The Productivity of Technology is in Jeopardy

The human resources future looks bleak for the IT industry. Why? Because of a lack of skilled labor. That’s right. Companies and governments are coming to grips with the impact of the demographic shift on their ability to attract and retain technological talent.

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A recent report by the Conference Board of Canada, written at the request of Bell Canada, the country’s largest telecommunications company, pointed out that a number of factors are at play: the aging population, declining birth rates, and retiring boomers. The most worrying trend of all, however, is the decline in enrollment in IT programs at the post-secondary level.

Major companies in Canada are so concerned by the situation that they have formed a coalition under the leadership of Bell Canada to rebuild the pool of skilled IT workers in Canada. I recently attended a presentation where a senior Bell Canada executive announced this initiative. He pointed out that this situation is not only prevalent in Canada, but is increasingly felt in all developing countries. He also noted that the impact on productivity is potentially enormous.

The failure to fill vacant IT positions in the next five years or so could cost up to $ 10 billion to the Canadian economy. Imagine the cost for larger economies such as Japan, the U.S., the U.K., and Germany.

Global Resources

Already we can hear the clarion call to encourage young students to enroll in IT programs and to increase immigration of skilled workers. The most advanced countries, Germany, the U.S., and the U.K., have already taken steps to encourage this type of immigration. The U.S. has long been the rich kid in this regard, because of the magnetic appeal of Silicon Valley for ambitious geeks from India, China, South Korea, the Arab world, Canada, and Europe. However, there are indications that the booming economies in India and China are leading their abundant youth to stay put.

Global competition for skilled labor will only exacerbate the costs of filling these positions. Because they came of age as the great dot-com bubble burst, kids just out of high school also realize that employment in the IT industry can be just as fickle as in any other. They would also rather apply their creativity as IT users than as IT creators. While immigration and university enrollment provide part of the solution, there is a need for a long-term fix.


I believe the fix starts and ends with the same approach that has always saved our economic hide in the past. Simply put, we have to make knowledge work, and particularly IT work, much more productive. We live in an era when, depending on the measure used, knowledge workers make up more than 50 % of the active population. As Alvin and Heidi Toffler point out in their book Revolutionary Wealth , even machine operators spend most of their time monitoring computers.

Our most productive industry of all, agriculture, is dominated by knowledge work, and that means farmers sitting in front of computers, manipulating data over wireless networks and communicating with tractors in the field by satellite link. The Associated Press reports that new technology—everything from self-serve information kiosks and self-serve checkout machines—has a major impact on productivity in the retail sector. In the U.S., this has translated to 4.5 million less jobs in retailing than if the technology had not been introduced.

These trends give an inkling of the productivity gains that are possible though information technology. However, someone has to program and maintain these computers and associated networks and applications. Unfortunately, so much of this work is still mired in mindless drudgery and woefully inefficient.

Moreover, end-users are still forced to wade through poorly designed and complex applications in order to carry out the most mundane tasks. While the IT industry has enabled massive productivity gains in other sectors of the monetary and non-monetary economies, we have yet to witness a concomitant increase in productivity in the IT sector.

We have to wonder how many IT and other knowledge workers would be freed up for more productive IT employment if we could get our collective act together on this. Let’s look at a few examples that illustrate the un-productivity of IT (both true stories):