Cloud Computing To Fuel Job Creation In High Tech Industries

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Cloud Computing to Fuel Job Creation in High Tech Industries, says London School of Economics

Not long back I had written about a UK study where Chief Information Officers (CIOs) had described cloud computing as having had the biggest positive impact on businesses in 2011 (See: Cloud Computing “Most Positive for Businesses”: UK Study ). Now another study, this time from the venerable London School of Economics, speaks about what to expect in the future.

The London School of Economics and Political Science (informally the London School of Economics or LSE) is one of the most famous and highly-reputed social sciences institutions in the world. Therefore, when it comes out with a report attesting to the job creation potential of cloud computing, it gets coverage all around the world.

The report, titled Modelling (UK spelling) the Cloud and commissioned by Microsoft, looked at the projected economic impact of cloud computing on the aerospace and smartphone services industries in the UK, the US, Germany and Italy from 2010-2014. The study utilized a combination of public domain and interview data, industry provided data and proprietary research by the authors Jonathan Liebenau, Patrik Karrberg, Alexander Grous and Daniel Castro of the LSE. Research was conducted under the auspices of LSE-Enterprise, the business services and knowledge transfer unit of the institution.

(The entire report is available for free download at: http://www2.lse.ac.uk/management/documents/LSE-Cloud-report.pdf.)

The two industries covered by the study, smartphone services and aerospace, can be considered as suitable proxy for all high tech industries affected by cloud computing because of their differential rates of growth. As expected, smartphones, which make extensive use of Internet-based services, are affected considerably more as compared to traditional high tech manufacturing like aerospace. That is why, in the UK from 2010 through 2014, the rate of growth in cloud-related jobs in the smartphone services sector is set to be 349%, compared to 52% growth in aerospace. Corresponding figures for Germany, Italy and the US are expected to be 280% vs 33%, 268% vs 36% and 168% vs 57% respectively.

Demand for skilled personnel will also result in higher-than average salaries, said the report. It estimates that IT facilities managers and IT core administrators will be in the $70k-120,000 salary bracket in the US and £40k-60,000 in the UK (with Germany featuring an estimated 95% of UK salary levels, Italy with 80% of UK levels). Moreover, there is little chance of layoffs due to cloud migration, with most companies expected to invest in retraining staff. Additionally, several indirect employment opportunities in the form of construction and maintenance are also expected.

Similar data and opinions have been covered in earlier articles like:

1. Cloud Hiring Reaches New Heights

2. IT Workers Will Survive In a World on the Cloud

3. Should You Train To Be A Cloud Computing Professional? – Part 2 

Speaking on the report, John Vassallo, VP of EU Affairs at Microsoft, said, “Cloud computing and the explosion in access to technology is impacting the character of work across industries, generating new skills demands, employment and growth opportunities. LSE’s study underscores these phenomena using rigorous economic analysis that forecasts growth as a result of the transition to cloud technologies in two major industrial sectors – aerospace and smart phones. The findings highlight that Europe has real opportunity to capture the cloud’s potential, with particular benefit to SME’s as well as new business creation through emerging cloud services.

By Sourya Biswas

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