Few technologies have created more value than software. Almost every industry today depends on software in some way, and for countless companies, it plays an essential role in designing products, analyzing data, running facilities, and managing customers—to name just a few functions. Software talent, as a result, has become critical to success in most industries today.
Consider some examples. Ford Motor’s leaders have said that the company’s most critical positions are in software and systems engineering, pitting the company directly against its technology partners in a competition for software talent. ServiceNow, a cloud-based IT services provider, is headquartered in Silicon Valley and maintains a major presence in its first home of San Diego because, in the words of CEO Frank Slootman, “These days, talent doesn’t move much anymore, and employers need to set up shop where the concentrations of talent are.” The Chevy Volt runs on 10 million lines of code—2 million more than the F-35 fighter jet. This level of software sophistication is far more the rule than the exception these days. The Boston Consulting Group’s most recent report on value creation in the technology, media, and telecommunications industries highlights the critical role of software. (See The Great Software Transformation: How to Win as Technology Changes the World, BCG report, December 2013.)
In new industries and old, software has become a critical determinant of success. The big questions that company executives of all kinds need to be asking themselves are, “Who is writing all that code?” and, more to the point, “Who is writing it for our company, and how do we make sure that we maintain access to the talent we need?”
To get a handle on the extent of the challenges that companies face in an age when, as venture capitalist Marc Andreessen puts it, “software is eating the world,” BCG undertook a major study of the demand for, and supply of, software talent in the United States. The project included both top-down and bottom-up assessments. The first assessment used data from the U.S. Bureau of Labor Statistics (BLS), among other sources. The second included analyses of the employment landscape from well-known research firms and employment-related companies and networks, as well as our own proprietary survey of 1,000 executives who are familiar with software development in a wide variety of high-tech and non-high-tech industries.
This report presents our findings and suggests the steps that companies need to take to make sure that they are well positioned to win in the increasingly intense and complex battle for software talent.