Cloud Computing and Data Analytics Are Net Job Creators

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Some recent articles on technology such as this report from The Economist reawaken the old fear of technological unemployment. SIIA thinks this fear is unfounded. Studies show that technology is a net generator of jobs across the entire economy.

Some evidence of this effect comes from studies of cloud computing. One recent report found that “cloud computing is a powerful catalyst for job creation. Although some lower-skilled jobs will be lost because of the higher automation and efficiencies of the cloud, we expect cloud computing to generate hundreds of thousands of net new jobs in the United States and worldwide…”

The job growth related to cloud computing comes from several sources. Existing cloud companies themselves are hiring new workers and if their growth continues on its current trajectory that could generate almost 472,000 jobs in the United States in the next 5 years. In addition, new cloud companies are expected to enter this rapidly growing market and investments in these startup cloud companies could add another 213,000 jobs.

Cloud services also make it possible for new business to form more easily, since they can rent the computer services they need as they scale up. Moreover, existing businesses can use the savings generated by using less expensive cloud computing services to invest in new lines of business and to expand their operations, thereby generating new jobs needed to provide these additional products and services. Together these cost savings could generate hundreds of thousands of jobs beyond those generated directly by expanding cloud computing companies.

As we pointed out in an earlier blog post on this issue, the growing demand for big data analytics services has created hundreds of thousands of job openings. This demand for data scientists is another example of technological job creation.

Economists have long thought that over the long term and viewed from the point of view of the economy as a whole better technology means more and better jobs. The evidence of the effect of cloud computing and big data on job creation confirms this traditional view.

Mark Mark MacCarthy, Senior Vice President, Public Policy at SIIA, directs SIIA’s public policy initiatives in the areas of intellectual property enforcement, information privacy, cybersecurity, cloud computing and the promotion of educational technology. Follow Mark on Twitter at @Mark_MacCarthy.