We're No. 1! But Not When it Comes to Jobs
Major players on the international technology scene think the United States has regained its No. 1 position as a driver of future revenue growth, after falling to third behind China and India just a year ago. But they're not so high on the Red, White and Blue when it comes to jobs. They ranked the U.S. market fourth in employment growth.
Apparently, being No. 1 in technology does not translate into being No. 1 in jobs. That's according to the annual Technology Industry Business Climate survey by KPMG LLP, the audit, tax and advisory firm. Those surveyed say that they see the U.S. market driving profits and anticipate continued investment in mergers and acquisitions, and emerging technologies. But they are less optimistic than they were a year ago about the growth overall in technology industry employment and the prospects of a national economic recovery.
Even though tech leaders this year predict that the U.S. also will have the industry's greatest percentage of research and development investment growth, followed by India and China, they don't see that as helping us out of our jobs slump. Highly skilled technology jobs will not do much to help the unemployment problems of the masses.
Still, "Technology executives clearly see a sustained recovery and a strong appetite for technology related purchases by U.S. companies and consumers, which helped raise the position of the U.S. market," says Gary Matuszak, partner, global chair and U.S. leader for KPMG's Technology, Communications & Entertainment practice. "Coupled with demand from emerging market countries, this combined opportunity bodes well for the industry.
"They also intend to take advantage of their strong liquidity and cash positions by investing in emerging technologies and new business models, like Cloud, and new products and services, as well as M&A to drive revenue," Matuszak adds.
So with all that anticipated investment and opportunity in the technology industry, why are the experts so ambivalent about America's jobs recovery? Many of the products being developed will likely be serviced and produced in emerging countries, like China and India, creating plenty of job opportunities overseas, but not so many here in the US.
Add that to the fact that more than 8 out of 10 technology executives believe that their companies will be involved in a merger or acquisition during the next two years. You know what mergers and acquisitions almost always mean to employees: layoffs.
There is a spot of good news, however: In the 2011 survey, 49 percent of the tech leaders see their companies' headcount increasing over the next year. In the 2010 survey, though, 72 percent of executives expected to have more employees over the next year, and it happened only in 42 percent of companies. Meanwhile, 21 percent of those surveyed said that the headcount would never return to pre-recession levels.
"The industry has seen the rise of many innovative companies in the past few years. However, this is somewhat tempered by an overhang of the U.S. downturn, as technology leaders now project the U.S. economic recovery to take hold in 2013 or beyond, indicating that full economic recovery remains at least two years away," said Matuszak. "There clearly is a continuing delay in their view of the U.S. economic recovery."
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