some of Warner Brothers’ popular young television stars.

We are also partnering on a national media campaign for America’s youth in which Women in Film--a Hollywood-based nonprofit organization--will create public service announcements encouraging students to study math and science to prepare for technical careers. The National Association of Manufacturers will create campaign support elements, such as a 1-800 number, web site, posters, and other materials, and work to ensure the broadest possible dissemination of these materials.

Second, many students need more and better career information. This is especially important in the middle school years, when students form strong opinions about careers. Strategies here include: job shadowing and mentoring programs; field trips to high-tech facilities; internships and summer work experiences; and more engaging career information for students, their parents, teachers and guidance counselors.

Third, students must be well grounded in math and science to qualify for college level technical instruction programs. Yet too many students are taught math and science by teachers who are not fully prepared to teach in these fields. Studies at the primary and secondary school level show a correlation between higher student test scores and teachers who have had more advanced courses in math and science. Well prepared teachers more often encourage student questions and discussions; spend less time on unrelated topics; permit discussion to move in new directions on the basis of student interests; and generally present topics in a more coherent, organized fashion.

The quality of math and science teaching is a priority now as school systems around the country struggle to fill their teaching positions. Strategies for improving K-12 math and science education focus on: supporting rigorous math and science curriculum taught by qualified teachers for all students. We can make more stipends and scholarships available for teacher training in math and science. Companies could sponsor summer internships and work experiences for math and science teachers. Companies could also send technical professionals into the class room to speak, or work on science and technology projects with students.

	“For universities, it can take three years, maybe even longer, to develop a new curriculum and get it approved. This is just too slow for today’s pace of technical change.”

Fourth, we have challenges at the college level. For example, keeping college level technical curricula relevant and up-to-date is a serious problem. For universities, it can take three years, maybe even longer, to develop a new curriculum and get it approved. This is just too slow for today’s pace of technical change. Also, post-secondary students need greater knowledge of the work environments to which they will move after graduation.

There is also the tricky question of balance. Our IT education and training programs need to provide IT workers with marketable skills--which are often proprietary in nature, in high demand today, but obsolete tomorrow--and with more generic knowledge and skills that will allow IT workers to navigate shifts in technology.

Strategies to help ensure technical workers have timely and relevant knowledge and skills include: developing student opportunities for work-study, internships, mentoring, and joint projects--all with potential employers. College faculty would benefit from exposure to high-tech companies through internships, summer jobs, sabbaticals, rotation and exchange programs. We would like to see more one-on-one relationships between faculty and their counterparts in high-tech industry, so educators can get advice on employer needs, technological trends and curriculum design. Companies can sit on a college advisory boards, and lend their technical professionals to teach a class. To help retain technically-trained faculty when the lure of lucrative private sector jobs is strong, educational institutions should consider rewarding faculty who acquire contemporary IT skills.

Due to the increased use of IT in nearly all fields of work, the academic community should consider adding some technical training as a component of non-technical education programs such as those in health care, business, education, or marketing. Students in technical programs need to know about non-technical aspects of their jobs--in areas such as project management, entrepreneurship, human resources management, and more.

	“we need to find creative ways to tap new pools of labor.”

Fifth, we need to find creative ways to tap new pools of labor. Some programs are working to move nontraditional job candidates--such as college graduates with non-technical degrees, older engineers, and mid-career workers--through alternative career paths outside of the traditional IT pipeline.

There is also a strong need to get more women and minorities into technical education and careers. Businesses could offer math, science, or engineering scholarships through groups representing women, minorities, and the disabled. They should form alliances with women’s and minority colleges, sororities, student groups, Native American schools and tribes, and professional associations. Using these alliances for worker recruitment, internship programs, mentoring, and training will help create market pull on these groups under represented in the technical professions.

Sixth, we must focus on keeping incumbent workers’ skills up-to-date. As I mentioned earlier, many companies are reluctant or unable to invest in training IT workers, viewing the cost, and especially the risk, as too high. However, employers could cooperate and form training consortia to reduce the cost and risk of training workers, and to build-up regional training infrastructure. The skills consortium model is emerging as a best practice. There are some good industry led models such as the Global Wireless Education Consortium, established to increase the quality and quantity of technicians, engineers, and IT specialists in wireless communications, as well as the SEMATECH Partnering for Workforce Development program focused on developing skilled technicians for the semiconductor manufacturing industry.

Participants in our nationwide dialogue believe workers need more training resources--scholarships, low interest loans, time off of work for training, training on the desk top, and training on company networks that can be tapped at home. Also, today, many post-secondary students are job holders, with families and other kinds of responsibilities. Providers of IT education and training need to be more flexible and serve this population with shorter courses, courses at different times of the day and week, and at different locations. It also means expanding the use of teletraining, moving toward an era in which IT can be used to enable training any time, any where.

Finally, I know the Commission is focusing on best practices related to IT. That is why I want to call your attention to our Go4IT! web site which we launched in July 1998. Through the web site, which lists more than 300 resources, visitors can learn about high-tech work force initiatives across the country. I encourage you to visit the site at www.go4it.gov.

Answering the IT work force challenge will require many stakeholders to undertake a wide range of initiatives, both large and small. And many of the actions outlined in The Digital Work Force report are well within the reach of individual stakeholders in the business, education, and government communities.

Through collective action, they can make a real difference.