As noted by QFinance “Information technology (IT) is both a huge industry in itself and the source of dramatic changes in business practices in all other sectors. The term IT covers a number of related disciplines and areas, from semiconductor design and production through hardware manufacture (mainframes, servers, PCs, and mobile devices), to software, data storage, backup and retrieval, networking, and, of course, the internet.”

The incorporation of new digital technologies into all sectors of the U.S. has created substantial new demand for expertise in software development, the management of computer and information systems, technical support services, and the manufacturing of high-tech gear. As of 2011, there were approximately five million jobs in the core IT industry in the U.S. IT firms provide telecom services, IT hardware, IT services, and software. As a result of the slow growth of the global economy in 2013 the IT industry is expected to grow by only three percent. The global IT industry market reached $3.6 trilliion in 2012, with the U.S. representing more than $950 billion. The IT industry also employs approximately five million workers in technical and non-technical positions and 4.16 million in business IT departments (CompTIA, 2013).

In 2014 it is estimated that there will be over 100 million knowledge workers in the U.S. (Infotrends, 2011).  Knowledge workers are also called “symbolic workers,” as they use very little physical or mechanical labor. Unlike their industrial counterparts, knowledge workers spend their time at work manipulating information rather than machines. An increase in knowledge workers has led to a decline in other sectors of the economy, such as service and labor-intensive jobs.

The flip side of increased demand for high-tech workers is the decreased demand for workers in industries where computers and other high-tech devices have replaced tasks that used to be performed by people. Workers have also lost jobs in industries or firms that have been unable to adopt new information technologies as effectively as industries or other firms that offer comparable products or services.

Many of the workers who lose jobs in declining firms or industries lack the education or training to take up jobs in the high-tech sector. A person who spent 30 years in a steel plant that is shutting down may not be equipped to work for many of the industries that are adding jobs as our economy transforms itself. State governments and the federal government offer programs designed to help workers acquire the training and education needed to make the transition from declining to growing sectors of our economy, but the record of these programs has been mixed.

Unfortunately, many firms in the industries that are succeeding also have a bias in their hiring practices toward younger workers. They may believe that younger workers are more flexible and more easily trained than older workers, and they may undervalue the importance of experience and maturity.

The IT-driven cycle of job creation and job destruction can be seen in almost every sector of the new, knowledge-based economy. The automation of assembly lines has reduced jobs in manufacturing, for example, but it has created new jobs in robotics technology and computer engineering. The introduction of computers has reduced the need for many kinds of clerical work in offices, but it has also created a new demand for computer designers, software writers, computer system managers, service personnel, and data entry workers.

Next: Financial Markets