Where have all the IT students gone?
The other week I went back to uni to give an introductory presentation on Agile Software Development in an IT related course. From experience I knew that it was quite difficult to attract an audience of students to listen to a presentation from a guest presenter, especially since most of the content in the presentation would not be assesssable. So I informed the course coordinator that I would be bringing the recruiter from ThoughtWorks along so students can find out more about the job opportunities available. This worked out quite well given it was Careers Week at the University of Sydney.
I used to be involved in this particular course about two years ago, and at that time there were 250 students in the course. I had assumed that there would be as many students in the course this time around, and had convinced the recuiter that it would be worth her time to come along and speak to students that have an interest in an IT related career.
To my surprise there were no more than thirty students sitting in the lecture theatre, and this was a good turn out, as there were only about forty students enrolled in the course. So over the space of two years, enrollments in this course have reduced by roughly 80%! Furthermore, first year enrolments have dropped to only forty students across all Electrical, Computer, Software, Power, and Telecommunications degrees. So it begs the question, why aren’t students interested in an IT career anymore? Is this a lag effect from the Tech Wreck of 2002? It is hard not to link a decrease in enrolments to a lagging fallout from the dotcom bubble.
Year 12 leavers have probably been cautioned by their parents and older siblings that got burnt during the Dot Com bubble that a career in IT is not a lucrative or safe career. They could not be further from the truth. There is so much work out there that most companies are trying very hard to ramp up their IT business units. Technology is so much more ubiquitous today than it was 5 years ago, and it will only increase over the coming years. Businesses will always need to rely on technology going forward as consumers have become accustomed to buying books and Segways online. Consumers and businesses today have a greater dependency on technology that there will always be a demand for people to staff IT related projects.
There is the concern that many IT projects in Australia are heading overseas to countries like India where labour is cheaper by comparison. The potential cost savings in offshoring an IT project is very tempting for many CIOs, and so many jobs are being lost to offshoring. However, there are a few switched on CIOs that are realising that offshoring IT projects is not the answer to delivering value to the business. The reason is that these projects are locked into the Waterfall model where all the specifications and design documents are drawn up in Australia, then shipped to India for development. Many of these projects fail when it comes to testing in the later stages, and projects run over time to address these defects, and costs blow out as a result. So the business doesn’t realise any value from these projects for up to two years, and the longer these projects get drawn out the greater the risk that the project becomes out of sync with the needs of the business. This would mean either scrapping the project or throwing more money at it to address changing requirements, both of these options are incredibly painful for any CIO to make.
As I mentioned before there are a few CIOs that are realising that offshoring is not the cost effective strategy that they first thought it would be. They are now looking into new ways of delivering IT projects, and are becoming very interested in Agile and Lean. Both methodologies allow the business to eliminate waste and reduce costs, and business value is realised earlier through shorter development cycles. Agile in particular works well when the development team works closely with the business, ideally in the same office, which means Agile projects are more successful when staffed by local developers. So over the next few years you’ll see a lot of work returning to Australia as businesses adopt a different approach to developing custom software solutions, as oppose to using a flawed methodology staffed by cheap offshore labour.
If I were a CIO working on a five year strategy I would definitely be looking at the state of the IT labour market, and the number of IT students coming through uni. I would be very concerned of a skills shortage in the coming years, especially when there are so few students that want to study IT courses at Universities.
Eventually the fundamental rules of economics will kick in when there is a high demand for local IT projects and a shortage of skilled professionals. This is good news for current IT professionals, as it would mean higher wages. Conversely this is bad for CIOs, as it would mean higher costs for the business to finance local projects, and a greater tendency to revert back to the offshore model of delivering software.
All this makes for an interesting conversation over a few schooners of beer, but the message needs to get out there: IT is back baby!
Didn’t think you’d be so quick to get back to USYD Nick! Good to see you reimbursed the recruiters time with a few schooies though.
Nice post, but do you really think the IT sector will ever reach the same lucrative glory as it had done previously? Either way, as you say, the field does seem to have stabilised a lot recently which can only be a good thing.
What the heck is a CIO anyway?
Ben
10 Apr 07 at 11:53 am
Hey Bennett, I think we’ll be seeing some organic growth in the industry from now on. I doubt we’ll see venture capitalists throwing wads of cash around like they used to, so the industry won’t get overly stimulated in the short term.
PS. CIO = Chief Information Officer.
Nick
10 Apr 07 at 1:41 pm
I think we’ll see venture capitalists throwing wads of cash at Cibby.
Cibbuano
11 Apr 07 at 9:53 am
Bubbles come and go, remember the tech bubble before last.
That was the PC tech bubble, with companies like Lotus Software and Ashton-Tate.
http://en.wikipedia.org/wiki/Ashton-Tate
http://en.wikipedia.org/wiki/Lotus_Software
During the mid 80’s stock market boom, a number of sectors boomed in turn, like Bio-Tech etc.
Gnoll110
18 Apr 07 at 3:09 pm
Agree absolutely NIck, and I know this is something we have spoken about at-length in the past. Gnoll (above poster) is right, that booms come and go. Every 10-15 years or so there is a boom-bust cycle in Silicon Valley. Every time, just after the very bottom of the crash, some major magazine like BusinessWeek or Time runs with a front-page cover along the lines of “The Death of Silicon Valley?” [1,2]. Every time, like the mythical Phoenix rising from the ashes, the valley picks itself up, rebuilds and re-invents itself.
