CHAPTER 10 Information Technology “There Is a Real Need for Engineers in This State
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Chapter | 10 Information Technology ❖ Can Texas take information technology to a newly disruptive level? global leader in making and designing “The semiconductor Introduction the tiny semiconductor chips that run industry drives a Information technology (IT) in modern computers and electronic devices. $3 trillion economy the workplace has transformed the way But semiconductor companies have been corporations operate in the global market shrinking their workforces in the Lone in electronics. And and has allowed small businesses access to Star State. And a shrinking workforce in that [semiconductor] markets outside their traditional operating such a foundational industry has Powers concerned about the future of the Texas sector drives areas. The ability to store, protect, process, transmit and retrieve information easily economy. “If we lose this talented and nanotechnology and and inexpensively will remain critical to skilled workforce they might not come is driving all kinds all industries as even small businesses “go back — unless we can find new jobs for global.” them in the new economy.” of things smaller. If Texas continues to grow its total we lose this talented number of IT jobs, but that growth is | What’s Happening and skilled workforce being challenged. The state’s foundation of universities, business-support organizations Structural changes are affecting they might not come and existing companies will draw the companies in Texas that make back — unless we tech-design firms and tech-design jobs semiconductors, computers, electronic can find new jobs of the future. Yet that path is threatened products and even audiovisual equipment. by an erosion of jobs in the cornerstone Using newer fabrication plants in Asia with for them in the new semiconductor industry, a constrained less-expensive labor has shifted some work economy.” education system and limited access to overseas. And a tough economy in the capital. United States has resulted in less demand Texas has lost more than 24,000 jobs in here and, thus, less demand for workers at the semiconductor manufacturing sector the Texas facilities of those companies. — Pike Powers, Texas since the peak year of 2001. This concerns Emblematic of the state’s IT cluster is attorney and economic many Texans who aren’t convinced that Texas Instruments (TI), a global leader in advisor dozens of new IT start-up companies, semiconductor microchip manufacturing. each employing only a few people, will TI’s microchips run in everything from be enough to pull Texas into the “new electric toothbrushes to automobiles to economy.” cell phones. TI is trying to broaden its “The semiconductor industry drives product line outside the traditional digital a $3 trillion economy in electronics. microchips used in cell phones and other And that [semiconductor] sector drives digital devices for which TI is best known. nanotechnology and is driving all kinds of But such diversification requires talent and things smaller,” said Austin attorney Pike access to new customers. Powers, who has been involved in growing TI has been looking in 2009 and 2010 tech companies in Texas for decades. to hire technicians for its Dallas microchip According to Powers, Texas has been a fabrication plants. “Our revenues are 70 | CHAPTER 10 Information Technology “There is a real need for engineers in this state. We would like to see the number of electrical engineers coming out of our universities doubled,” Mayes said. “We need to grow more worker talent. We need more Tier 1 research universities. And we need more research.” — Gray Mayes, Texas Instruments up, and our orders have been up since customers, partners and fabrication plant May 2009. There was a lot of pent-up workers is critical for quality control and demand from our customers over the past relationship development with the original “We’ve got a year. So we’re hiring,” said Gray Mayes, equipment manufacturers that use TI great competitive director of government relations for Texas microchips. Balancing face-to-face contact advantage because Instruments. “We are struggling to hire with customer locations is challenging, technicians in our fabs [fabrication plants]. especially when 90% of those customers we’ve got a great We’re bringing in more contractors.” have their engineers and OEM (original foundation from equipment manufacturing) plants outside And hiring technicians with skills and these big tech experience in microchip production isn’t the United States. “It would help if we had TI’s only concern. A core issue for the direct flights to China from Texas,” Mayes companies. We have Dallas-based company is getting a steady said. great employers like stream of workers with a Master’s degree Cornerstone companies such as TI, as Texas Instruments, in electrical engineering — a challenge in well as AT&T, Dell, and EDS (Electronic Texas. Data Systems, now known