The telecommunications industry faces a demographic shift that threatens to undermine its capacity for radical innovation.
While much attention focuses on technological disruption and competitive pressures, a more insidious problem is rooted within the executive suites and engineering departments of telecoms providers worldwide: an aging workforce whose career incentives increasingly misalign with the industry’s need for transformational change.
(Note: this article is based on a TelcoForge report “Structural Bottlenecks to Telco Innovation” reporting the thoughts of executives under Chatham House Rules. For this and other reports in the series please visit our reports page)
The Demographic Time Bomb
The numbers paint a stark picture of an industry in demographic transition. According to recent analysis of telecoms employees in the USA by the Economic Policy Institute, the share of workers aged 55 and over in telecommunications has increased to almost 20% of the workforce, while the average age of staff is 43 years old.
This isn’t a uniquely US problem, however, as work by the TM Forum has shown. This aging trend sits within a broader context where the college-aged population is declining, with enrolment cliffs projected to impact universities in 2025 and beyond—precisely when the industry needs fresh talent most.
The implications extend far beyond simple succession planning. As one senior executive candidly revealed:
“I’ve heard a CISO of a major telco telling me, ‘I’m not dealing with that quantum stuff because it all sounds like science fiction. And even if you’re right and this will be a danger for us, I will be retired at that time, so I don’t care.'”
This sentiment, while extreme, highlights a fundamental disconnect between individual incentives and industry imperatives.
The Experience-Innovation Paradox
The telecommunications industry’s reliance on experienced professionals creates a peculiar innovation paradox. These are individuals who have spent decades building telecoms networks that, by and large, function reliably. Their expertise is undeniable, but their relationship with change is complex. As one industry observer noted:
“Basically the guy who designed the network and laid the network many years back is still there saying ‘Things are working. Let it work as it is!’ Nobody wants to change it, though new technologies or new services are getting added.”
This dynamic creates a psychological attachment to existing systems that transcends mere risk aversion. Senior professionals have built their reputations on creating networks that operate reliably and stably. Introducing radical change can introduce risks which threaten to undo that personal reputation and achievement as well as damaging the company.
The conservative mindset this fosters manifests in operational approaches that favour incremental layering of new elements over transformational replacement. Rather than embracing new architectures, the industry tendency is to add new capabilities atop existing infrastructure. While this approach reduces immediate risk, it creates technical debt that compounds over decades.
Ironically, while this burden of multiple legacy systems is often cited as a reason for high operational costs and low business agility, it is also incredibly human to be risk-averse in an industry where failures are very public and are punished.
The Innovation Hallucination
The intersection of career stage and innovation appetite creates particularly problematic dynamics at senior levels.
Consider the executive who chooses not to invest in quantum-safe communications or edge computing infrastructure because the payoff horizon extends beyond their expected tenure. This might seem obviously problematic and likely to receive criticism. There is a second, more feasible scenario, however.
What if that same executive, instead, makes a show of investigating the new phenomenon or investing in it half-heartedly? They might rationalise this on the basis that they have seen many hyped technologies come and go, or that they will keep a ‘watching brief’ and see what outcomes first-movers elsewhere in the industry see. They might even run some trials.
From an individual perspective, this makes perfect sense, as it enables them to be seen as keeping up with innovation while it opens them up to negligible risk. From an industry perspective, it represents a systemic bias against necessary long-term investments as everyone waits for somebody else to move first.
Meanwhile, the companies offering radical innovations run out of funding while they wait for customers.
The Vanishing Pipeline
Perhaps more concerning than the aging of current leadership is the collapse of the talent pipeline feeding the industry. Academic programmes in telecommunications engineering face a crisis, with some graduate programmes reporting a two-thirds decline in enrolment since the COVID-19 pandemic.
This shortage reflects broader trends in engineering education. The Information Technology and Innovation Foundation reports that the share of students graduating with electrical engineering degrees has declined significantly, undermining the foundation of innovation in the United States.
Given that telecommunications innovation has historically emerged from academic research environments, this represents a structural threat to the industry’s innovative capacity.
The decline is particularly acute at the graduate level, where the next generation of industry leaders would traditionally emerge. Universities report struggling to fill programmes despite being well-funded and well-regarded. Again, this is a global phenomenon. Reports out of Europe, India, and even countries like Nepal are following the same progression.
The reason appears clear: students recognise greater opportunities in adjacent fields, particularly artificial intelligence and software development, where career prospects and compensation packages often exceed what traditional telecommunications can offer.
The Succession Challenge
The demographic shift creates succession planning challenges that extend beyond simple replacement of personnel. The institutional knowledge held by senior professionals is often tacit rather than explicit, embedded in relationships and understanding of complex systems rather than documented processes. When these individuals retire, they take with them not just experience but entire networks of knowledge and networks of relationships.
Moreover, putting younger professionals into senior roles means that succession often involves promoting individuals who lack the breadth of experience. If this sounds risky, it is.
Bear in mind that many of the people in leadership positions today were also senior during the 2000s but a good deal younger. They lived through the rise of mobile telephony, the dot-com bust, the rise of Huawei and ZTE, the creation of smartphones and the app economy, and a huge amount of market consolidation especially in the 3G era. In their sixties now, they carry the lessons of mistakes made by CEOs back then. Can someone in their forties today say the same?
Probably not. Which means that there is a chance of repeating the same types of mistake made back then. This is, ultimately, the dilemma of leadership, paralysis or risk.
The Path Forward
Addressing the innovation implications of workforce demographics requires acknowledging that the challenge extends beyond simple recruitment – although that is certainly a major issue in itself.
We need to create incentive structures that reward long-term thinking even among executives with short remaining tenures. This might involve adjusting compensation packages to include longer-term performance metrics or creating advisory roles that allow experienced professionals to contribute to innovation while reducing their operational risk exposure.
Equally important is rebuilding the academic pipeline through partnerships that make telecommunications careers attractive to young engineers. This requires not just funding for research programmes but creating clear pathways from academic research to industry leadership that can compete with opportunities in adjacent technology sectors.
The telecommunications industry stands at a demographic inflection point. It won’t be long before we reach a period Colt CEO Keri Gilder has described as “The Great Retirement.” The combination of aging leadership, declining academic enrolment, and structural incentives toward conservatism creates a perfect storm for innovation stagnation.
The question is not whether change is necessary—external pressures from national security requirements to hyperscaler competition make that clear. The question is whether the industry can align its human capital with the innovation imperatives that its survival demands.
The human angle is just one element we explored in our recent Leaders Meeting. If these issues have struck a chord, you might value the full report available to download on TelcoForge’s reports page.
Featured image by Amazon
