• Since the dot-com bust reached bottom in early 2004, employment growth in the high-tech sector has outpaced growth in the private sector as a whole by a ratio of three-to-one. High-tech sector employment has also been more resilient in the recent recession-and-recovery period and in the last year. The unemployment rate for the high-tech sector workforce has consistently been far below the rate for the nation as a whole, and recent wage growth has been stronger.
• Employment growth in STEM occupations has consistently been robust throughout the last decade, outpacing job gains across all occupations by a ratio of 27 to 1 between 2002 and 2011. When combined with very low unemployment and strong wage growth, this reflects the high demand for workers in these fields.
• Employment projections indicate that demand for high-tech workers will be stronger than for workers outside of high-tech at least through 2020. Employment in high-tech industries is projected to grow 16.2 percent between 2011 and 2020 and employment in STEM occupations is expected to increase by 13.9 percent. Employment growth for the nation as a whole is expected to be 13.3 percent during the same period.
• Workers in high-tech industries and STEM occupations earn a substantial wage premium of between 17 and 27 percent relative to workers in other fields, even after adjusting for factors outside of industry or occupation that affect wages (such as educational attainment, citizenship status, age, ethnicity and geography, among others).
• The growing income generated by the high-tech sector and the strong employment growth that supports it are important contributors to regional economic development. This is illustrated by the local multiplier, which estimates that the creation of one job in the high-tech sector of a region is associated with the creation of 4.3 additional jobs in the local goods and services economy of the same region in the long run. That is more than three times the local multiplier for manufacturing, which at 1.4, is still quite high.
"This study addresses an important question: how important is hightech employment growth for the U.S. labor market? As it turns out, the dynamism of the U.S. high-tech companies matters not just to scientists, software engineers and stock holders, but to the community at large. While the average worker may never be employed by Google or a hightech startup, our jobs are increasingly supported by the wealth created by innovators. The reason is that high-tech companies generate a growing number of jobs outside high-tech in the communities where they are located. My research shows that attracting a scientist or a software engineer to a city triggers a multiplier effect, increasing employment and salaries for those who provide local services. This study confirms and extends this finding using a broader definition of the high-tech sector. It is a useful contribution to our understanding of job creation in America today."
- Enrico Moretti, Professor of Economics at the University of California, Berkeley and author of The New Geography of Jobs
This report tells a simple yet compelling story about high-tech employment and wages in the U.S. economy. First, since the bottom of the dot-com bust was reached in early 2004, employment growth in high-tech industries outpaced employment growth in the entire private sector by a ratio of three-toone.
High-tech employment has also been more resilient in the recent recession-and-recovery period and in the latest year for which data is available. The unemployment rate for the high-tech workforce has consistently been lower than for the nation as a whole.
Second, high-tech employment concentration and job growth are occurring in a geographically and economically diverse set of regions throughout the country. Beyond the well-known tech hubs that tend to coalesce around both coasts, pockets of high-tech clusters also exist throughout the Rocky Mountains, Great Plains, Midwest and South. High-tech job growth is taking place in regions across the country, irrespective of whether a tech cluster exists there. Furthermore, high-tech employment is increasingly being distributed across the country. This may be evidence that some regions are playing catch-up as technological advances allow for a wider dispersion of production in high-tech goods and services.
Third, employment in high-tech occupations, or STEM fields, has consistently been robust throughout the recent decade. When combined with very low unemployment and strong wage growth, this reflects the high demand for workers in these fields. The substantial majority of that growth was driven by gains in computer and math sciences occupations, followed by physical and life sciences occupations at a distant second. Employment in engineering and related occupations actually fell, driven by declines in jobs for workers with lower skill levels.
Fourth, employment projections indicate that demand for workers in both high-tech industries and hightech occupations will be stronger than the demand for workers outside of high-tech at least through 2020. This reflects the economic growth that is occurring within high-tech industries and the increasing demand for workers with technical skills to support that growth. Within high-tech industries, demand for STEM workers is expected to grow by two-thirds more than demand for non-STEM workers.
Fifth, workers in high-tech industries and occupations earn a substantial wage premium relative to workers in other fields, even after accounting for factors that affect wages outside of industry or occupation. The high wage levels seen in high-tech industries and STEM occupations reflect the substantial value-add that high-tech brings to production. They also reflect the high demand for workers in technical fields. As an important driver of innovation and productivity, high-tech industries are capturing a growing share of national income, which then makes its way to workers through wages.
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Future of Hampton Roads supports all entrepreneurial businesses within our region. High technology organizations are known for their economic driving capaticity and as such, often times are some of the major job creators known.
Future of Hampton Roads