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The Rising Importance Of Software And IT As Innovation Drivers – And Its Effects On The US Talent Pool

The Rising Importance of Software and IT as Innovation Drivers – And its Effects on the US Talent Pool

The world is now at the brink of the Fourth Industrial Revolution, whose key characteristics include the digitalization and integration of value chains, digitalization of product and service offerings, and digital business models and customer access. Just like during the previous three industrial revolutions, some will successfully capture the opportunities presented by new technologies, and some will fail to adapt and become obsolete. This time, the differentiator between the two groups, and the real driver of innovation, will be software and information technology.

“The advent of powerful microprocessors, memory chips, sensors, and digital control systems enabled new generations of devices to become ‘smarter’ and more responsive to their environment. Increasingly, improvements in product functionality could be achieved through better software alone,” write Lee Branstetter, Britta Glennon, and J. Bradford Jensen, who argue in their research that the rising importance of software and information technology as drivers of innovation and new product development across a wide range of industries led to a shortage in software/IT-related human capital within the US.

As the Fourth Industrial Revolution progresses, IT and, especially, software engineering capabilities will become even more central drivers of success in innovation, further increasing demand for IT and software engineering talent. The problem is that 46% of employers in the United States are currently struggling to fill open positions, and the shortage of talent is expected to become much worse in the near future, with an estimated 1.4 million unfilled computing and engineering positions by 2020.

“There is a mismatch between skills being taught in the U.S. and the labor pressure in the market. Psychology, history, and performing arts account for 22 percent of degrees earned in the U.S., but the corresponding professions don’t appear in any top rankings for labor demand,” Adam Wiedmer, sourcing director at Seven Step RPO, a professional services corporation providing recruitment outsourcing solutions, explains one cause of the problem. “Of the top majors granted in the U.S., only 5 percent fall within the high-demand areas of engineering and technology. Compare that number to India, where the number of technical enrollment is five times that amount.”

To bridge the IT skills gap, organizations must become comfortable with the idea of swimming outside their usual talent pools. Managed services providers (MSP) like Vology present a particularly attractive option how to bridge the IT skills gap because they provide instant access to a large team of fully trained and skilled experts, work to Service Level Agreements (SLAs), offer proactive support and maintenance, can leverage economies of scale, and charge a set monthly fee for core service provision, simplifying budget and cost management.

By establishing a partnership with an MSP, organizations can focus on what they do best while still driving innovation with their software and IT initiatives, which puts them in a favorable position and allows them to lead the Fourth Industrial Revolution.