ICT sector employment is a significant share of total employment. Almost 16 million people were employed in the ICT sector in OECD countries in 2008, or 5.8% of total OECD business sector employment (Figure 3.1). The sector’s long-term growth (1995-2008) has been more than 1.2% a year, almost a half a percentage point higher than total business employment growth. Finland and Sweden had the largest shares of ICT employment in total business employment at over 8%, and these shares have increased markedly, as they
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also have (in decreasing order) in Luxembourg, the Czech Republic, Switzerland, and Norway. The share of employment in the ICT sector declined, for example, in Canada and the United States, an indication of increasing manufacturing and services trade and sourcing with non-OECD economies.
In the United States ICT sector employment accounted for more than 30% of total OECD ICT sector employment in 2008, by far the largest share, followed by Japan (19%) and Germany (8%) (Figure 3.2). Value added per employee varies widely across countries: it was high in the United States and much lower in Japan (see Chapter 1).
Figure 3.1. Share of ICT employment in business sector employment, 1995 and 2008
Note: 2007 instead of 2008 for Portugal and the United States. 2000 instead of 1995 for Hungary. See Methodology and Definitions, Annex A, for more details.
1. Data for Iceland, Mexico, New Zealand, Poland and Turkey are not available.
Source: OECD estimates, based on national sources, STAN and National Accounts Databases, June 2010.
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Figure 3.2. Share of OECD ICT employment by country, 2008 or latest available year
1. Data for Iceland, Mexico, New Zealand, Poland and Turkey are not available. See Methodology and Definitions, Annex A, for more details.
Source: OECD estimates, based on national sources, STAN and National Accounts Databases, June 2010.
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1995 2008
%
0 2 4 6 8 10
Finland Swede
n Hun
gary Ireland
Japa n Denma
rk
Netherlands France
Norwa y
United Ki ngdomKorea
Luxemb our
g
Slov ak Rep
ublic
Czech R epublicOEC
D1
United States EU15
Italy Germa
ny Belgium
Aus tria
Aus tralia
Canada Swit
zerland Spai
n Greece
Portugal
Germany 8%
United Kingdom 6%
France 6%
Korea 6%
Italy 5%
Canada 3%
Spain 3%
Other OECD1 14%
United States 30%
Japan 19%
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In OECD countries, over 11 million people are employed in ICT services and almost 5 million in manufacturing. From 1995 to 2008, employment in computer and related services and IT services has grown more rapidly than business services as a whole (including IT services) (almost 3% a year and 1.6% a year, respectively) (Figure 3.3). Over the same period, ICT manufacturing employment declined more rapidly than manufacturing employment overall (1.3% a year and 1% a year, respectively). In most OECD countries, increases in ICT services employment outweighed declines in ICT manufacturing employment, so that the ICT sector continued to increase its share of total business sector employment. In the United States, however, the increasing share of ICT services employment did not compensate falling ICT manufacturing employment, so that the share of ICT employment in total business sector employment decreased from 5.8% in 1995 to 5.5%
in 2007. In 2008, ICT employment in the United States accounted for 5.3% of total business sector employment (see Woods, 2009).2
Short-term indicators of employment in ICT goods and services3
In the last quarter of 2009, employment in ICT manufacturing in all reporting economies, except in Asia, had dropped by between 5% and 10% year on year (Figure 3.4). ICT manufacturing employment in Japan and China was almost as high as in the previous year.
Canada, Germany and the United States have fared the worst, with the downturn in ICT manufacturing employment falling by 10% at the end of 2009. Nevertheless, at the end of 2009, employment in ICT goods was holding up better than overall manufacturing in Canada, Sweden, the United Kingdom and the United States (see Annex 3.A1). This sector fared worse than total manufacturing in Germany, Japan and China. Germany experienced a relatively stronger drop in ICT goods employment as of the second quarter of 2009. It is also the only country in which job cuts in ICT manufacturing firms have been relatively deeper than in automotive firms, possibly owing to government incentives to purchase motor vehicles.
