As I See It: What's Past Is Prologue
Published: December 10, 2007
by Victor Rozek
Just beyond the holiday season lurks 2008, carrying the prospects of a fresh start and the baggage of past performance. New years are like that; full of hope and promise, but tempered by what went on the year before. For IT professionals, 2008 will be shaped by the confluence of powerful forces themselves molded by the recent past. The most critical of those forces, as always, is the economy, and how it will fare depends on who you believe.
I've consulted the psychic hot line, and reshuffled the Tarot cards, but the future is still a bit murky. So to find the definitive answer, I turned to that specialized group of financial tea-leaf readers otherwise known as economists. Economists, after all, are fortune tellers with advanced degrees. And while they all sound convincing, few can afford to be fully objective, since they are primarily employed by financial institutions and government agencies that have reasons to spin the data.
But like fortune tellers, if enough economists make enough prognostications, some percentage are bound to be right. For 2008, the range of predictions runs from dire recession to a modest 2.7 percent growth rate with 4.9 percent unemployment. The latter are the figures quoted by the White House economist, Edward Lazear, who bases his forecast on a freakishly strong third quarter and the fervent hope that the collapsing housing market will not put a terminal kibosh on lending institutions. But, before we get too excited, remember we're headed into an election year and Lazear is paid to be optimistic.
Recession is predicted by a number of experts, including Paul Krugman, who bases his forecast on the belief that the crumbling housing market will indeed drag the credit market down with it "causing business investment to go the way of home construction." How bad will it get? "Well, I've never seen financial insiders this spooked," says Krugman. He may not actually be paid to be pessimistic, but most gloomy predictors tend to discount the fact that the American economy is large, diversified, and resilient, and can absorb a great many blows without buckling.
So let's pretend we're Olympic judges and throw out the high and the low, which leaves us with an economy that will likely be pretty flat.
For IT professionals, a flat economy means that the usual suspects will be trotted out: placing a freeze on new projects; putting major hardware and software purchases on hold; and cutting training budgets. But not all is bleak. There will be a handful of growth sectors that will serve as oases for job thirsty IT professionals. The security industry and its antonym, the surveillance industry, will continue to require huge amounts of computing power and expertise, as corporations and various government agencies gather and sort vast amounts of our personal data. Most of the information may not even be useful, but corporations think they need it because competitors have it. And once the gathering frenzy begins, it feeds on itself, thus safeguarding the jobs of those who work in its service.
If you're looking for somewhere to jump, look to the healthcare sector, America's growth industry. The Boomers are in their surgical years and the management of their medical records alone will employ an army of IT personnel. Hospitals, medical centers, rehabilitation centers, assisted living facilities, not to mention insurance companies, will all provide strong employment opportunities for IT personnel. And, before the Boomers begin queuing up at the ICU, more of them will be retiring, which will ensure a measure of job security for following generations.
The other variable in 2008 will be the cost of energy. Oil is already at an all-time high and some economists have fuel prices rising to $4 a gallon by the spring. They may not get that high, but on the other hand no one is predicting that prices will be coming down any time soon. Of course it all depends on what happens in the Middle East, and anyone who can predict that can lay claim to being the second coming of Nostradamus.
Higher home heating costs and gas at four bucks a gallon means a lot of money will be siphoned out of the economy. Small businesses will suffer as discretionary income falls. As the cost of producing and transporting goods rises, so will inflation, further damaging retail sales. But although retail will not be a desirable sector for IT personnel in 2008, a slowing economy is bound to create some software and hardware bargains. Those IT departments looking for extra incentives to upgrade their systems will find them in the second half of the year.
One of the most exciting surprises of 2008 is that major players in the IT industry are taking energy independence into their own hands. Rising energy costs, coupled with concern for the health of the planet (which tends to get activated when energy prices rise), have giants like Google, IBM, Cisco Systems, and Intel looking for ways to cut their energy costs. IBM's approach is to promote the green data center with its Project Big Green initiative. Google's answer is diversification.
Google is expanding into renewable energy. Voraciously dependent on electrical power to operate its massive computing centers, Google is investing a mountain of money in solar, wind, and other alternative energy sources. Google, in fact, plans not only to power its own operations, but to license its technology and sell power to other users. So broad is its initiative that the entire economy stands to benefit because--if the company succeeds--Google's co-founder Larry Page estimates that the cost of solar power will fall by 25 percent to 50 percent.
Google's goal is to produce an amount of energy equivalent to that needed to power a city the size of San Francisco, at a cost below the rates of coal-burning plants. And, with cash reserves of $13 billion, it can toss a lot of money at the problem. Even if renewable energy was not a global business opportunity, Google's presence alone makes energy and conservation a growth sector with huge spin-off potential, and an attractive alternative for IT professionals.
The IT industry's involvement in critical global issues is particularly heartening because during hard times job satisfaction shifts from personal to financial. Ordinarily, when economic conditions are uncertain, fewer people will follow their passion and more will be forced to follow the money. It is the privilege of a lifetime to find work for which one feels passion; to invest one's life energy in something that matters.
It is a hugely important issue for people of all ages, but particularly for younger workers who are still idealistic enough to ask "How can I make a difference?" The more useful question is "Do you like the difference you're making?" and if not, what will it take to let go of the predictable and embrace the unknown? Much personal misery comes from working a lifetime at jobs that offer no psychological fulfillment. Think back to jobs you had as a teenager and imagine a lifetime of that. The price of following the money while suppressing the inner call to, as Joseph Campbell put it, "follow your bliss," is accumulated weariness, hopelessness, and resentment--which necessarily infects everyone in our presence.
"I think," said Campbell, that "the person who takes a job in order to live--that is to say, for the money--has turned himself into a slave." He further noted that "a hero is someone who has given his or her life to something bigger than oneself."
Times of turbulence are times of change and times of opportunity. My most fervent prediction for 2008 is that we all become heroes.
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