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India-based technology companies have doubled to 280,000 the number of people they directly and indirectly employ in their US operations in the last five years, according to a new study by the National Association of Software and Service Companies (NASSCOM).
The study, "Contribution of Indian Tech Companies to the US Economy," also reaffirms US government figures that show investments from India to the US grew by 90 percent in 2010 from the year before. Trade between India and the US has increased eightfold in the last 20 years, the study says.
"Indian technology firms are deeply committed to the US. Both they and their employees are important contributors in their local communities as well as the country as a whole. The report that we have released is our endeavor to quantify the trends and benefits behind the significant investments India-based IT and BPO firms are making in the U.S.," said Som Mittal, president of NASSCOM.
"The next phase of this partnership will see a continuation and vast expansion of the investments both nations are making in the other. We look forward to a greater engagement in the future, working closely with the US companies to build their growth."
The explosive popularity of applications has spurred a US jobs boom that, according to TechNet, has produced 466,000 new jobs since 2007. The jobs are for programmers, user interface designers, marketers, managers, and support staff.
The bipartisan policy and political network of technology CEOs found that "App Economy" jobs are spread throughout the nation. The top metro area for App Economy jobs is New York City and its surrounding suburban counties, although together San Francisco and San Jose together substantially exceed New York.
While California tops the list of App Economy states with nearly one in four jobs, states such as Georgia, Florida, and Illinois get their share as well. In fact, more than two-thirds of App Economy employment is outside of California and New York. The results also suggest that the App Economy is growing quickly and that the location and number of app-related jobs are likely to shift greatly in the years ahead.
“America’s App Economy – which had zero jobs just 5 years ago before the iPhone was introduced – demonstrates that we can quickly create economic value and jobs through cutting-edge innovation,” said Rey Ramsey, president and CEO of TechNet.
Conventional employment numbers from the US Bureau of Labor Statistics are not able to track such a new phenomenon because this economic ecosystem is so new, according to TechNet. The research analyzed detailed information from The Conference Board Help-Wanted OnLine (HWOL) database, a comprehensive and up-to-the-minute compilation of want ads, to estimate the number of jobs in the App Economy.
The total number of Apps Economy jobs includes jobs at ‘pure’ app firms such as Zynga as well as app-related jobs at large companies such as Electronic Arts, Amazon, and AT&T, as well as app ‘infrastructure’ jobs at core firms such as Google, Apple, and Facebook. In addition, the App Economy total includes employment spillovers to the rest of the economy.
The survey was conducted by Michael Mandel, president of South Mountain Economics.
IT employment reached an all-time high with an increase of 13,300 jobs in January, according to TechServe Alliance. January’s record surpasses the previous all-time high set in September 2008 when IT employment reached 4,088,600.
The number of IT jobs grew 0.3 percent sequentially last month to 4,107,700, according to TechServe Alliance, a collaboration of IT services firms, clients, consultants and suppliers. On an annual basis, IT employment grew by 3.4 percent in 2011 and 1.5 percent in 2010. These latest numbers are based on the rebenchmarked data released by the US Bureau of Labor Statistics (BLS) this month.
"I am thrilled that IT employment has surpassed its previous all-time high---an encouraging sign not only for the IT services industry, but the economy at-large,” stated Mark Roberts, CEO of TechServe Alliance. "Given strong demand for IT talent, high wages these professionals command and the benefits of IT to the broader economy, policymakers should do all they can to create an environment which encourages such work to be performed in the United States,” added Roberts.
Computer system and design services jobs increased by 4.4 percent year-over year, while employment in management and technical consulting was up by more than 6 percent, the alliance said.
Egypt's outsourcing industry netted $1.1 billion in export revenue in 2011, and expects to hit $10 billion by 2020, according to Egypt's Information Technology Industry Development Agency (ITIDA).
The sector recorded a 12 percent increase in the number of ICT companies in Egypt, and a nearly 10 percent increase in the number of people employed in the sector.
Motorola expanded its presence in the region in 2011 with a new office and Regional Engineering Center in Cairo, designed to be a key office for the Middle East and North Africa (MENA) region. Stream International, Orange Business Services, HSBC, and Sutherland have also expanded in Egypt, with Sutherland increasing its staff this year by 146 per cent to 460 people.
Valeo, the French automotive supplier, has increased the number of newly graduated Egyptian engineers this year – from 278 in December 2010 to 420 in December 2011. The company plans for continued growth, with headcount in Egypt predicted to increase to 540 in the next two years. Valeo's Egyptian premises will be the company's main branch for R&D and innovation in automotive software.
