By 2030, the IT industry will be short of 789,000 talents.

This figure was released by the Ministry of Economy, Trade and Industry in 2016. In response to the growing IT demand in Japan, and due to population decline and other factors, it is said that 10 years from now there will be a shortage of 789,000 IT engineers. For companies that are looking into DX (digital transformation) and labor cost efficiency, such scarcity of IT resources would certainly be a critical situation.

By then, hiring IT engineers in-house and retaining them would become extremely difficult. To begin with, because of the shortage hiring one would be difficult, and even if you’d find one the asking salary will be high due to competition. The cost of hiring would be expensive as well. Naturally if companies don’t raise engineers’ pay they would switch jobs immediately, and if there is no regular 1 on 1 career planning, they would be demotivated and end up leaving. I’ve also heard that IT recruitment is becoming one of the most troublesome endeavors lately.

Towards that age of shortage, these difficulties are expected to further accelerate, and so I think that it is necessary to promptly work on a system wherein required number of engineers can be secured as needed or development can be outsourced to development partners.

Also in recent times, there is an emerging consensus that in the past, the software itself was valuable, but now that software is changing according to the times, what is now more valuable are the data and transactions acquired from software. We are moving into an era where it doesn’t matter who creates the data, as long as that data can be secured. Especially since the covid-19 pandemic, there are many companies whose own employees even were less likely to come to the office, and so whether work is done in-house or outsourced, domestically or overseas, it doesn’t pose a problem at all. IT development is making such a big shift.

If we have a system in place where we could build relationships with a domestic or overseas development from an early stage, and we could secure engineers domestic or abroad in a scalable manner, then companies are enabled to assign to key in-house engineers tasks that are in line with their individual competencies and personal hobbies, or have them focus on the company’s core technologies. In doing so, these engineers are motivated, and employee turnover is reduced.

In addition, because in-house engineers are dedicated to certain technologies, development using either commoditized (or proprietary) technologies or non-core technologies, are outsourced to external vendors. Previously we had to refuse these due to lack of developers, but now we are able to accept these job orders. We believe that we have a strong and resilient organization that is flexible enough to respond to urgent issues and schedule changes.

Shifting to such a structure definitely can not be achieved overnight, and would take at least a year, but I think IT companies that are ahead in terms of preparation will have more growth potential in the future.