Headlines everywhere are shouting that the current recession means no industry is safe, but does this ring true for tech? We don’t think it does. In fact, the economic downturn could in many ways see new trends emerge, increase industry spending and push for salary rises in the bid for new tech talent.
The desperation for tech talent in the current market
Tech jobseekers currently have the upper hand as companies are desperately scrambling to find tech talent, using higher salaries and unique benefits to attract the best candidates. The tech industry isn’t immune to the cost-of-living crisis with inflation outrunning salaries, but this is likely to change in the upcoming recession. 2023 will come with a host of issues for CIOs, so retaining employees and attracting new workers is crucial, and as a result salaries are expected to increase between 5% and 10% from existing levels.
Cloud 9
One of the many trends that emerged from the pandemic was the desperate need for accessible data storage. The Cloud satisfied this demand and we saw job vacancies increase by 57% in 2021, and the figures don’t stop there. Forecasts highlight that there will be rapid growth on spending by 2023 at $500 billion, an increase of around $200 billion from this year. Major enterprises have realised the value of the cloud and its integral role, with Office 365 and Salesforce recently moving to SaaS services. The high growth rate from the pandemic proves the cloud is one of the most recession proof areas and will only further expansion.
Fearmongering
With the recession looming, media everywhere is shouting no industry is safe. Business insider highlighted that 82% of business owners feel uncertain about what the recession means for their tech company, but failed to mention that almost 60% feel optimistic and 52% plan to expand their business over the next year. Headlines are stating that there have been plenty of layoffs in the tech industry but this doesn’t seem to be down to the industry itself. Recent redundancies appear to be the cause of problems exclusive to companies and not decreasing demand. Investors who have tracked tech over the years know the industry’s rise and fall is temporary. The need for technology is not fleeting, which is why long-term investments are key. Tim Bajarin from Forbes shares that he’s lived through multiple recessions and watched many tech companies become more powerful after each one.
Before the pandemic tech spending seemed to rise and fall in line with GDP, but the pandemic turned that theory on its head and companies realised they could optimise tech for further growth. The usual behaviour of businesses during a recession is to cut what they deem as unnecessary spending like rehires or laying off staff. Paul Otellini, the former CEO of Intel believed the opposite. During economic downturns, he would increase job roles and push expansion plans. A recession isn’t necessarily doom and gloom, they’re also a chance for companies to show their leadership and refine their processes to be closer to their customers than ever before.
Emergence of new roles
The tech industry is famous for creating a consistent stream of new jobs, and this is only going to grow in the near future. The emerging trends of self-driving cars, VR and the metaverse has created a hunger for skilled tech individuals. If you follow Kanye West on social media, you’ll remember his disinterest towards NFTs, but following his trademark applications for “non-fungible assets” earlier this year it seems his opinion may have changed, and with good reason. Even Kanye is realising that he can’t miss out on a slice of the NFT pie. The web 3.0 market is attracting hefty R&D investments and these roles grew at a rate of 395% between 2020 and 2021 with no sign of a decline. To see the NFT art that Kanye may or may not create, have a think about what his art gallery in the metaverse might look like. By 2026, a quarter of the world’s population will spend at least one hour a day there (in the metaverse not Kanye’s virtual art gallery). In a matter of months, the number of metaverse vacancies have grown five times the amount and they’re anticipated to grow even higher.
Tech has proved it can go through countless hard economic times and come out stronger on the other side. This recession is no different. Tech is a fast-paced innovative industry, always ahead and looking to the future to overcome current problems. Whether that’s the pandemic or economic downturn, tech is one of the few industries able to equip other sectors and come out even stronger. With the high demand for tech talent, increased investments and the emergence of new roles, it’s fair to say the tech industry is safe from the recession.
