The stock and economic crash of 2001-3 was a crushing event for the IT industry, throughout the nation and the world.  No more so than in Northern California.

A perfect storm including finishing up Y2K, the tech stock bubble bursting and 911, has never been seen before nor is something similar likely to be seen again.   In California 500,000 IT and related jobs were lost over 2 years, more than half never to return because the companies that created them and firms who supported them vaporized.  It was a false economy of the first order, just like the recent real estate bubble, the great Dutch tulip bulb mania and the teapot dome scandal.

While all of what happened in 01-03 was very hard on the IT sector regarding the comeback of  FTE and contract IT jobs, the rest of the economy was into and out of the recession and recovering in 8 months.  Quite a short recession by modern standards.  The IT sector in Northern California took 30 months to recover.  Today’s downturn started in January of 08 with an abundance of financial caution on the part of clients and then fell off the cliff with the financial melt down and stock crash last Fall.  What is different this time is that the IT sector, while slowed down, did not dump thousands of FTE's and contractors on the street.  Instead they froze new FTE hiring, limited contract hiring and quite often extended existing contract consultants on billing.  In one year our average duration on billing has increased 50%.  

What these actions say is that the IT sector is in a money freeze mode, not in a classical boom bust cycle. The green eyeshade guys are sitting on the company wallet.  Companies and other users of IT services have not reduced their need for new software projects and customer offerings nor their demand for talent to get things done.  They have put things on hold, slowed down the pace of what is going on, and/or extended time lines.  Unlike 01-03, the net is that there is huge pent up demand for both FTE and contract IT talent.  When we see it you ask?

Recessions are over and recoveries are in place way before most people realize it because unemployment is such a heavy lagging indicator.  If the other guy looses his job it’s a recession, if you loose yours its a depression.  There are lots of folks in depression and our hearts go out to them.  However most of the job loss this time is in construction and manufacturing.  Not IT.   I believe you will read your news paper or news site on January 2, 2010 and it will say that the recession ended somewhere between August and November of 2009.  The IT talent supply/demand ration will flip no later than first quarter 2010 if it hasn't already. You read it here, write me and tell me if I was wrong.

Aside from pent up demand what do the next few years hold for IT contract consultants?  Demand for your services will rise dramatically over the next 5 years.  Here’s why!  

1. Over this decade enrollment in CS, IT or SWE programs at universities dropped by 40%.  Why?  The best and brightest wanted to get rich on Wall Street.  A few did, most didn't.  Result?  The supply of new skilled talent has leveled off and it will take years for it to recover.

2. The outsourcing trend of the 90s and early 2000's has reached the top of its bell curve and is on the way down.  Too many reasons to discuss in this column.

3. Developing countries such as India, China and the rest are rapidly sopping up their best and brightest for their own software and services sectors, thereby reducing the numbers of people they export.  [Europe an Australia went through this cycle in the late 70s into the late 80s]

No mater how you feel about any or all of these trends, they are real and here to stay as far as I can see into the future.  What does it mean for you, the IT consultant?  It means even higher demand for your skills over the next several years.  The question you should now ask is "what do I need to do to take advantage of the coming opportunities?"  In future columns I will be sharing with you some of my views on how you can do just that.  Please feel free to comment by emailing me at  This e-mail address is being protected from spambots. You need JavaScript enabled to view it .   Thanks for reading.