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

WASHINGTON, DC  – April 2, 2008 – AeA, the nation’s largest high-tech trade association, today released its 11th annual Cyberstates report detailing national and state trends in high-tech employment, wages, and other key economic factors for all 50 states, the District of Columbia, and Puerto Rico.  The report, Cyberstates 2008: A Complete State-by-State Overview of the High-Technology Industry, shows that in 2007, the high-tech industry continued growing, adding 91,400 net jobs for a total of 5.9 million in the United States.  This is on top of job gains of 139,000 in 2006 and 87,400 in 2005.

While we are certainly pleased to report that the technology industry added jobs nationally and across nearly every state, national tech growth slowed in 2007, making the story good but not great,” said Christopher Hansen, President and CEO of AeA.  “Tech jobs make critical contributions to the U.S. economy in terms of innovation, and pay extremely well – the average tech industry wage is 87 percent higher than the average private sector wage.  In 47 cyberstates the average high-tech wage is at least 50 percent higher than the average private sector wage, and in four cyberstates this differential is over 100 percent.  While these are the types of jobs every state wants to attract, the labor market remains tight, with unemployment rates below two percent across many tech occupations.

An examination of the sectors reveals that software services added 82,600 jobs in 2007, up for the fourth year in a row.  Engineering and tech services added 45,800 jobs in 2007, also up for the fourth year in a row, putting it at an all time high.  On the downside, high-tech manufacturing lost 29,800 net jobs in 2007.  Seven of the nine tech manufacturing sectors lost jobs in 2007.  Only the defense electronics and electromedical equipment sectors added jobs.  The communications services sector continued to shed jobs in 2007, albeit at a slower pace, losing 7,200 compared to a loss of 16,900 in 2006.

“AeA is concerned that future growth is being jeopardized unless the United States prepares itself for a vastly more competitive global marketplace,” continued Hansen.  “The tech industry and the country risk an impending slide in U.S. global competitiveness, caused by negligence on the part of our political leaders to adequately invest in scientific research, improve our education system, and allow the best and brightest from around the world to work in the United States.”

“AeA was proud to have been instrumental in promoting legislation that became the America Competes Act, which overwhelmingly passed through Congress and was signed into law in August 2007,” concluded Hansen.  “This Act offers a number of creative solutions for reinvesting in research and education.  But the bill only authorized these measures – no funding was provided for this legislation.  We call on policymakers to fully fund the America Competes Act in 2008.”

On a state-by-state basis, Cyberstates 2008 shows that 48 cyberstates added jobs in 2006, the most recent data available.  California led the nation, adding 21,400 net jobs.  The next largest net gains in tech employment between 2005 and 2006 occurred in Texas (+13,700) and Virginia (+ 9,800).  Rounding out the top five were New Jersey (+8,500) and New Mexico (+6,700).

For the second straight year, Virginia led the nation in concentration of high-tech workers in 2006, with 91 high-tech workers per 1,000 private sector workers.  Until 2005, Colorado had owned this distinction since 1998.  Massachusetts ranked second in 2006, with 87 high-tech workers per 1,000 private sector workers.  Colorado was third, with 83 tech workers per 1,000 private sector workers.

The report also found that for the second straight year, venture capital investments in the technology industry rose, adding $945 million or six percent in 2007, for a total of $16.9 billion.  High tech accounts for 58 percent of all venture capital investments in the nation.  R&D expenditures by high-tech companies jumped by six percent in 2005, the most recent data available, totaling $74.9 billion, 37 percent of total U.S. industry R&D expenditures.

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.  These statistics are based on U.S. Bureau of Labor Statistics (BLS) data, which are collected from all businesses in the United States.  The data on national employment, unemployment, and venture capital investments are for 2007.  The national and state wage, payroll, and establishment data are for 2006, 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.  The report contains seven chapters as well as over 40 pages of detailed appendices.

Two other major AeA cyber reports are forthcoming that analyze the U.S. high-tech industry: Cybercities 2008: An Overview of the High-Technology Industry in the Nation’s Top 60 Cities, and Trade in the Cyberstates 2008: A State-by-State Overview of High-Tech International Trade.
 
