Gartner recently released a report predicting the spending of Australian companies on IT services would increase by 8.9 percent to AU$11.9 billion in 2002 compared to 2001, and would reach AU$16.7 billion by 2005. IDC figures predict the Australian IT services market will grow to AU$16.145 billion by 2006, a compound annual growth rate of 10 percent.
However, neither company feels this will result in a corresponding increase in jobs in that sector.
-There's not a direct relationship between services market growth and the labour market," IDC analyst Andrew Milroy told ZDNet Australia. Gartner analyst Minjoo Chon agreed, saying an increase in the market wouldn't necessarily mean employing that many more people, because the industry isn't labour intensive.
Both analysts referred to recent layoffs. -It seems like the industry is not doing well," said Chon, citing IBM's recent cut of 1,400 people. -The layoffs are just normal business practice pushed by global initiatives," he added.
Milroy offered a different view for pessimism on the job front. He said that downward price pressure on outsourcing contracts was resulting in layoffs as outsourcing companies economised.
-It doesn't mean the services are falling, but the companies are automating areas, such as using network manager software," said Milroy. -When the market does pick up, of course you will need more people."
-When we see 15 percent growth again we'll start seeing more people employed," he said. -But the nature of IT services is going to change. People will need to understand business as well as technology."
