Dan Lyons has a sobering outlook on the future of the American IT industry over at Newsweek. The article argues that the Government’s focus on bailing out weaker industries is occurring at the expense of relatively strong industries such as IT. Dan argues that a lack of investment in maintaining domestic IT talent could have serious implications in the future. Dan writes:
“…unless we boost government spending on science, technology, engineering and math—STEM, in industry jargon—we will be unable to keep up with countries like China and India. At some point, companies such as Apple, Cisco, HP, IBM, Microsoft and Oracle could be eclipsed by foreign rivals, just as Ford, General Motors and Chrysler have been.”
Could American IT vendors face the same fate as American auto makers? I’m not sure that the analogy holds. American auto makers all but ignored the competitive threat from foreign rivals. On the other hand, American IT vendors have made significant investments in growth geographies in order to establish a foothold with customers in these markets and take advantage of local skills. One could argue that the investments in India and China by large American IT vendors will help create future competition to American IT vendors. By that logic, Google is creating its future competition by hiring and creating teams of bright programmers. The history of employees leaving IT firms to start competitive or adjacent ventures is long and storied.
To the broader question about training STEM students, I absolutely think it’s important. However, can America expect to graduate more STEM students than India or China in the long run? So the real question is how can American IT vendors best leverage local and international skills? And in doing so, can America’s IT vendors retain their leadership position? To the first question, I’d argue that this is exactly what American IT vendors are doing today with their hiring in growth geographies. The answer to the second question remains much more open.
What do you think?