Week of August 5, 2002
  Snapshot from the Field
Industry Expansion Slows
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'Cyberstates 2002' (pictured above) is the sixth annual report released by the American Electronics Assn.
AEA Report: California, Kansas Top 2001
High-Tech Job Growth

by JACK LYNE, Site Selection Executive Editor of Interactive Publishing

WASHINGTON, D.C.California, Kansas, Virginia, Oregon and New Jersey were the big winners in 2001 in U.S. high-tech job growth.
        Those states ranked as the tech sector's top five for employment growth during 2001 (see accompanying chart), according to the new Cyberstates 2002 report from the American Electronics Assn. (AEA at www.aeanet.org). Released in late July, the report outlines national and state high-tech trends, including looks at 2001's changes in employment, wages and exports. (Editor's note: For more on high-tech location strategies, see the Semiconductors and Advanced Manufacturing Industry Review in the September Site Selection.)
Software was the driver in 2001's high-tech job growth, according to 'Cyberstates 2002'.

        2001 was obviously a down year for the tech sector, as reported by AEA, the largest U.S. high-tech trade association. To the surprise of some observers, however, the industry as a whole added 85,000 jobs last year.
        Some areas fared particularly well amid the industry slump. For example, Cyberstates 2002's top five states - which included some of the usual suspects, as well as some less patently predictable - accounted for almost one-third of last year's tech-sector job growth.
        Though home to many of the industry giants hit hardest by the slump, California ranked far and away as 2001's state leader in adding high-tech jobs. The Golden State's total tech-sector employment increased last year by 12,400 new jobs, almost twice as many new positions as any other state, AEA reported. With those additions, California finished 2001 with 998,000 total high-tech jobs, which more than doubled any other state's sum.
2001's Top States
in High-Tech Job Growth
StateNew Jobs Added
During 2001
1. California12,400
2. Kansas6,800
3. Virginia4,300
4. Oregon4,200
5. New Jersey3,900
Source: The American Electronics Assn.'s Cyberstates 2002 report.

        Kansas finished as the No. 2 state in tech-sector job growth, adding 6,800 positions in 2001, said Cyberstates 2002 . Virginia, which added 4,300 jobs, was 2001's No. 3 state, closely followed by No. 4 Oregon, which added 4,200 positions. New Jersey, with 3,900 new jobs in 2001, rounded out the report's top five states in high-tech job increases. Overall, however, the AEA report documented a substantial slowing in the growth of tech-sector jobs. Total U.S. high-tech employment stood at 5.6 million workers at the end of 2001, Cyberstates 2002 noted. That marked only a 1 percent increase from 2000. By comparison, high tech as a whole grew by 9 percent during 2000, according to the AEA.

Software, Computer-Related Services
Drive 2001's Increase in Tech-Sector Jobs

AeA The software and computer-related services segment drove 2001's high-tech job growth virtually single-handedly, according to the AEA report. Software and computer-related services added 96,700 jobs last year. That figure alone was some 14 percent higher than the 2001 job-growth total for the entire U.S. high-tech sector.
Top States in
Total High-Tech Jobs
StateTotal High-Tech Jobs
at Yearend 2001
1. California998,000
2. Texas460,000
3. New York364,900
4. Massachusetts252,400
5. Florida239,000
Source: The American Electronics Assn.'s Cyberstates 2002 report.

        That finding, AEA President and CEO William Archey explained, continued an industry theme that began to take root in the mid-1990s.
        "The 2001 data vividly demonstrate a trend that began about seven years ago - namely that the high-tech industry is increasingly dominated by the software sector in terms of jobs and innovations," Archey said. "Since 1995, manufacturing jobs have increased by 46,000, while software and computer services jobs have increased by 1.2 million."
        Software, in fact, is the catalyst for growth a broad range of tech-sector segments, he added. "Software industry innovation now permeates all other high-tech sectors, including hardware design and manufacturing," Archey said.
        California, the U.S. leader in total high-tech employment, echoes that trend. The state's work force includes some 206,500 jobs in software services - about one-fourth of California's total employment in the tech sector.

Trends in Brief

Here's a capsule look at some of the other findings from the report from the AEA, which has more than 3,500 member firms.
        Salary levels: While the tech sector's job growth has slowed from the rapid pace registered in previous years, the industry continues to be a well-paying business. The average U.S. high-tech worker now earns some US$61,275 a year.
        Top states in total high-tech employment: Texas ranked No. 2 after California at yearend 2001, with the Lone Star State recording total high-tech employment of 460,000 workers. New York ranked No. 3, with 364,900 tech-sector jobs, followed by No. 4 Massachusetts, with 252,400, and No. 5 Florida with 239,000.
        Top state in high-tech density: Though not listed among Cyberstates 2002's top overall finishers in raw job growth, Colorado ranked No. 1 in tech-sector concentration. The state recorded 98 high-tech workers for every 1,000 private-sector workers in Colorado's overall economy, the report said.
        States with largest total tech-sector job losses: Though No. 2 in overall employment, Texas lost the greatest number of tech jobs last year, with its tally dropping by 3,000 workers according to Cyberstates 2002. With a decline of 2,900 jobs, Minnesota had the second highest job-loss total in high-tech employment. At No. 3 was South Dakota, with 2,100 fewer jobs, followed by No. 4 Indiana, with 1,900 fewer, and No. 5 Utah, with 1,700 fewer.
        Overall, however, 30 states actually registered increases in total high-tech employment during 2001, Cyberstates 2002 reported.
        U.S. high-tech exports in 2001: U.S. high-tech exports last year fell to $189 billion, a decrease of some 15 percent from 2000's total of $223 billion. Electro-medical equipment was the lone high-tech segment that registered an increase in exports between 2000 and 2001, according to Cyberstates 2002.
        Even with the drop, though, high-tech exports accounted for 26 percent of all U.S. exports in 2001. California was the top high-tech importer last year, with a tally of $56 billion. That figure, said Cyberstates 2002, represented 52 percent of the state's total exports in 2001.

sf0805bsf0805b ©2002 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.