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U.S. High-Tech Industry Adds Jobs for Second Year in a Row

30 Jun, 2007

By: Trade & Industry Development
AeA Report Says Unemployment Rate for Engineers - Including Electrical Engineers - Is Below 2 Percent in 2006

AeA, the nation’s largest trade association representing all segments of the high-tech industry, recently released its 10th anniversary Cyberstates report detailing national and state trends in high-tech employment, wages, and other key economic factors.  The report, Cyberstates 2007: A Complete State-by-State Overview of the High-Technology Industry, covers all 50 states, the District of Columbia, and Puerto Rico.


The report shows that in 2006, the high-tech industry continued growing, adding nearly 150,000 net jobs for a total of 5.8 million in the United States.  This growth is faster than the 87,400 jobs added in 2005.  These two years of growth represent an increase of four percent.

The Cyberstates report is not based on survey data or extrapolations, but on U.S. Bureau of Labor Statistics (BLS) data, which is collected from all businesses in the United States as required by law for the state unemployment insurance program.  The data on national employment, unemployment, and venture capital investments are for 2006.  The national and state wage, payroll, and establishment data are for 2005, as well as state rankings and state employment data, as a result of a nine month lag in the reporting of the data from BLS.

"In the 10 years of publishing this report, we have always used a conservative definition of the high-tech industry," said William T. Archey, President and CEO of AeA.  "We probably underestimate the size of the industry to a slight degree.  Year after year, we have illustrated how critical the high-tech industry is to the nation and to each and every state as it generates economic growth, innovation, and high paying jobs wherever it develops."

"We are pleased to see the rebounding of the tech industry," said Archey.  "This is the second year in a row that tech industry employment has added jobs.  Not only do these jobs make critical contributions to the U.S. economy, but they also pay extremely well.  The average tech industry wage is 86 percent more than the average U.S. private sector wage.  In fact, in 48 cyberstates the average high-tech wage is at least 50 percent more than the average private sector wage, and in 10 cyberstates this differential is over 90 percent."

"While we are encouraged by the pickup in tech employment, we are committed to the long term health of the industry, the economy, and our nation," continued Archey.  "We have some serious challenges ahead.  Companies of all sizes continue to have problems recruiting highly qualified and educated individuals to work for them, whether those individuals are foreign or domestic.  This was reflected in the 2.5 percent unemployment rate for computer scientists and the below 2 percent unemployment rate for engineers in 2006.  This problem is twofold: 1) the lack of American kids enrolling in and graduating from math, science, and engineering programs and 2) a U.S. high-skilled visa system that is broken.  This April, within two days of the start of taking applications, the U.S. government received 133,000 applications for 65,000 H-1B visas – those visas reserved for high skilled individuals.  And this is for jobs starting in October of 2007."

An examination of the sectors reveals that the high-tech manufacturing industry added 5,100 net jobs in 2006.  Software services and engineering and tech services employment were up in 2006 for the third year in a row, increasing by 88,500 jobs and 66,300 jobs, respectively.  Only the communications services industry continues to struggle, losing 13,300 net jobs in 2006.

On a state-by-state basis, Cyberstates2007 shows that tech employment gains occurred in 40 cyberstates in 2005, the most recent data available.  The last year that so many states saw this much tech job growth was in 2000.  While itis no surprise that California led the nation in net job creation, Florida saw the second largest gain, adding 10,900 tech jobs in 2005.  This is the second year in a row that Florida was among the top five states by tech employment creation.

An examination of the ten leading cyberstates by employment reveals that Florida was also the fastest growing state by rate of growth (+4.1 percent), followed by Virginia (+3.0 percent).

Virginia surpassed Colorado to lead the nation with the highest concentration of tech industry workers as a percent of the private sector workforce (8.9 percent).  Until now, Colorado had owned this distinction ever since AeA began publishing the Cyberstates report.

The report also found that after dropping slightly in 2005, venture capital investment in the technology industry rose by $285 million, to $12.7 billion in 2006. High tech accounts for half of all venture capital investments in the nation.  R&D expenditures by high-tech companies jumped by 22 percent in 2004, the most recent data available, totaling $70.6 billion, a record breaking amount of R&D.