as HP AT&T, Dell and “There is a real need for engineers in Enterprise Services), are critical because others that attract they attract other tech companies, and even this state. We would like to see the number great companies to of electrical engineers coming out of our their former employees tend to start up universities doubled,” Mayes said. “We new tech companies, said Skip Moore, lead Texas that want to do need to grow more worker talent. We need partner of the regional technology, media business with them. more Tier 1 research universities. And we and telecommunications practice at the need more research.” Dallas office of Deloitte & Touche LLP. And from that we SEMATECH, a multicompany research To encourage talent development, the have attracted a lot consortium headquartered in Austin, has TI Foundation is supporting programs to been a major contributor to building the IT of good people here. test and train more high school and junior cluster in Texas. That is the underlying high teachers of math and science. The organization hopes that such programs will “We’ve got a great competitive core value.” spur more teenagers to consider going to advantage because we’ve got a great foundation from these big tech companies,” college to study science and engineering — — Skip Moore, Deloitte & and eventually help the company create and Moore said. “We have great employers like Touche LLP build future products in Texas. Texas Instruments, AT&T, Dell and others that attract great companies to Texas that TI has been trying to keep as much want to do business with them. And from production as possible in the United States that we have attracted a lot of good people and in Texas, Mayes said. But face-to- here. That is the underlying core value.” face contact between TI engineers and its CHAPTER 10 | 71 High-Demand Occupations in Texas Occupations Number of Jobs in 2006 Growth Through 2016 Computer system analyst 43,850 36% Computer support specialist 42,950 20% Database administrator 10,400 34% Computer software system engineer 31,150 30% Computer software application engineer 30,900 46% Network and computer system administrator 25,250 33% Network system and data communications analyst 17,750 56% Electronic engineering technician 15,850 14% Computer and office machinery repairer 15,150 14% Electrical engineer 14,300 14% SOURCE Texas Workforce Commission Labor Market and Career Information Department. Table 10.1 Still, Moore has seen many big fields (e.g., a 4% loss in the number of technology employers in Texas shift work semiconductor jobs and a 22% loss in the to Southeast Asia. number of computer products jobs in that “Even some software development jobs four-year period). have gone to India and China. But the • Modest job growth (7%) occurred in data high-end jobs in companies have stayed centers and gaming sector companies. here,” Moore said. “It’s the innovation • Jobs increased in software programming part of all this that is really critical. and other high-tech design companies Innovation is going to be around software along with a strong increase in the and communications and microchips. You number of those companies (e.g., 39% can’t just move all innovation to India and growth in the number of jobs at computer China. The jobs are going to be where the consulting and software programming innovation is happening.” companies). But Moore and other IT industry leaders These trends affect the Texas economy share concerns about future workers who because manufacturing companies are now in the Texas education system. are exporters. Makers of computers, According to these business professionals, semiconductors and electronics equipment schools, including junior high, high school exported $32.1 billion of their goods in and college, are constrained and are not 2009, making that sector second only turning out enough young people with an to chemical makers as the largest Texas interest in engineering, much less a degree exporter. And export sales directly grow the in engineering. Texas and local economies. But aside from vertical industries, IT- | The Data related occupations have shown growth in Texas across the industrial spectrum. The world of IT is dynamic. Looking According to the Texas Workforce at vertical industry employment statewide Commission’s Labor Market and Career from first quarter 2005 to first quarter 2009 Information department, 10 IT-related shows the following highlights: occupations are in high demand and are • Jobs were lost in technology equipment expected to remain vigorous through 2016 manufacturing and related production (see Table 10.1). 72 | CHAPTER 10 solid business plans have been looking | So What? for money. But Texas has fewer than 20 The year 2009 proved difficult, even venture capital firms actively investing, for those with established IT skills. Major and they invest in only four or five tech IT consulting firms were shedding workers companies a year — the past normal rate of as their Fortune 1000 clients held off on investing.