Comparisons over time are difficult because of a lack of historical data, classification changes Figure 3.3. Growth of ICT sector and total employment in the OECD area,
1995-2008
Index 1995 = 100, compound annual growth rate (%)
Note: Data for Iceland, Mexico, New Zealand, Poland and Turkey are not available. See Methodology and Definitions, Annex A, for more details.
1. OECD estimates, based on national sources, STAN and National Accounts Databases, June 2010.
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70 80 90 100 110 120 130 140 150
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
ICT manufacturing -1.3%
Total ICT 1.3%
Manufacturing -1.0%
Services 1.6%
Total business sector 0.9%
ICT services 2.7%
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Figure 3.4. Quarterly employment in ICT manufacturing
Year-on-year percentage change
Source: OECD, based on official data from national statistics offices.
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%
%
%
-15
-15 -10 -5 0 5
-10 -5 0 5 10
10
-15 -10 -5 0 5 10 15 20
Germany Sweden United Kingdom
Jun e 07
Sept.
07 Dec.
07
March 08 Jun
e 08 Sept.
08 Dec.
08
March 09 Jun
e 09 Sept.
09 Dec.
09
Japan China
Jun e 07
Sept.
07 Dec.
07
March 08 Jun
e 08 Sept.
08 Dec.
08
March 09 Jun
e 09 Sept.
09 Dec.
09
Jun e 07
Sept.
07 Dec.
07
March 08
March 10 Jun
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08 Dec.
08 March 09
Jun e 09
Sept.
09 Dec.
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Canada United States
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and a lack of detailed data from some large producers. However, where comparable data are available, ICT manufacturing employment is still performing better than during the downturn of 2002-03 (see Canada, United Kingdom, United States in Annex 3.A1).
Where data are available, ICT services employment (including telecommunication services) has tended to remain flat or decrease slightly (by not more than 4%) in Canada and the United States, as well as in most European countries. In Germany, Sweden and in most Asian countries, ICT services employment increased by between 2% and 7%
(Figure 3.5). Japan, Korea and China saw stronger growth in employment at the end of 2009.
Employment has fared better in ICT services than in the financial sector in most countries (see Annex 3.A1 for Japan, Korea, Sweden, the United Kingdom, the United States and China). In Chinese Taipei, the financial sector performed slightly better. In Canada, growth of employment in ICT services is around the same as that of total services. IT services are generally performing better than telecommunications services in terms of year-on-year employment performance.
Overall, at the end of 2009, employment in ICT manufacturing in most countries fell by 6-7% year on year except in Asia, where it was more stable. In most countries, this is better than in 2002-03 and better than for total manufacturing. In Germany, however, employment in ICT manufacturing was weaker than in manufacturing overall. ICT services performance tends to be better than that of the financial sector in particular, but is flat overall except in Asia and Germany, which enjoyed positive growth in ICT services employment at the end of 2009.
Employment in large ICT firms
This section describes the employment performance of the top 250 ICT firms in order to compare recent employment trends in more detail. The data used for this analysis are based on annual reports for the years 2000 to 2009.4 This analysis is designed to expand the data available from national statistics and complements the analysis of the top 250 ICT firms in Chapter 1.
In 2009, the top 250 ICT firms employed more than 13 million worldwide (almost 70%
of ICT sector employment in OECD countries). The average number of employees in the top 250 firms was more than 54 000. Large IT services firms had on average the most employees (62 000 on average), followed by electronics and component firms (more than 60 000 on average). In contrast, the top Internet, semiconductor and software firms in the top 250 ICT firms had on average only 14 000, 22 000, and 30 000 employees, respectively.
Between 2000 and 2009, average employment in the top 250 ICT firms increased by 1% a year. After the dot.com bust in 2001, average employment declined by 10% in 2002 and 4%
in 2003 (year on year) (Figure 3.6). In 2004, average employment started to increase but surpassed the 2000 level only in 2006. In spite of the financial and economic crisis, employment in the top 250 firms increased by almost 1% in 2009 compared to 2008, but this was often due to mergers and acquisitions (M&A), in particular in the IT equipment industry.
