Rumors of the death of IT jobs have been greatly exaggerated

I was in India recently on a personal visit  and had a chance to witness first hand the boom in IT and BPO jobs.  There was a buzz similar to ones I had felt in Silicon Valley in the 90's and to the ones folks say they feel in China.  I am happy that globalization and technology has bought an economic lifeline for India.  However dear readers (especially my American IT brethren) fret not for your IT jobs and please don't dissuade your children from thinking of IT as an option.  The cold hard facts of economic data don't support the hot air of technology Pandora's and trade unionists.

NASSCOM (the trade association of IT companies in India whose sole goal is to trump up the size of the industry to curry better favor from the government) claims that Indian IT software and services exports were $12 Billion in 2003-2004.  They expect that the BPO and IT sector will grow to $62 Billion by 2008/2009.  This is their "most optimistic" estimate however let us take it as fact.  Now let us make an adjustment to this number - since most people who outsource to India do so for a cost advantage, let us assume that people get a 3x advantage by outsourcing to India.  This is again a very agressive estimate since very few people get a 66% reduction in cost after they take into account communication and travel costs.  Even with that assumption, we only get a economic total of $186 Billion dollars .  While this is a big number for most of us, it is not a big number in the context of the American economy. 

The US economy is around 11 Trillion dollars growing at 2-3% a year.  Assuming 2% growth, the US is creating $220 Billion of economic value every year.  In 5 years by growth alone the US is going to create a Trillion dollars in economic value.  Even if all of India's outsourcing growth came from the US it would still be only 20% of the economic growth the US has created and less than 1% of the US GDP. 

The real challenge to all jobs is productivity.  Rather than worrying about red herrings such as India and China, we need to figure out how we can constantly upgrade our role in the value chain and make ourselves more productive.  I predict we will create 50% more IT jobs by 2009