IT Jobs Report: A Closer Look

While most sectors of the IT economy are on the rebound, employment isn't, according to a report issued Tuesday by the Commerce Department.

The number of workers in IT-producing industries has declined by 11.2% since 2000, compared with a drop of less than 2% in all private industries, according to Digital Economy 2003, the government's fourth such annual report. Workers in IT occupations totaled 5.9% of the overall workforce in 2002, 8% less than it did two years earlier.

Initially, the report says, IT job losses were concentrated among technology makers and low-skilled IT occupations, but recent losses have been widespread across almost all IT goods- and service-producing industries, and across all IT skills.

IT salaries have dropped, according to the report. Last year, the average annual wage for workers in the IT-producing industries fell 1.3%, to $67,440. Still, that was 85% higher than the $36,520 paid the average worker, who experienced a minute 1% pay increase last year.

After two years of retrenchment, IT-producing industries show signs of resuming the dynamic role they played from 1996 to 2000. "IT-producing industries are once again at the forefront of national economic growth and that, on average, industries and firms that have invested most heavily in IT equipment achieve faster productivity growth than those that do not," Commerce Secretary Donald Evans writes in an introduction to the report.

According to the report:

IT-producing industries, which supply about 8% of the gross domestic product, will contribute eight-tenths of a percentage point of the estimated 2.9% rate of real economic growth in 2003.

IT service firms, which lost jobs in the recession, grew at a moderate rate this year, as computer and semiconductor manufacturers, which suffered major losses two years ago, experiencing a rebound. Communications equipment makers, though, show continued weakness.

The use of IT in life-sciences research and development exemplifies the dynamic role IT can play in creating new economic opportunities. In bioinformatics, IT has expanded R&D horizons by letting life scientists acquire, manage, and analyze much larger amounts of and more complicated data.

The ebb and flow of IT spending and hiring, the report's authors say, can't obscure the immense and growing importance of IT in economic and other dimensions of social life. The digital revolution, they say, has altered relationships with information itself, with most people expecting that any information needed will be easily and almost instantly accessible. Thus, they say, more people conduct business online and companies are improving business processes through adoption of IT and Internet technologies.