Technology/R&D

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High Tech Industry Sheds More Than One-Half Million Jobs in 2002

30 Sep, 2004

By: Trade & Industry Development

A new study released by AeA shows that in 2002 the U.S. high-tech industry lost 540,000 jobs, dropping from 6.5 million to 6.0 million. A preliminary look at 2003 data shows that the decline in high-tech employment has slowed considerably. The report, AeA’s annual Cyberstates 2003: A State-by-State Overview of the High-Technology Industry, details national and state trends in high-tech employment, wages, exports, and other economic indicators.

The sector with the largest decrease in jobs was electronics manufacturing, accounting for more than half of all tech jobs lost between 2001 and 2002. For the first time in the seven years of publishing Cyberstates, the software sector recorded a loss of nearly 150,000 jobs last year. Indeed, the once-thriving software sector posted large increases in employment in all previous editions of Cyberstates. The communications services sector posted a similar loss of jobs. The engineering and tech services sector lost 15,000 jobs in 2002. The one bright spot was in R&D and testing labs, where employment increased by 7,000 in 2002.

"While high-tech employment fell by eight percent last year, preliminary 2003 data show a significant slowdown in high-tech job losses, with a decline of four percent," said AeA’s President and CEO William T. Archey. "We project that the 2003 high-tech job losses will total 234,000--down 57 percent from the 540,000 decline in 2002."

Archey further stated, "However, these declines have caused us to pause about two important issues. We are aware of current budget constraints, but now is not the time to cut back on education, particularly in math and science. We need a world class workforce to deal with world class challenges. Our second concern is the decline in basic research, particularly in technology, by the federal government. We worry that we have eaten the seed corn of federal research of 20 and 30 years ago that is not being replenished."

For the first time, Cyberstates 2003 is based on the newly implemented North American Industry Classification System (NAICS). AeA selected 49 NAICS codes to define the high-tech industry. They fall into four broad categories: electronics manufacturing, communications services, software, and engineering and tech services. This more current and comprehensive system allows us to capture several sectors which we could not with the previous system. These include fiber optic cable manufacturers, semiconductor machinery manufacturers, and web search portals.

Cyberstates 2003 found that all but three states lost high-tech jobs in 2002. California lost the greatest number of tech jobs, shedding some 123,000 jobs. Texas was second with tech jobs down by 61,000 jobs. Interestingly, the District of Columbia, Wyoming, and Montana were the only three cyberstates to add technology jobs between 2001 and 2002.

This seventh annual edition of Cyberstates provides a comprehensive review of the high-tech industry nationally and by state of high-tech employment, wages, payroll, establishments, and exports. Cyberstates also offers data on venture capital investments, R&D expenditures, and home computer and Internet use.

Advancing the business of technology, AeA is the nation's largest high-tech trade association, representing more than 3,000 companies with 1.8 million employees. With 17 regional U.S. councils and offices in Brussels and Beijing, AeA offers a unique global policy grassroots capability and a wide portfolio of valuable business services and products for the high-tech industry. AeA has been the accepted voice of the U.S. technology community since 1943.

Cyberstates 2003 is available to AeA members for $95 and to non-members for $190. Contact AeA at 800.284.4232 or 408.987.4200, or www.aeanet.org.  Cyberstates 2003 is part of AeA’s cyber report series which includes Cybernation 2.0, CyberEducation 2002, and Cybercities.

Cyberstates 2003 Key Facts

U.S. Tech Employment Fell Significantly in 2002

• U.S. high-tech employment totaled 6.0 million in 2002, down 8 percent from 6.5 million in 2001

• Preliminary 2003 data show that high tech will lose 234,000 jobs, a 4 percent decline

• High-tech manufacturing industry employment fell by 13 percent, losing 233,000 jobs between 2001 and 2002

• The biggest 2001-2002 manufacturing job losses were recorded in electronic components (-76,000), communications equipment (-47,000), and semiconductors (-41,000)

• The communications services and software sectors each shed 146,000 jobs from their payrolls

• Engineering and tech services dropped by 15,000 jobs

• R&D and testing labs added 7,000 jobs in 2002

Cyberstates Employment Figures 2002

• Employment: California (995,000), Texas (479,000), New York (330,000), Florida (271,000), and Massachusetts (256,000) led the nation in high-tech employment

• Significant Losses of Tech Jobs: California (-123,000), Texas (-61,000), Massachusetts (-40,000), New Jersey (-29,000), and New York (-28,000)

• Gains in Tech Jobs: The District of Columbia (+2,200), Wyoming (+500), and Montana (+100)

• Colorado led the nation in concentration of high-tech workers in 2002, with 98 high-tech workers per 1,000 private sector workers, followed by Massachusetts, Virginia, New Mexico, and Maryland

 

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