Are Information Technology sectors Recession-proof?
With our Economy at a halt due to widespread of the deadly virus COVID-19 a.k.a “Corona Virus”, one may hope for a huge upcoming Recession. At times like this, everyone must be thinking about their economic security. The stocks are crashing, day to day supplies are getting scrambled up, and so on. India’s 1.3 billion people are under lockdown for 21 days to put a stop in this escalation of the virus. Amidst all these problems, what will the aftermath of this outbreak? This thought prevailed me to think, “Are Information Technology sectors Recession-proof?”
Early 2000 was the year of the rise of technology; though it was just the beginning. So, the recession of 2000 was not at all kind to any developer or coder. Internet stock price got out of control and the aftermath was few leftover startups. Thousands of programmers lost their job and found it extremely difficult to land a proper job which lasted for over two years.
But in the times of the “Great Recession” which had happened in the year 2007 due to house marketing collapse, tech companies were much stronger and we’re better off than the Recession of 2000. So, one might think what happened new this time and how did they fare?
Since it was a recession, some engineers lost their job. But if we infer from the data available we will find that the IT industry suffered a less loss than other industries. Fortunately, it started growing within a year. Other industries were not so lucky. But overall Indian economy shed a million jobs.
But after the “Great Recession”, jobs in the IT sector started growing gradually and there was a huge boom in the sector. It was seen that there is a sudden growth in the percentage share of Indian GDP by the IT sector. New jobs were concocted and there was a significant employment improvement in IT sectors. Programming jobs increased because software went from an afterthought to mission-critical at almost every company in the world. Today software and IT engineers are even better positioned than they were in 2008. India’s highly qualified talent pool of technical graduates is one of the largest in the world, easing its emergence as a preferred destination for outsourcing, computer science/information technology contributing for the biggest chunk of India’s fresh engineering talent pool, exceeding 98% of the colleges offering this stream.
The Information Technology sector ranks 3rd in the country’s total Foreign Direct Investment share and contributes to about 37 % of total Private Equity and Venture investments in India. The computer software and hardware industry in India attracted cumulative Foreign Direct Investment (FDI) inflows worth US$ 29.825 billion between April 2000 and September 2017, according to report released by the Department of Industrial Policy and Promotion (DIPP).
Could a new recession destroy over a million jobs and stop the rapid growth of software and IT engineering jobs? It is possible but unlikely. If this recession is similar to the last one, we can expect the number of projected jobs to decline. Still, it is unlikely that companies will shed enough programming jobs to erase the current programming job deficit, especially considering that technology companies have only grown stronger since the last downturn. During the Great Recession, future mammoth tech companies like Facebook were just getting warmed up. Plus, the rise of the sharing economy unicorns like Airbnb and Amazon that are now an essential part of the economy hadn’t happened yet.
With the collapse of WeWork (even though it pretended to be a tech company when it wasn’t), I wouldn’t be surprised if startups with astronomical valuations but little revenue go under, which would be harmful to programming jobs. Still, it most likely will not be enough to erase the other inherent advantages people with programming skills have in the job market right now, even in a recession.
Now coming at present times, we may find ourselves again in the same situation. With the increase in COVID-19 cases in India, nothing can be said. If IT engineers are unable to find work because of the economic fallout from COVID-19, it most likely means we are entering another great depression, or the startup bubble was much bigger than anyone thought. Still, there is no skill I would rather have during an economic downturn than knowing how to program. If you don’t know how to program yet, you should consider using your extra time to learn to code.
“Programming” has now become such an important aspect in every field. Whether you want a job in this field or not it does not matter now. One must know at least one programming language to land a good job.
In the end, I can only hope that we are all impacted as minimally as possible economically by this, but it is best to start preparing now. During this quarantine, expand your boundaries of knowledge by doing productive work somewhat like learning a new programming language or new technologies like Cloud Computing.
So, stay healthy and productive and self-isolated.