IT growth key to economic recovery

Although the country is polarized on many issues, most Americans would likely agree that a stronger economy benefits us all. Many sectors of the economy are growing, with initial reports placing 2012 GDP growth at 2.2 percent. But the country’s overall growth is still far below 4 percent, a rate generally considered strong. A Technology CEO Council (TCC) study concludes, and I concur, that companies that best leverage information technology (IT) will generate the most jobs and growth. To return to robust growth, U.S. businesses must be prepared to increase productivity, fuel innovation and leverage new staff and equipment. And to do that, they will turn to IT. However, there are three socio-economic conditions that, if left unchecked, can be a drag on this IT resurgence, but if fixed can accelerate long-term growth: Immigration policy, the cost of health care and the U.S. education system. Immigration policy The IT sector is suffering from a serious skills gap. Despite the high unemployment rate, IT managers can’t find citizens with the requisite technical skills. Yet we continue to send foreign-born, American-educated engineers, software developers, mathematicians and scientists back to their home countries after they graduate. In 2012, the quota for H-1B visas (which allow U.S. businesses to temporarily employ foreign workers in specialty occupations) was filled in less than three months. We need these science/technology/engineering/mathematics (STEM) educated professionals to meet the current demand for IT positions. It is with their contributions and talents that we can increase innovation and production, resulting in new jobs. The United States continues to fall behind other countries when it comes to qualified people to take STEM jobs, so we must rely on non-citizens who receive their education here to help us ignite growth through IT. Note that between 1995 and 2005, foreign-born entrepreneurs founded half of the firms in Silicon Valley, the center of U.S. technology innovation. Immigration reform is a hot topic in Washington. I hope our legislators finally act to update the antiquated quota system.

Health care expense Health care continues to be a national issue. Having overcome a constitutional challenge, the federal government is moving ahead with implementation of the Affordable Care Act (aka Obamacare), although the law will do little to actually make health care more affordable and competitive. Instead, I predict it will be a law of unintended consequences. While Obamacare will no doubt affect large businesses, those organizations have the staff and financial resources to better prepare and adapt to the law’s vagaries. It is the small-business sector – our economy’s primary job-creation engine – that will suffer the burden more. I can attest firsthand to the drain that the law’s Jan. 1, 2014, deadline is already making on our company’s resources. Add up the considerable staff time necessary to research, acquire and administer medical benefits and the negative impact to profitability is astounding. Small businesses that aren’t preparing this year will find themselves faltering next year. I predict that many entrepreneurs will intentionally cap their workforces at 49 people to dodge the act’s requirement of offering health insurance to payrolls of 50 or more. Small businesses don’t have pots of money set aside to cover additional health care premiums. That money will come from other budgets, such as investment in IT and new hires. Did Congress intend this law to thwart growth?

U.S. education system The need to reform immigration policy is a direct result of what’s lacking in the U.S. education system. Our young people continue to fall behind their counterparts in other countries, especially in science and math, the building blocks of future STEM careers. The Organization for Economic Cooperation and Development examines every three years the progress of 15-year-olds around the world in key areas of study. The 2009 rankings weren’t good for the United States, with our children placing 17th in science and 25th in math among 34 nations. This could have long-term consequences for U.S. global competitiveness and will make skilled IT workers even scarcer in the years ahead. No, not all high-school graduates should be expected to be software developers or research scientists, but we are doing them a disservice if they aren’t STEM-literate. What does that mean? Their education should prepare them to function in a knowledge-based workplace, analyze complex data and solve problems in a digital world. If not, we are only preparing them for minimum-wage, non-skilled jobs and not careers that will increase American competitiveness. Information technology will lead the economic recovery, but it won’t be easy as there are obstacles in the way. What’s unfortunate is that the obstacles are of our own doing. The reworking of immigration visas is perhaps the easiest to accomplish and there is hope that this will occur soon; but revamping our education system and true health care reform are long-term, complex socio-economic issues we keep avoiding at our own peril.

James Thompson is the CEO and president of The InSource Group, a technology staffing and placement company with an office in Fort Worth. He can be reached at