AeA members can purchase the report for $125; non-members for $250.  Please visit www.aeanet.org/cyberstates for more information, or call 408.987.4200.

Cyberstates 2008 Key Facts

U.S. Tech Industry Adds Jobs in 2007

• U.S. high-tech employment totaled 5.9 million in 2007.
• Tech employment was up in 2007 by 91,400 or by 1.6 percent.
• This is on top of the growth of 139,000 in 2006 and 87,400 in 2005.
• High-tech manufacturing employment fell by 2.3 percent, losing 29,800 jobs between 2006 and 2007.
• The semiconductor industry lost the most jobs of any manufacturing sector, 12,500 in 2007.
• At the sectoral level, seven of the nine tech manufacturing sectors lost jobs in 2007.  Only the defense electronics and electromedical equipment sectors added jobs.
• The communications services sector continued to shed jobs in 2007, albeit at a slower pace, losing 7,200 compared to a loss of 16,900 in 2006.
• The software services industry added 82,600 jobs in 2007, up for the fourth year in a row.
• The engineering and tech services industry added 45,800 jobs in 2007, also up for the fourth year in a row, putting it at an all time high, although this represents fewer jobs than the 72,200 added in 2006.
• The unemployment rate for electrical engineers was 1.0 percent in 2007 and 2.2 percent for computer and math occupations.
• The tech industry paid an annual average wage of $79,500 in 2006, 87 percent more than the average private sector wage of $42,400.

U.S. High-Tech Employment

                                                2006                  2007         Percent Change     Numeric Change
Electronics Manufacturing         1,320,100         1,290,400         -2.3%                    -29,800
Communications Services         1,355,400         1,348,200         -0.5%      &n
bsp;              -7,200
Software Services                     1,518,300         1,601,000         +5.4%                    +82,600
Engineering and Tech Services     1,572,500        1,618,200         +2.9%                 +45,800
Total High Tech                         5,766,300            5,857,700     +1.6%                     +91,400

Note:  Data are rounded.

48 Cyberstates Added Tech Jobs in 2006

• The leading states by high-tech employment in 2006 were California (940,700), Texas (459,500), New York (300,500), Florida (282,100), and Virginia (270,800).  2006 data are the most recent available at the state level.
• California led the nation in net tech job creation in 2006, adding 21,400 jobs.
• The next largest net gains in tech employment between 2005 and 2006 occurred in Texas and Virginia, adding 13,700 and 9,800 respectively.  Rounding out the top five were New Jersey (+8,500) and New Mexico (+6,700).
• For the second straight year, Virginia leads the nation in concentration of high-tech workers in 2006, with 91 high-tech workers per 1,000 private sector workers.  Until 2005, Colorado had owned this distinction since AeA started the Cyberstates report in 1997.
• Forty-seven cyberstates have annual average high-tech wages that are 50 percent or higher than the average private sector wage in their respective state, and four cyberstates have wages that are 100 percent higher.

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

• U.S. high-tech venture capital investments were up six percent or $945 million in 2007, totaling $16.9 billion, accounting for 58 percent of all venture capital investments.
• Five out of the eight technology sectors saw an increase in venture capital investments between 2006 and 2007.  Software services was the largest sector with $5.3 billion in 2007.
• Venture capital investments in medical devices and equipment grew the fastest, by 40 percent in 2007.
• High-tech R&D expenditures were up six percent in 2005, the most recent year available.  The $75 billion in high-tech R&D accounted for 37 percent of all industry R&D.

Source:  Cyberstates 2008 is based on U.S. Bureau of Labor Statistics data.

NOTE TO EDITORS: Press releases focusing on over 30 specific states were released on US Newswire and are available on AeA’s website, www.aeanet.org

About AeA

AeA, founded in 1943, is a nationwide trade association that represents all segments of the technology industry and is dedicated solely to helping our members’ top line and bottom line. We do this in partnership with our small, medium, and large member companies by lobbying governments at the state, federal, and international levels, providing access to capital and business opportunities, and offering select business services and networking programs.  For more information, please visit www.aeanet.org.