Are Information Technology's Glory Days Over?

Hugh Pickens writes "The NY Times reports that computer science students with the entrepreneurial spirit may want to look for a different major, because if Thomas M. Siebel, founder of Siebel Systems, is right, IT is a mature industry that will grow no faster than the larger economy, its glory days having ended in 2000. Addressing Stanford students in February as a guest of the engineering school, Siebel called attention to 20 sweet years from 1980 to 2000, when worldwide IT spending grew at a compounded annual growth rate of 17 percent. 'All you had to do was show up and not goof it up,' Siebel says. 'All ships were rising.' Since 2000, however, that rate has averaged only 3 percent. His explanation for the sharp decline is that 'the promise of the post-industrial society has been realized.' In Siebel's view, far larger opportunities are to be found in businesses that address needs in food, water, health care and energy. Though Silicon Valley was 'where the action was' when he finished graduate school, he says, 'if I were graduating today, I would get on a boat and I would get off in Shanghai.'"

Comments

Re:What would that do

[FooAtWFU]

I know an economist. He's noted, on a number of occasions, "Restrictions on trade are usually put in place by the rich and powerful, to benefit themselves at the expense of others." Restricting trade under the argument that the Chinese and Indians are willing to do it for a lower salary than people in your country? (Which is still, even today, extremely rich, and rather powerful...) Yeah, I'd say that's a "protectionist" move. If you want to make a case that "protectionism is good for the American economy" then that's one thing, but at least call a spade a spade, wouldya? Then, afterward, we can study the interaction of protectionism and the reality of the American and world economies, and see what the implications actually are, instead of spouting baseless partisan rhetoric at each other. How does that sound?

It's also really cute how you call anyone who will do the work for a low salary a "slave". Then when you tell them "you can't have this work!" you can imply that they're better off without it, back home in India working at the family fish farm. (... yes, I know this guy.) But Free the Slaves! Never mind that these people might conceivably be better off with these arrangements than the alternative, and that's why they're doing it, instead of whatever the alternative is. It's a great little accounting system: any material benefit experienced by these people just doesn't count! Also, any savings on salary experienced by people who use information technology doesn't count for anything either, because everyone in IT is paid by Evil Corporations and Evil Corporations face perfectly inelastic demand curves so they'll never lower their prices to the consumer at all, it'll all go to their profits, oh and by the way their profits are 110% owned by evil rich people and not by anyone investing for retirement at all ever; in fact, if one of these companies go bankrupt, everyone's 401k gets a free bonus deposit! Morally, all big companies are obligated to hire as many IT people as they can at as high a wage as possible!! Because it helps the economy!!1 </rant>

I also like how you indicate that countries like India and China are "too nationalistic to fall for [this kind of crap]" -- I find this amusing since when America recently had a bout of strong nationalism during the early George W Bush presidency, they ended up taking a whole lot of flak for it. Oh, the irony of being America.

Your anti-free-trade/globalization argument, that of pollution, is ironically one of the least applicable to the information technology industry. Information Technology does not "poison us and fill our air, water, and land with toxins". Shoddy manufacturing processes might, but whether the computer is built in the US or in China doesn't affect it much once it's installed and people are operating it. With regards to environmental issues, I can only propose to you that the sooner the Chinese and the Indians reach a level of wealth comparable to that available to the United States, they will find themselves with people who care about as much about the United States.

All that aside, though, you are right - it's still not that bad of advice to advise people to stay out of IT - at least if they have to pay for a $100,000 for their degree. Not that an inferior degree will land you a position in IT either. After all, as long as American idiots are overhyped on IT, companies might as well hire the guy who has the $100,000 nice degree instead of the El Cheapo Certification. But I think the real solution is for people to stop thinking an IT degree is worth paying $100k for, rather than just saying "omg free trade is horrible". Even if there's not competition in the job market, I am busy writing software to make IT administration easier (which means fewer of you needed to work on it).

And this is a good thing. IT is humble infrastructure work, like plumbing and roads. It's not an end in and of itself - it's there to help other people do meaningful things. Ideally, you don't want to be spending a lot of money on these things: you want them to be as cheap as possible while still helping people Get Things Done (California labor unions notwithstanding). Otherwise, it's a drag on society.