The Information Technology Industry Development Agency (ITIDA) is a governmental entity affiliated with Egypt's Ministry of Communications and Information Technology. Located in the 600-acre Smart Village outside Cairo, ITIDA is dedicated to driving the IT industry in Egypt.
The number of jobs in computer systems design and related services has increased 65 percent over the last year, but decreased by 2,300 over the past month, according to new figures from Janco Associates. In addition, the number of jobs in information services increased by 21 percent and the number of jobs in the telecom sector shrank by 43 percent.
Overall, however, IT hiring slowed in October, with a net loss of 2,300 jobs in October. Janco CEO Victor Janulaitis said that compares to a gain of 31,800 jobs in September. “According to the BLS data there was an overall loss of IT jobs with the telecommunications job market losing 900 jobs, computer system design and related services losing 2,300 jobs, data processing and hosting losing 500 jobs, and with only a small increase (1,400 job added) in other information services," he said.
Over the past three months, there has been a net loss of 4,800 jobs. Janulaitis added that the BLS data is in line with what he has found in interviews with both CIOs and CFOs in companies that have IT departments with at least 100 IT professionals.
Continuing uncertainty about the economy is impacting staffing levels at information technology companies, according to the latest CompTIA IT Industry Business Confidence Index.
“Firms refrain from spending, which signals to vendors a slowdown, which causes spending restraint in other areas. No one wants to move first. This vicious cycle ripples throughout the economy.”
In the quarterly survey, 54 percent of IT firms say they are understaffed by 5 percent or more. Another 22 percent of firms are fully staffed, but would like to hire more workers to expand their business.
Among the types of staff IT firms plan to hire or would like to hire, 56 percent of surveyed firms said programmers and application developers; 43 percent, help desk and support personnel; 41 percent, project managers; and 40 percent, sales staff.
Even when companies decide to act on filling their staffing needs, they struggle to find qualified candidates despite the large pool of unemployed workers. In the CompTIA survey, 74 percent of IT firms said it’s somewhat or very challenging finding quality candidates with the right skills and experience when openings must be filled.
The overall CompTIA IT Industry Business Confidence Index for the fourth quarter of 2011 fell by 1 points to 51.9 on a 100-point scale. Although still in net positive territory (greater than 50), economic malaise has clearly set in. This marks the third consecutive quarterly decline in the confidence index this year.
Looking ahead, the IT industry executives predict a 1.9 gain in the index in Q1 2012. The CompTIA IT Industry Business Confidence Index is compromised of three metrics: opinions of the US economy, opinions of the IT industry and opinions of survey respondents’ own companies.
The data suggest that staffing shortfalls are most prevalent among larger companies ($100 million or more in annual revenue). Micro firms – those with less than $1 million in annual revenue – are most likely to report being fully staffed at their desired levels. It’s worth noting, though, that micro firms tend to operate with lean staffs, compared to larger firms that have more organizational layers and therefore may experience more frequent changes in headcount.
The impact of the staffing crunch is felt most directly by workers now on the job:
* 55 percent of IT firms are requiring workers to multitask more. * 45 percent are requiring salaried workers to put in more hours.
Nearly a third of companies (32 percent) say they’ve postponed or canceled projects due to staffing shortages.
CompTIA’s IT Industry Business Confidence Index for Q4 is based on an online survey of IT industry executives and professionals conducted in late September and early October 2011. A total of 427 IT companies participated in the survey. The complete report is available at no cost to CompTIA members who can access the file at www.CompTIA.org or by contacting email@example.com.
Overall IT employment was flat last month, but is up by more than 3 percent compared with June 2010. According to TechServe Alliance's monthly index, the IT sector employed more than 4 million last month, an increase of 133,000 over June 2010.
Within the IT sector, more than 1.5 million people work in computer systems and design services, an area that saw a nearly 5 percent increase in employment during the past year. About 240,300 people work in data processing, hosting, and related services, about the same number as a year ago. The telecommunications arena employs 869,900, about 3 percent less than in June 2010.
TechServe Alliance CEO Mark Roberts stressed that the IT sector is outperforming the rest of the economy, and that the organization foresees a positive outlook for the rest of the year.
The insurance sector is at the leading edge of an otherwise tentative recovery in IT operational sending this year, according to the newly released IT Spending and Staffing Benchmarks study by Computer Economics, an IT research and advisory firm.
