High Tech Jobs Rebounding

By Allen Bernard

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After years of ho-hum job growth the U.S. tech sector is once again a good industry for job seekers.

According to a report from AeA (formerly the American Electronics Association), the nation’s largest trade association representing all segments of the high-tech industry, 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. HB/1 Visa holders are included in the totals since the report looks at job growth, not the nationality of who is holding those jobs.

This is still hasn't made up for the total number of jobs lost in the "lean years" of 2000-to-2003 or so, said Josh James, senior research manager and co-author of the report, but it's a very start.

"It's about a quarter of what was lost from the peak; we've got about a quarter of that back," said James. "We're very optimistic … now that the industry has turned a corner we think growth could be very high in the years to come but only if companies are able to get the workforce they need to grow and expand."

The 10th annual Cyberstates 2007: A Complete State-by-State Overview of the High-Technology Industry report covers all 50 states, the District of Columbia, and Puerto Rico.

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.

AeA defines the high-tech industry as four sectors: high-tech manufacturing (semi-conductors, computers, etc.); software services (software vendors, SaaS providers, system architects, etc.); communications services (mostly telecom); and engineering and technical services (SI firms, R&D labs, etc.).

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.

"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, said William Archey, AeA president and CEO in a statement.

"The average tech industry wage is 86% more than the average U.S. private sector wage. In fact, in 48 cyberstates the average high-tech wage is at least 50% more than the average private sector wage, and in 10 cyberstates this differential is over 90%."

The average tech-industry wage is $75,500, said James.

Pros & Cons

But with the increase in opportunities, said Archey, 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% unemployment rate for computer scientists and the below two percent unemployment rate for engineers in 2006. This problem is two-fold: The lack of American kids enrolling in and graduating from math, science, and engineering programs and 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.

State by State

On a state-by-state basis, Cyberstates 2007 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 it is 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%). 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% in 2004, the most recent data available, totaling $70.6 billion, a record breaking amount of R&D.

Cyberstates 2007 Key Facts

  • U.S. high-tech employment totaled 5.8 million in 2006.
  • The semiconductor industry grew significantly in 2006, gaining 10,900 jobs.
  • 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% in 2006 and 2.5% for computer and math occupations.
  • The tech industry paid an annual average wage of $75,500 in 2005, 86% more than the average private sector wage of $40,500.