Between 2000 and 2009, employment in the top Internet firms grew the fastest (by 21% a year), followed by IT equipment firms (14% a year) and software firms (8% a year) (Figure 3.7). In 2009, despite the downturn, IT equipment, Internet and electronics and component firms increased employment on average by 6%, 4% and 2%, respectively.
Average employment decreased the most in semiconductor and telecommunication services firms, by 3% and 2% respectively.
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Figure 3.5. Quarterly employment in ICT services
Year-on-year percentage change
Source: OECD, based on official data from national statistics offices.
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%
%
%
-15
-15 -10 -5 0 5
-10 -5 0 5 10
10
-15 -10 -5 0 5 10 15 20
Germany Sweden United Kingdom Spain
Jun e 07
Sept.
07 Dec.
07
March 08 Jun
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08 Dec.
08
March 09 Jun
e 09 Sept.
09 Dec.
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Jun e 07
Sept.
07 Dec.
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March 08 Jun
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08 Dec.
08
March 09 Jun
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09 Dec.
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Jun e 07
Sept.
07 Dec.
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March 08 Jun
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March 09 Jun
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Japan Korea China Chinese Taipei
Canada United States
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Analysis of firm data confirms that the ICT sector is becoming less employment-intensive (see the discussion on value added in Chapter 1). Average revenue per employee in the top 250 ICT firms has increased steadily since 2000; revenue per employee started to fall slightly only in 2009, mainly due to declining revenues. In 2009, the top 250 ICT firms generated average revenues of more than USD 298 000 per employee. This is 5% less than in 2008, but still 44% more than in 2000.
A breakdown by sector shows that large Internet firms had the highest average revenue per employee (Figure 3.8). For every person employed in the Internet sector in 2009, Internet firms generated on average more than USD 809 000. All other ICT sectors generated revenues per employee of between USD 402 000 (software) and USD 185 000 (IT services).
Figure 3.6. Top 250 ICT firms’ employment trends, 2000-09
Average number of employees, index 2000 = 100
Note: Based on averages for those firms reporting in 2000-09.
Source: OECD Information Technology Database, compiled from annual reports, SEC filings and market financials.
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Figure 3.7. Employment trends in the top 250 ICT firms by industry, 2000-09
Average number of employees, index 2000 = 100
Note: Based on averages for those firms reporting in 2000-09.
Source: OECD Information Technology Database, compiled from annual reports, SEC filings and market financials.
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70 80 90 100 110 120
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
0 100 200 300 400 500 600
Software
Communications equipment Telecommunications
Semiconductors
IT equipment
IT services
Electronics and components
Internet
Software
Communications equipment Telecommunications
Semiconductors
IT equipment
IT services
Electronics and components
Internet
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The remarkable difference between Internet firms and the other ICT firms is due in part to fundamental differences in their business models. Compared to other industries, services provided by the Internet industry mainly involve data centres and database management.
These tend to be less labour-intensive than IT services and software firms, in which labour is the main source of value added. This points to one of the main differences between cloud computing (i.e. Internet services) and IT and business process (BP) outsourcing (i.e. IT services) from the employment point of view (see section on cloud computing). Internet firms are also less R&D-intensive than semiconductor, communications equipment and software firms (see Chapter 1).
Overall, employment in the top 250 ICT firms remained stable in 2009. However, this was mainly because M&A activity compensated for job cuts. Furthermore, job cuts by the top 250 ICT firms outnumbered increases in employment: among the top 250 ICT firms, 109 (44%) cut jobs, 82 (33%) increased their employee numbers and the remaining 24%
reported no change. For comparison, in 2008, 88 (35%) of the top 250 firms decreased and 121 (48%) increased employee numbers. Employment in the top 250 is therefore likely to come under greater pressure in 2010, in particular if large job cuts follow the M&As.
ICT employment across the economy
ICT-related employment is widely spread throughout the economy. Many ICT-skilled employees carry out ICT tasks in other sectors of the economy and some employees in the ICT sector do not have ICT-related jobs. Two measures of ICT-skilled employment are based on ICT-specialists occupations and ICT-using occupations. One is a narrow measure, which comprises ICT specialists whose jobs focus on ICTs, such as software engineers. The other is a broader measure of ICT-skilled employment, and concerns employees who use ICTs regularly as part of their jobs, but whose jobs do not focus on ICTs, such as researchers or
Figure 3.8. Average revenue per employee of the top 250 ICT firms by sector, 2000-09
USD thousands
Note: Based on averages for those firms reporting in 2000-09.