I think the same thing has occured here. I’m a few years older than you, which meant I went through my undergrad at USYD in the late 1990’s. This was the tail-end of the “glory days” of computing, back when the (now) School of Information Technologies was (rightly) called the “Basser Department of Computer Science” and when the School of Electrical Engineering actually did some!
It was a heady time to be in software. As soon as I graduated (finished in 1997) I picked up work with a well-known global consulting company. When I decided (very quickly) that I didn’t like the “billable hours” school-bus culture, moving out into a more focused technical job (software engineering for a military flight simulator in my case) was pretty simple. There were plenty of good and interesting jobs available. From there, I left along with the guy I shared an office with (hi Steve! – now at Atlassian) to start a start-up with 2 other guys (one who was the best man at my wedding – so friends _are_ more important than business it seems!) Everyone was doing startups, even in Australia it was relatively easy to raise capital, and we pulled $800k seed funding from a well-known CEO of a successful local listed company. Our startup, like many others, did eventually wind up (well, almost – that’s another story) but we emerged much the wiser and more experienced for having had the chance to build a real IT venture from the ground up. We didn’t do everything right (obviously!) but we did do many things right, or at least we avoided doing things wrong – like burning cash on Herman Miller chairs or 30 second adds at the Superbowl, etc. Was I “afraid” at the end of the startup, during the crash? Did I think the world was going to end? No way. I knew it would be back – and right now I think it just about is.
So, what happened next? I agree with you. I think that basically the parents panicked. They saw the newspaper articles predicting “IT bust”. They saw the fizzle-out of Boom 1.0. They got worried for their kids futures because someone told them all programming was being sent to India and there was no future in IT. I personally saw the effects of this, first-hand, when I taught at USYD from 2003-2006. I remember in one of the early EBUS units (a 3rd year course comprised of students who had enrolled for 1st and 2nd years while the “boom” was still going strong) we had 297 students enrolled. That’s right, I taught 297 students Perl, PostgreSQL, Apache, DBI and Mason. (G-d forgive me for my sins!) Fast forward a few years, and class sizes had dropped well below 100. I don’t think this was a reflection on my teaching, as course surveys were always pretty good, and the anecdotal comparisons between my enrolments and certain other courses were pretty startling.
So what changed? By the time the 2006 students were hitting 3rd and 4th year subjects, they had enrolled around 2003, or post-boom, in the bust phases. I have no doubt that many of them were deterred from enrolling in IT careers due to parental and other influences. Even the ones who were enrolled were frequently despondent that there was “no future in IT”. I could see them lift as I told them, honestly, that nothing could be further from the truth.
Nick is exactly right. There is going to be huge demand as CIOs of major organisations bring critical strategic software projects back in-house as they can no longer tolerate the (high) risk (and associated strategic “opportunity cost”) of software project failure associated with off-shoring to a cubeland development centre that follows traditional (read: non-agile) development practices. As anyone who’s ever worked on a real software application would attest, it’s hard enough to clear communication channels, get common understandings, and build a successful product on-time and on-budget even when everyone IS in the same room, never mind when your coders are located thousands of kilometres from your business analysts, and most importantly, the customer and end-user. Not a recipe for success.
So what do we take from this? I guess there are a few points I’d like to make in summary (I have never been known for my brevity!): (1) software development as a business activity is not going away any-time soon, (2) there is already a large unmet demand for talented software developers and this is set to continue, (3) this demand is unlikely to be met anytime soon from the students coming out of software courses at university – (i) because their numbers are not that high, but (ii) more importantly, because the majority of them are nowhere near as skilled as their counterparts of a decade ago who make up the bulk of current professional software developers / consultants / engineers today, and (4) as a result of high demand and low supply, one would expect the time-tested laws of economics to swing into play yet again, with salaries for genuinely talented people hitting well into the high $100k’s and beyond.
There is one more question that needs to be asked. If all those students didn’t go into software, then where did they go? I think a mixture of places: some went into “medicine”, often via the round-about path of medical science, etc which took many of them (ironically) into the currently far riskier area of bio-tech startups (surely at least as scary a prospect for their parents as any IT job), some went into accounting and business (and the smart ones are presumably bored witless by running endless “reconciliation reports” and “accruals” by now. Some others went into the supposedly “safe” area of the law. It’s just amazing how many law grads are pouring out of universities right now. I predict that corner-store legal services will be less than $30 per hour in 5 years! Again, supply and demand in action.
So for all those who predicted the death of IT (in Australia or abroad), I can only suggest they cast their eyes over the immortal words once penned by Mark Twain in the face of a similar situation;
“The reports of my death have been greatly exaggerated”.
– Dave
[1] http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2004/01/25/INGFT4CVEU1.DTL
[2] http://www.itweek.co.uk/personal-computer-world/analysis/2046179/silicon-valley-back-track
David Peterson
3 May 07 at 10:58 pm
[...] alma mater Sydney Uni, my good friend Nick Carroll has recently asked the important question “where have all the IT students gone?” It’s a very good question, and I was drawn to comment on his posting. My plan at a few [...]
Random walker » Blog Archive » Boom 2.0 - IT is back!
3 May 07 at 11:45 pm