Engineering, computer science
degrees drop since mid-'80s

By Rory J. O'Connor
Mercury News Washington Bureau

WASHINGTON, DC - The number of undergraduates earning computer science, engineering and other technical degrees has been dropping precipitously since the mid-1980s, despite the nation's transition to an information economy.

Degrees awarded by U.S. colleges and universities in computer science fell 42 percent from 1986 -- the peak year -- to 1994, the latest year available, while engineering degrees awarded dropped 18 percent, according to the U.S. Department of Education.

The sharp drop in technically trained graduates is a major reason why at least one in every 10 technology-related jobs available in the United States goes begging, according to a report released Tuesday by a computer industry group.

Coupled with a boom in demand for skilled high-tech workers, thanks to technologies like the Internet, the nationwide shortage only stands to worsen, threatening the growth of an industry that accounts for about a sixth of the nation's economy, the group believes.

``There is a dramatic problem in finding skilled (information technology) workers,'' said Harris Miller, president of the Information Technology Association of America, based in Arlington, Va. ``There are at least 190,000 vacancies in our industry today for IT workers, and the number could grow very rapidly.''

According to the trade group, a continuing shortage of properly trained workers could prompt U.S. companies to farm out skilled and high-wage work to countries like India or Ireland that have developed national programs to train workers in high-tech skills. American high-tech companies might also have to scale back expansion plans in the face of the labor shortage, according to the ITAA.

The labor shortage also stands to hurt companies in other industries and the government because they all depend on computer systems to function and are forced to compete for the same programmers, network specialists and information system managers. Those jobs are in addition to the ones counted in the report, entitled ``Help Wanted: the IT Workforce Gap at the Dawn of a New Century.''

One reason for the shortfall is that the number of computer science graduates from U.S. universities has declined from its mid-1980s peak.

In Silicon Valley, where many companies have a huge number of openings for properly trained technical personnel, the situation at the college level is less severe than the nationwide figures suggest. Local colleges graduate more students in engineering than do other regions of the country, and an increasing number of students appear to be attracted to technical fields.

While at a loss to explain why the national levels skidded, Miller placed some of the blame on schools for not properly training children in math and science. But the problem is not just supply; it is also demand. A major contributor to the shortage is the explosive growth of the computer industry, especially the part of it related to the Internet. Last year, some 1.1 million Internet-related jobs were created in the country, Miller said.

The decline in computer science degrees mirrors similar trends in undergraduate degrees awarded in mathematics, engineering and the sciences. Only 12 percent of college graduates in 1994 were granted degrees in technical fields, according to U.S. Department of Education statistics.

Most college students have majored in fields like education, business management and social sciences, which along with liberal arts accounted for 45 percent of the bachelor's degrees in 1994. More students were awarded degrees in visual and performing arts or psychology than computer science, and nearly as many students majored in what the Education Department calls ``Protective Services.''

But those statistics might be misleading, according to Frank Balz, vice president for research and policy analysis at the National Association of Independent Colleges and Universities.

For example, the number of master's degrees in computer science has grown sharply in the past decade. And many students majoring in seemingly non-technical disciplines are taking computer courses and gaining considerable experience with modern technology.

Dire predictions about a computer-industry labor shortage are not new. In the 1960s, some experts predicted that every U.S. worker would need to be a computer programmer by the turn of the century to keep up with projected demand. But vast improvements in technology -- such as the ability to program more simply -- rendered that prediction obsolete.

The shortage was also used last year by the computer industry to persuade Congress not to tighten restrictions on legal immigrants with high-tech skills. The claim was met with criticism by some engineers' organizations, which said the industry was hiring cheaper workers overseas instead of retraining thousands of highly paid older engineers laid off from defense contractors.

And while 97 percent of computer companies provide worker training, according to the report, two-thirds of the firms spend less than $100,000 per year on training. In part, that's because training workers often backfires on a company, the report said.

A company must usually pay workers much higher wages once they learn the new skills, and then they become prime targets for competitors to hire away.

The report also insists that retraining alone can't be expected to fill the gaps because too few unemployed workers have sufficient background to qualify for training.