Source: OECD Information Technology Database, compiled from annual reports, SEC filings and market financials.
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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
100 000 200 000 300 000 400 000 500 000 600 000 700 000 800 000 900 000
0
Software
Communications equipment Telecommunications
Semiconductors
IT equipment
IT services
Electronics and components
Internet
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ICT specialists
Around 3-4% of total employment in most OECD countries was accounted for by ICT specialists in 2009, although the shares are lower in Eastern Europe (Figure 3.9). The share has risen consistently in recent years in most countries, and somewhat faster than growth in the share of ICT sector employment in business sector employment (see preceding section). Among OECD ICT specialists, women still account for a relatively low share of only 20%, with Finland, Iceland and the United States above the OECD average (Box 3.2).
The divergence between ICT specialists and ICT sector employment suggests that there is ongoing occupational specialisation as higher-level ICT skills are required. These skills are needed in the ICT sector as it restructures around more advanced products and activities,5 but they are also used to a greater extent across the wider non-ICT economy.
This is because ICT specialist skills are required to produce both ICT products such as software in non-ICT sectors (e.g. financial services) and non-ICT products such as automobile systems with ICTs embedded in them (Figure 3.10).
ICT-using occupations
ICT-using occupations (including specialists) make up over 20% of total employment in most countries except in Eastern Europe (Figure 3.12). These occupations include scientists and engineers, as well as office workers who rely entirely on ICTs to perform their tasks, but exclude teachers and medical specialists, for example, as the use of ICTs is generally not essential for their tasks. Overall, these estimates show the importance of ICT-related occupations across the economy, the continuing growth of ICT specialists as a share of the total labour force, and a flattening of the share of ICT-intensive users.
Unemployment
The job crisis in most OECD economies since 2008 has not left ICT workers unaffected.
In the United States, for example, the number of workers affected by mass layoffs in the ICT sector increased as of the second half of 2008 (Figure 3.13). In the second half of 2009, the number of affected workers reached a peak, and three times more ICT employees were
Box 3.1. Defining ICT specialists and ICT users Three categories of ICT competencies are distinguished:
1. ICT specialists, who have the ability to develop, operate and maintain ICT systems. ICTs constitute the main part of their job.
2. Advanced users: competent users of advanced, and often sector-specific, software tools.
ICTs are not the main job but a tool.
3. Basic users: competent users of generic tools (e.g. Word, Excel, Outlook, PowerPoint) needed for the information society, e-government and working life. Here too, ICTs are not the main job but a tool.
The first category covers those who supply ICT tools (hardware and software), and the second and third categories those who use them. This chapter uses the first category for the narrow measure of ICT-skilled employment, and the sum of all three categories for the broad measure of ICT-skilled employment.
ICT specialists are increasingly expected to have additional skills, including “business” skills.
Similarly, non-ICT related professions increasingly require at least basic ICT user skills.
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Figure 3.9. Share of ICT specialists in the total economy, specialist users, 19951and 20092
Note: “Specialist users” corresponds to the narrow definition based on the methodology described in Chapter 6 of the OECD Information Technology Outlook 2004. Shares for non-European countries are not directly comparable with shares for European countries, as the classifications are not harmonised.
Footnote by Turkey: The information in this document with reference to “Cyprus” relates to the southern part of the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Turkey recognizes the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of United Nations, Turkey shall preserve its position concerning the “Cyprus issue”.
Footnote by all the European Union member states of the OECD and the European Commission: The Republic of Cyprus is recognised by all members of the United Nations with the exception of Turkey. The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus.
1. For Australia, Finland and Sweden, 1997 instead of 1995.
2. For Switzerland, the United States and FYR Macedonia, 2008 instead of 2009. For Australia, Poland, Croatia and Malta, 2009 data are provisional as data for the fourth quarter of 2009 are not yet available.
