Thursday, July 18, 2013

Employment of miners’ canaries as a share of the workforce

When I started to learn programming 30 years ago, almost all the packaged software in the world was U.S.-made. There were a few examples of “Euroware” such as 4D, à la fois brilliant and bizarre, that burned brightly but briefly. And now look: ten of the top 25 software companies by revenue are European, and lower down the ranking, the U.S.’ standing is, if anything, much worse: many of the large open-source firms with their much lower earnings per copy are either based in Europe or do much of their development there: MySQL before the Oracle takeover (Sweden) or InnoDB (Finland) or the main Linux distros (U.S.-based, largely European-programmed). And the farther you go from mass markets, the more dominant Europe becomes. In my field (Audiresys stands for “audience research systems”), it has made almost a clean sweep.

And that’s a problem, my fellow Americans, because most of our manufacturing has gone and it is not coming back and we have nothing to maintain us in the style to which we’ve become accustomed, as alimony-seeking divorcées used to say, but high tech. Aaaaand... the powerful narcotic painkiller that is our country’s unique status as issuer of the world’s reserve currency is starting to wear off. The Chinese workers and bosses who make almost all our consumer goods (a) want ever more money for their products as their standard of living rises, and (b) are increasingly less amused by the increasingly funny money we must use to pay much of the bill.

In addition to that drug, we take some others that dull the pain: the pervasive sense of exceptionalism that some of us will still believe in even when we cross paths with Turkey (which, in PPP GDP per capita, we probably will between 20 and 40 years from now), and the very large numbers of dollars and jobs that even inconsequential phenomena generate in our economy, still the world’s largest, for now. (Although in most contexts, these obfuscate more than they reveal, they remain pandemic and very hard to avoid; this tells you something about how people misuse data.)

To avoid the former bias, one has to look at other countries (duh) and their and our trends. To avoid the latter one, one has to eschew amounts and use percentages.

And when one does that, one finds statements like this:

UN Conference on Trade and Development, Information Economy Report, 2012, p. 21 (the ranking of software companies by revenues is from the same source, p. 26).

For people with less-than-perfect eyesight, 0.6% of all employed people in the U.S. work in “computer software and services”. Not just for export, mind you, where our position is even worse, but to serve our presumably huge domestic needs as well.  The only mostly industrialized country with a lower percentage is Russia. Even Costa Rica (0.8%) and South Africa (0.7%) do somewhat better than we. India has the same 0.6% as we do. Even with all the outsourcing, that boggles the mind.

I would be surprised if this weren’t based on a lot of error (for one thing, do these numbers include the vast amount of in-house development and computer services in companies with other primary activities? Apparently not), but I would also be surprised if it affected the U.S.’s number significantly disproportionately. We’re not that exceptional.

This is not to equate “computer software and services” with high tech generally. We produce a lot of high tech in which it is a modest component of the cost (pharmaceuticals, for example). But this field, whether it includes in-house employment or not, is the canaries in the mines. It is necessary for just about everything, especially other high tech. Thus, a low number of canaries indicates a low number of mines—or the use of other kinds of carbon monoxide detectors (you know, for’ners). As the UN agency says: “Boosting software employment not only helps to build up the software sector itself, it also has downstream multiplying effects. Moreover, jobs in software and IT services can help attract skilled young people”. We are going the other way.

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