A widespread shortage of information technology (IT) graduates across North America is forcing Microsoft Corp. and other software companies to look to developing countries such as China to meet their needs, Microsoft Chairman Bill Gates says.

“When we want to hire lots of software engineers, there is a shortage in North America—a pretty significant shortage,” Gates said in an interview with The Associated Press.

“We have this tough problem: If you can’t get the engineers, then you have to have those other jobs be [relocated to] where the engineers are.”

Gates was at the University of Waterloo in Ontario, Canada, which historically has been a favorite hiring ground for Microsoft, on Feb. 21 to deliver a speech to students about the state of developing technology.

But Gates also told the students that IT jobs are in high demand.

“It’s partly that the enrolment in the field is going down,” he said afterwards.

Enrolment in the computer sciences program at the University of Waterloo tumbled 5.1 percent last year, compared with 2006. Overall, the school saw 408 freshmen students join the program, down from 430 a year earlier.

University representatives said the enrolment numbers still are higher than similar programs at other North American universities.

The shortage of talent “is one of the reasons why we opened an office in Vancouver,” Gates said.

Microsoft has a strategy of tapping into a global market for technical talent by setting up development centers in multiple locations.

The Vancouver location, about 120 miles north of Microsoft’s headquarters in Redmond, Wash., has the advantage of being close to the company’s main development area, but outside the United States.

“The Canadian government makes it easier to bring in smart people from various countries and create a group that’s … Canadians, Asians, Europeans, working together on software,” Gates said.

Industry watchers have pegged the period after the 2000 through 2002 technology downturn as the time when students began to move away from computer-oriented jobs in fear that the sector would be bogged down with layoffs.

But the opposite happened, said Amy Parlous, executive director of the mathematics department at the University of Waterloo.

“IT is just so pervasive in every sector now, it’s certainly not in one pocket. It’s in public policy, it’s in education, it’s in health, it’s everywhere—so there are more jobs,” Parlous said.

Turning the shortage of high-tech workers around could be a problem, especially because statistics suggest that the hole left by retiring IT workers is only speeding up the shortage.

During his speech, Gates showed his lighter side by screening a documentary-style short film in which he pokes fun at his impending retirement alongside celebrities like rapper Jay-Z and U2’s Bono.

He also fielded questions from students and recalled when he went to college in “the Dark Ages” and learned about computers on his own time.

“Fortunately for all of you, you’re in a generation where all of these courses are going to be online and basically free. I’m taking solid state physics from MIT, though MIT doesn’t know it,” he said, alluding to MIT’s pioneering OpenCourseWare project, which makes courseware available online free of charge.

“You are far more empowered in terms of your ongoing education than any other generation has ever been.”

Gates also criticized the United States government for its strict adherence to the H-1B visa, which allows American companies to bring in skilled workers from other countries temporarily, as long as they fall under a list of “specialty occupations.”

Gates called the visa the “worst disaster.”

The rules are strict and apply only to highly specialized workers.

“If I could just change one law in the U.S., it would be this,” he said.

“There should be a free flow of talent from the U.S. to Canada and Canada to the U.S. If there’s a bright person who wants a job, it shouldn’t be hard to go across the border and do that. We should make it as seamless as possible.”

Gates’ visit to the University of Waterloo came during a farewell tour he was taking before he withdraws from Microsoft’s daily operations. Gates plans to retire as Microsoft’s chief software architect in July and focus on philanthropy.

Gates visited five other universities as part of the tour: the University of Chicago, the Massachusetts Institute of Technology, the University of Texas, Stanford University, and Carnegie Mellon University.

At Carnegie Mellon, Gates predicted people will increasingly interact with computers through such means as speech and touch screens rather than by using a keyboard.

In five years, Microsoft expects more internet searches to be done through speech than by typing on a keyboard, Gates told about 1,200 students and faculty members at Carnegie Mellon.

“It’s one of the big bets we’re making,” he said during the final stop of his farewell tour.

Gates said software is proliferating into various branches of science, including biology and astronomy.

Researchers are “dealing with so much information that … the need for machine learning to figure out what’s going on with that data is absolutely essential,” he said.

Microsoft is trying to establish ties not only with university computer science departments but also with researchers in other scientific areas “to help us understand where new inventions are necessary,” Gates said.

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Microsoft Corp.

University of Waterloo

Carnegie Mellon University