Can you spare an application, Buddy?

It's now closing on Q2, 2002 and the Great IT Depression of 2001 is clearly still holding on. This could well become the Great IT Depression of 2001 to 2003.

What is going on?

Clearly the IT (information Technology) industry is not right, it is ill. There are a significant number of IT professionals still out of work. The rest of the ecomony is well on the way to normality, yet corporate IT spending is still dragging its ugly carcass along the bottom of the graph. This Corporate IT spending is what drives the industry. IT spending has bought industry it's ability to weather this recession fairly lightly. Corporate IT spending carried and then killed the DOT.COM's.

In the middle of 2001 (according to labor statistics) the IT work force was about 2.3 million people. The latest figures suggest that the work force has shrunk appreciable below the 2 million mark. These figures are calculated by counting the people both in and out of work that indicate some predilection for beating their heads on computer screens. The fact that this number has declined is both good and bad. It is good in the sense that market forces are at work and people are going off to find new professions, it is bad from the stand point that all the knowledge in those heads is going too, and what it means down the road.

If (it is an interesting 'if'), if the IT industry comes back then there are going to be some nasty surprises for companies that are late to the party. Labor wage rates in the IT industry have fallen dramatically of late (many jobs below either 40K/yr or $40/hr), with a smaller work force to pull from as the recovery starts, demand is soon going to cause those rates to explode. Explosions of any form are not good. Companies late to the party will find it difficult to hire people, either because there are no people to hire or because they are not willing to offer enough for the rapidly shrinking pool of potential employees.

Now I am certain the IT work force that was in place in early 2001 was not entirely the best work force that ever existed to service their masters, there being far too many people with little, or no experience, that were being paid way over the odds. These hangers-on of course were frequently managed by total failures that had been promoted out of the disasters they had created; promoted because in the tight labor markets that were the story of jobs market between 1999 and 2001, no company wanted to get rid of people they had only just hired.

If...

That 'if' again. What if the US corporate software development market never comes back? What if Corporate America decides that custom software written in Bombay is cheaper than that written downstairs? What if someone decides that the longhaired, be-jeaned prima-donnas in the IT department just aren't worth bothering with anymore? Are we looking at the start of the creation of a new Buggy Whip scenario? Could the Corporate programmer be on the way to extinction? And if this is the case what are we to do about it? This is not an industry that likes Unions, but software engineering is an industry we need. Could States and the IRS be persuaded to become more benign to the needs (or even proactive in supporting the needs) of fledgling software companies?