Miller said that no simple or quick solutions are apparent. ``The challenge is so fundamental it will take a united effort by government at all levels, education at all levels, and industry to find appropriate long-term solutions,'' Miller said.

Backed by several members of Congress, the ITAA called for a national study of the problem, additional spending on education, more emphasis on technology in schools, and increased public/private partnerships to train workers.

``I view (the report) as a clarion call for Congress to take action,'' said Sen. John Warner, R-Va., co-chairman of the Senate information caucus. ``We must re-examine the means by which we take the American taxpayer's dollar and give it to education. This says to me, Uncle Sam, you're not spending these dollars right.''

But he said the report underscores the need for a more active partnership among universities, industry and the government.

Balz suggested the report should push the industry itself to put more resources-- read money -- into higher education.

``Corporate philanthropy has decreased in recent years, so I think there's a lot of room for improvement,'' he said.

EXECUTIVE SUMMARY

This report is available in its entirety by sending an email to Amy Callahan at acallahan@itaa.org with "IT Workforce Study" as the subject of your message. Please enclose your Name, Title, Company, Address, Phone and Fax where applicable.

The rapid advance of technology, the rise of the Internet, and the overall growth of the economy has created severe problems for companies seeking skilled information technology (IT) workers. A study by the Information Technology Association of America (ITAA) extensively surveyed large and mid-size IT and non-IT companies throughout the United States and found:

* The number of unfilled positions for IT employees at large and mid-size U.S. companies is approximately 190,000 nationwide. This can be considered a conservative estimate of the gap between companies' growth needs and the current availability of IT workers because the survey did not include small companies, non-profit organizations, or federal, state, and local governmental agencies and include their need for IT workers.

* At large and mid-size IT companies, one IT position is vacant for approximately every 10 IT employees working at these companies.

* Eighty-two percent of large and mid-size IT companies expect to increase the number of IT workers they employ. Only 2 percent expect to reduce their IT workforce. The findings are similar for non-IT companies.

* Seventy-one percent of companies believe the demand for IT workers is higher than for other skilled/trained workers.

* Sixty-eight percent of IT companies cite a lack of skilled/trained workers as a barrier to their companies' future ability to grow.

* Increased recruiting and training efforts are at best partial solutions to the current problems companies face in finding and retaining skilled IT workers. One-third of IT companies engage in full-time recruiting to fill IT positions at their companies, and U.S. companies overall spend billions on training their workers.

* Education will be a key facet of any solution to this problem. However, universities are not doing an adequate job currently in graduating students in sufficient numbers. From 1986 to 1994, the number of bachelor degrees in computer science awarded annually at U.S. universities fell by 43 percent (from 42,195 to 24,200). In addition, the skill level of those who graduate is a major source of concern for companies. Sixty-nine percent of IT companies say only "few" or "some" of applicants for their IT jobs possess the skills the companies are seeking.

The consequences of the current situation are:

* In the absence of sufficient IT workers we can expect to see slower growth in the IT industry and in non-IT companies that need such workers than we would have seen otherwise.

* As companies scale back their plans for growth and make related adjustments, we can anticipate slower job growth and less wealth creation than we would have seen.

* Slower than anticipated growth and less innovation ultimately will affect both the supply and quality of information technology goods and services Americans can enjoy and that other U.S. companies can use to increase the productive capacity in their own industries.

* We will see an increased use of outsourcing IT work to companies overseas as a partial solution to the problem of unfilled IT positions here in the United States.

* We can anticipate further increases in the salaries of IT workers. At a certain level, in a global market, U.S. companies risk their profitability if they must pay individuals premiums beyond that which customers are willing to pay for the product or service those employees produce. Increases in labor costs not matched by increases in productivity but caused instead by an inadequate supply of labor can make it difficult or impossible for a company to compete. The problems demonstrated are not confined to Silicon Valley firms, nor can we anticipate any quick resolution of this problem in the immediate future.

The purpose of this study is to explore the dimensions of a problem -- the lack of skilled IT workers in America -- and determine whether that problem is real. The evidence is clear that the problem is indeed both real and serious. It leads to at least one overarching conclusion:

American schools and universities are not producing a sufficient number of students skilled in information technology to meet the needs of U.S. companies. This sets a challenge for those who believe technology and growth can increase prosperity.