This 10th edition of Cyberstates provides a comprehensive review of the high-tech industry nationally and state-by-state in terms of high-tech employment, wages, payroll, and establishments.  Cyberstates also offers data on venture capital investments and R&D expenditures.

A national and state-by-state analysis of the technology industry and international trade will appear in a forthcoming AeA report entitled Trade in the Cyberstates 2007: A State-by-State Overview of High-Tech Trade in the United States.

AeA members can purchase the report for $125; non-members for $250.  Please visit www.aeanet.org/cyberstates to purchase the report, or call 408.987.4200.

Cyberstates 2007 Key Facts
U.S. Tech Industry Adds Jobs in 2006

  • U.S. high-tech employment totaled 5.8 million in 2006.

  • Tech employment was up in 2006 by nearly 147,000 or by 3 percent.

  • This is on top of the growth of 87,000 tech jobs added in 2005.

  • High-tech manufacturing employment rose by 0.4 percent, gaining 5,100 jobs between 2005 and 2006.

  • The semiconductor industry grew significantly in 2006, gaining 10,900 jobs.

  • At the sectoral level, 5 of the 9 tech manufacturing sectors gained jobs in 2006, 4 of the sectors lost.

  • The communications services sector continued to shed jobs in 2006, losing 13,300 compared to a loss of 37,200 in 2005.

  • The software services industry added 88,500 jobs, up for the third year in a row.

  • The engineering and tech services industry added 66,300 jobs in 2006,putting it at an all time high.

  • The unemployment rate for electrical engineers was 1.9 percent in 2006 and 2.5 percent for computer and math occupations.

  • The tech industry paid an annual average wage of $75,500 in 2005, 86 percent more than the average private sector wage of $40,500.

U.S. High-Tech Employment

 

2005

2006

Percent Change

Numeric Change

Electronics Manufacturing

1,321,500

1,326,600

+0.4%

+5,100

Communications Services

1,372,300

1,359,000

-1.0%

-13,300

Software Services

1,433,300

1,521,800

+6.2%

+88,500

Engineering and Tech Services

1,500,300

1,566,600

+4.4%

+66,300

Total High Tech

5,627,300

5,773,900

+2.6%

+146,600

Note: Data are rounded.

40 Cyberstates Added Tech Jobs in 2005

  • The leading states by high-tech employment in 2005 were California (919,300), Texas (445,800), New York (299,900), Florida (276,400), and Virginia (261,000). 2005 data are the most recent available at the state level.

  • California led the nation in net tech job creation in 2005, adding 14,400 jobs. For the second year in a row Florida and Virginia were two of the fastest growing tech cyberstates. Florida was the second fastest growing state with a net increase of 10,900 jobs and Virginia was fourth with a net increase of 7,700 in 2005.

  • Of the top ten cyberstates by employment, Florida had the fastest growth rate at 4.1 percent, followed by Virginia at 3.0 percent between 2004 and 2005.

  • Virginia surpassed Colorado to lead the nation in concentration of high-tech workers in 2005,with 89 high-tech workers per 1,000 private sector workers. Until now, Colorado had owned this distinction since AeA started the Cyberstates report in 1997.

  • Forty-eight cyberstates have annual average high-tech wages that are 50 percent or higher than the average private sector wage in their respective state, and 10cyberstates have wages that are 90 percent higher.

U.S. Venture Capital Investments and R&D Expenditures Are Up

  • U.S. high-tech venture capital investments were up 2 percent or $285 million in 2006, totaling $12.7 billion.

  • Five out of seven technology sectors saw an increase in venture capital investments between 2005 and 2006. Software services was the largest sector with $5 billion in 2006.

  • High-tech R&D expenditures were up 22 percent in 2004, the most recent year available. The $71 billion in high-tech R&D accounted for 38 percent of all industry R&D.

Note: National data on high-tech employment and venture capital investments are for 2006. The state employment data are for 2005, the most recent year available at time of publication. Likewise, the data for wages, payroll, and establishments are for 2005.
Source: Cyberstates 2007 based on U.S. Bureau of Labor Statistics data.
NOTE TO EDITORS: Press releases focusing on U.S. high-tech trade and specific states were released on US Newswire and are available on AeA’s website, www.aeanet.org

 

 

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