Source: OECD calculations based on EULFS, US Current Population Survey, Statistics Canada, Australian Bureau of Statistics, March 2010.
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1995 2009
0 1 2 3 4 5 6
%
Canada United States
Aus tralia
EU15 Swede
n
Swit zerland
Norwa y
Czech Republic Luxemb our
g Finland
Denma rk
Netherlands Iceland
Germa ny
United Ki ngdomAus
tria Italy
Slovak R epublic
France Spai
n Poland
Portugal Hun
gary Belgium
Ireland Greece
Turkey Estonia
Malta Cyprus
Latvia Slove
nia Bulgaria
Romania Croatia
Lith uania
FYR M acedonia
Figure 3.10. Share of ICT specialists by sector
Source: OECD calculations from US Current Population Survey (CPS), December 2009; Didero et al. (2009) based on Eurostat Labour Force Survey (LFS), 2007.
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and business services 34%
Manufacturing Financial activities 17%
10%
Educational and health services 9%
Information 8%
Public administration 7%
Wholesale and retail trade 6%
Others 6% Transportation
and utilities 3%
Education 3%
Post and
telecommunications 4%
Financial intermediation:
Banking 5%
Public administration 6%
Wholesale and retail trade 6%
Other business activities 6%
Machinery, equipment 10%
Other 19%
Computer services 41%
United States, 2009 EU15, 2007
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laid off than in June 2000. Nevertheless, employment in the ICT sector suffered less than in the dot.com bust in 2001-03, when almost seven times more people were laid off than in June 2000. As in the 2001-03 crisis, job cuts were deeper in ICT manufacturing than in ICT services in 2009.
The job crisis has also affected ICT specialists. In contrast to ICT sector employment, however, employment of ICT specialists declined less than overall employment and appears to be recovering faster. The unemployment rate of ICT specialists in the United States increased from the second half of 2007, and accelerated in the second half of 2008 (Figure 3.14). In June 2009, the unemployment rate of ICT specialists reached a peak at 7.5%,
Box 3.2. ICT-related employment and gender
Women still participate significantly less in the ICT sector and ICT specialist occupations than men, but their share in employment is increasing in most countries. In 2009, the share of women employed in the ICT sector was around 30% in selected countries (Figure 3.11). This is almost double the share of women employed as ICT specialists (see Box 3.1 for a definition) (around 18%). With over one-third of females working in the ICT sector, central and eastern European countries are clearly above the OECD average. The picture is somewhat different for ICT specialist occupations; the highest shares of females working as ICT specialists are in the United States (almost 25%), followed by Iceland, Finland and Hungary, each at around 20%.
Figure 3.11. Share of women in the ICT sector1 and in ICT specialist occupations2 in selected countries, 2009
Note: Data for Switzerland, the United States and FYR Macedonia are for 2008. The aggregate OECD 24 includes European OECD countries plus the United States. Shares are not directly comparable between the United States and European countries.
Footnote by Turkey: The information in this document with reference to “Cyprus” relates to the southern part of the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Turkey recognizes the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of United Nations, Turkey shall preserve its position concerning the “Cyprus issue”.
Footnote by all the European Union member states of the OECD and the European Commission: The Republic of Cyprus is recognised by all members of the United Nations with the exception of Turkey. The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus.
1. The “ICT sector” is defined as the sum of ISIC Rev. 4 sectors 26, 61, 62 and 63 for European countries.
2. “ICT specialists” are defined as the sum of the ISCO-88 codes 213, 312, 313 and 724 for European countries.
Source: OECD, based on EULFS and US Current Population Survey for United States, March 2010.
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5 10 15 20 25 30 35 40 45 50
%
Hun gary
Slovak R epublic
Poland Portugal Czech Republic
United States Spai
n OEC
D24 Finland
Greece Italy EU27Ireland
Swit zerland
Germa ny
France Luxemb
ourg Swede
n Aus
tria Denma
rk Belgium United Ki
ngdomTur key
Iceland Norwa
y
Netherlands Estonia
Bulgaria Lith
uania Croatia
Romania Malta
Latvia Cypru
s Slove
nia
FYR M acedonia
Women in ICT sector Women in ICT specialists