Shift in Supply and Demand:

¶ … shift in supply and demand: Technology

The creation of a new form of technology, such as the relatively recent explosion in the use of personal computers, can create a sharp upturn in demand for new, highly skilled workers. Several possible scenarios can occur as a result of new technological developments: firstly, workers with highly prized skills may suddenly have extremely marketable job qualifications. Their salaries will go up. Businesses will try to use less expensive, outsourced labor whenever possible to curtail salary growth. More graduates will begin to major in technological fields because of the high levels of demand and high salaries.

Thus, both the demand and the supply of labor will increase. The demand for labor will expand, as employers in the high-tech sector will wish to capitalize upon this new ability to make a profit, and because being a first mover in a technology field bestows such a critical advantage upon the supplier. Furthermore, technology can change at such a frenetic pace, failing to hire talented new workers can cause the company to lag behind its competitors.

The supply of workers would also increase, however, as the result of increased demand. At first, because workers in this field are highly skilled, they might be able to command a very high price for their labor, and supply might initially be constrained and lag behind demand. But the global economy has enabled many high-technology jobs to be outsourced. Furthermore, college students are likely to tailor their skills to the upturn in demand. Because many of the workers in this industry are young, and the field is geared to younger people with a high level of comfort with technology, an influx of new graduates is likely. The only possible 'cap' upon the potential supply of workers is that the field of technology is also difficult. Difficulty in mastering the field and getting a degree in computer science or engineering may pose a limit upon the supply of laborers.