The study finds that median spending on IT operations is rising 5 percent in this sector, which is not only a substantial year-over-year improvement but also well above the median 2 percent growth for organizations across all sectors in the US and Canada.
The wholesale distribution, discrete manufacturing, and high-tech sectors also have better-than-average improvements in IT operational spending, with median growth rates of 4.5 percent, 3.8 percent, and 3.5 percent respectively, the study finds.
To no surprise, the sector dragging the averages down is government. Median IT operational spending by governments is falling 3 percent, the second year in a row that IT organizations in the government sector have reduced spending. The retail and banking and finance sectors also continue to show below-average growth in median IT spending, at 1 percent and 1.1 percent respectively.
"We are seeing a recovery in both IT operational and capital spending after two years of zero growth, but the recovery is still weak and remains uneven from sector to sector," said Frank Scavo, president of Computer Economics, Irvine, Calif. "The good news is that we are finally seeing new systems, upgrades, and infrastructure improvements back at the top of IT spending priorities."
Sectors falling in the middle include healthcare providers (3.1 percent), process manufacturing (2.5 percent), energy and utilities (1.8 percent), and professional and technical services (1.7 percent).
The modest increase in IT spending this year is not reflected in IT hiring plans: only 34 percent of organizations are increasing IT headcount, while 27 percent are reducing staff levels.
Though the rate of growth slowed in May, IT employment continued its pattern of month-over-month growth by adding 1,100 jobs. According to TechServe Alliance's monthly index, the number of IT jobs grew by 0.03 percent in May to 4 million, and is up more than 100,000 jobs from May.
"May marks the 17th consecutive month that the number of IT jobs has increased,"observed Mark Roberts, CEO of TechServe Alliance. “While the rate of growth moderatedlast month, the long-term trajectory of IT employment remains decidedly positive.”
The number of jobs in the computer systems and design services realm increased to 1.5 million, up 0.55 percent from the previous month and 4.52 percent since May 2010. The number of data processing and hosting jobs rose to 240,500, up 0.29 percent sequentially, but down by 0.74 percent in the year-over-year timeframe. The number of telecom jobs shrank to 867,600, down 0.39 percent from April and 3.71 percent from May 2010.
The Indian outsourcing industry expects to add 240,000 workers this year, bringing direct employment in the sector to nearly 2.5 million, according to NASSCOM, the industry's trade group. And as the global outsourcing industry evolves and the acceptance of cloud computing grows, NASSCOM expects employment to expand into new areas.
"Indian IT service offerings have evolved from application development and maintenance to emerge as full-service players providing testing services, infrastructure services, consulting, and system integration," NASSCOM officials wrote in their annual strategic report.
The outsourcing industry now accounts for 6.4 percent of India's Gross Domestic Product, up from 1.2 percent in 1998. This year, it is forecast to generate US $88.1 billion in revenue, all but US $12 billion contributed by IT software and services.
United States companies in 2010 accounted for 61.5 percent of the business. Banking, financial services, and insurance companies remained steady customers, with retail, healthcare, media, and utilities procuring an increasing amount of outsourced services. The IT services segment was the fastest-growing, expanding by 22.7 percent over the previous year.
As of 2010, NASSCOM estimated that India held 55 percent of the IT and business process outsourcing market. The group credits India's large pool of skilled employees, service delivery infrastrructure, and supporting government policies.
This year, the Indian outsourcing industry is expected to benefit from a 4 percent forecast increase in global IT spending and the embrace of private and public cloud computing and mobile computing on a variety of devices and with a range of new apps. Emerging markets are expected to contribute half of all new spending.
Continuing its 14th consecutive month-over-month climb, IT employment added more than 3,000 jobs in February. According to a monthly index of IT jobs developed and published by TechServe Alliance, ITemployment stood at 3,998,500 jobs; reflecting incremental growth of 0.1 percent. On ayear-over-year basis, IT employment was up 4.3 percent.
"The strength in demand for highly skilled IT professionals is unmistakable," said Mark Roberts, CEO of TechServe Alliance. “During the last 14 months, we have added more than 180,000 IT jobs, bringing total IT employment close to the 4 million mark. The resurgence in demand has begun to create shortages in certain skill sets; a challenge employers have not had to deal with for some time.”
About 1.5 million of those jobs are in computer and design services, an increase of 29 percent over the previous month and a 3.4 percent increase over the year-ago quarter. Sequential and year-over-year declines were reported for jobs in both the data processing and hosting and telecommunications sectors.