ICT employment slow to recover from recession: OECD

Peter Dinham
Tuesday, 24 November 2009 10:53

IT Industry - Market

Employment is continuing to drop in the ICT goods sector and remaining flat in most ICT services, while ICT services employment has been flat or increased slightly - by a mere one percent - in most countries, including Canada, Germany, Sweden and Chinese Taipei, according to a report on  the ICT industry by the OECD.

The OECD also found that employment in ICT manufacturing dropped by around six to seven percent year-on-year in most countries in the second quarter of 2009, and looking ahead the organisation says that ICT employment may be “slow to pull out of this recession as in the past.” During the last recession, the OECD said employment reached a peak in 2000-2001, bottomed out in 2003-2004 and only started growing again in 2005, “considerably later than the pick-up in production and value added.”

According to the OECD report, analysis of longer-term trends suggests that the ICT sector is becoming somewhat less employment-intensive, with the sector’s share of total business employment lower than its share of business value added, while “employment has tended to grow less rapidly than value added.”

The report also says that long-term indicators based on ICT occupations and ICT-related occupations across the whole economy, show a divergence between ICT specialists and ICT-related jobs. “ICT specialists have grown more rapidly (around 3-4% of total employment) than ICT-related intensive users (around 20%) suggesting that there is ongoing occupational specialisation as higher level ICT skills are required. Overall these indicators show the continuing growth of ICT specialists as a share of the total labour force, but a flattening out of the share of ICT-intensive users,” the OECD says.

In the introduction to its report, the OECD observes that with the deepening of this economic crisis, unemployment has risen rapidly and there is “mounting pressure on existing employment.”

“Employment in the ICT industry itself is around 5.5% of total business sector employment. Employment of ICT specialists (software engineers, IT technicians, etc.) across the whole economy is around 3-4% of total employment and up to 5% in some countries, and over 20% of total employment is taken up by intensive users of ICTs (office workers, professionals, etc.).

“Thus the share of employment in the ICT sector and in ICT-related areas is significant and the evolution of this employment deserves attention in the current recession and recovery. Despite forward-looking indicators showing stronger signs of recovery in most of the OECD economies (OECD Composite Leading Indicators, 11 September 2009), unemployment is expected to continue rising for some time. This follows the usual business cycle pattern of unemployment lagging declines in output.”