Why Hasn’t Tech Suffered Like The Others In The Global Recession?
I still find this an interesting question. I think the answer is as much cultural and tangential to generational change as it is to flaky financial practices.
As the U.K. begins to come to grips with the Digital Economy Act, it’s tempting for me, as an American, to sort of wave my finger and say, ‘Liberty!’. But I’m not going to do that. What I’d like to do is observe that /accuracy/, simple /accuracy/, is as much responsible for the Tech Salient holding it’s own better than the rest of the economy during the recession.
The first caveat is somewhat nationalistic. When Microsoft or Virgin Mobile lays off 2000 workers in a phone bank in Bangladesh, well, it doesn’t hurt us here in the U.K. and U.S. as bad as it would if it were Manchester or Wichita. That’s a fact of life that really only comes to the fore when big international groups get together to protest or run campaigns to spotlight working conditions for foreign workers. When these events aren’t active, the plight of those 2000 Bangladesh workers doesn’t seem to have that much leverage, and the Stock Exchanges don’t react as violently.
The second caveat has to do with the nature of the industry itself, and it’s historical place in the business hierarchy. For a long time, IT departments were treated as cost centers and placed under the control of the CFO or other financial boss to answer to the accountants. That IT was ideally suited to work closely with comptrollers, and the like, inculcated a sense of the importance of accurate transmission of information, which also happened to be a virtue of good programming. Finance and IT strolled hand and hand.
But then something happened. IT began to take on a life of it’s own outside of the partnership. This independence, and the sense of freedom it engendered, led, of course, to some of the excesses that caused the Dot Com Bubble and Burst, but also led, after some of the wreckage was cleared away, a vibrant and profitable IT sector that stood all on it’s own. Thus, although Finance was partially responsible for helping IT learn the ropes, the time came that IT took it’s own seat at the table.
However, IT doesn’t care much what you do with it. IT is a tool-maker, Finance is a tool-user.
This essential difference provided IT with an advantage, the accuracy and precision to get it’s internal figures right, and none of the marketing hype and greed that led to the likes of Bernie Madoff and the derivatives craze. Tech takes a somewhat longer view.