How many tech jobs might Obama help create?

Maybe none, maybe 300k
His choices will determine industry winners and losers
Patrick Thibodeau


December 11, 2008 (Computerworld) WASHINGTON -- If all goes as planned, President-elect Barack Obama will sign a massive federal stimulus bill shortly after taking office next month. A major goal of the plan is to create at least 2.5 million jobs, but it's a number that's looking smaller as time goes by.

The U.S. Department of Labor said on Thursday that initial claims for state unemployment benefits rose to 573,000 last week. Unemployment is rising, and not just because of weak sales in the nation's consumer-based economy -- offshore outsourcing may be accelerating as companies seek to cut costs.

But how many tech jobs might be saved or created by a federal stimulus package? Obama has already released a broad outline of a plan that calls for heavy tech investments in schools, health care, broadband networks and energy. But the details of those sketched-out plans could determine which tech industries fare well and which ones don't.

If the Obama administration favors WiMax over wires as a way to connect and improve IT in schools, for instance, the need for tech workers to do the job may slacken, said Rob Enderle, an independent IT consultant in San Jose.

Enderle pointed to AT&T Inc.'s recently announced layoff of 12,000 people, which is affecting many of its land-line workers. "If part of your goal is to employ more people, maybe you don't use WiMax because you actually want people out there pulling cable," he said. Less money spent on tech projects could mean more money for road building; that's why Enderle estimates that of the 2.5 million jobs Obama envisions, just 50,000 to 200,000 would go to tech workers.

Estimates about the size of the nation's high-tech workforce vary. One group, the National Association of Computer Consultant Businesses in Alexandria, Va., this week put it at about 3.87 million and said tech employment is now declining. That's out of a total labor force of about 154 million U.S. workers.

Katherine McGuire, vice president of government relations at the Business Software Alliance, said if Obama's "pro-tech agenda" is pushed forward in its entirety, the nation could see a 10% gain in tech jobs. That would represent an increase of about 300,000 high-paying IT jobs.

McGuire noted that IT isn't the lone driver for high-skills jobs. Obama "is right to seek incentives for innovation and growth across the entire economy, which in turn will spur more growth in the IT sector."

Mark Barnekow, executive vice president of mergers and acquisition at iTrade Network Inc., which provides software-as-a-service business apps for the food industry, estimated that between 50,000 and 100,000 tech jobs could be saved or created. He bases those figures on expected tax credits to small business; a loosening of credit; rewards for companies that employ American workers; science, research and broadband investments; clean technology efforts; and retraining for workers.

But Scott Staples, president and co-CEO of MindTree Ltd., a consulting and IT services company in Warren N.J., predicted that the stimulus package will be focused on job protection, not job creation. He doesn't see a lot of new jobs emerging. "The real question to ask is how many jobs will be saved by the stimulus package, because it certainly won't create new jobs," he said in e-mailed comments.

Staples believes the stimulus will focus on bailing out the financial services sector, the mortgage industry and automakers -- especially the latter.

"GM, Ford and Chrysler created this mess on their own, and no amount of funding from the government will help them, because their problems are deep-rooted," said Staples. "Instead of being the leaders in their industry for creating new age cars with world-leading fuel efficiency, alternate fuel technology, new technologies and sleek designs, they are laggards in most areas -- so, why bail them out? The simple answer is to protect jobs."

If the U.S. wants to stimulate job growth, it needs to ensure that businesses have access to cash and focus any stimulus on one sector so the U.S. can become a world leader in it, such as water purification and desalination, clean and alternate energy, alternate-fuel engines, or even chip design, he said. It's an approach that will also require changes to areas like education and the nation's tax structure.

"When we take drastic measures like this, we will create jobs," Staples said.