Job Losses in Tech Industry Decline in 2010: Report

The state-by-state data from TechAmerica Foundation reveal that only eight states added tech jobs in 2010.

The U.S. high-tech industry lost 115,800 net jobs in 2010, for a total of 5.75 million workers, according to TechAmerica Foundation's 14th annual Cyberstates report detailing national and state trends in high-tech employment, wages, and other key economic factors. This 2 percent decline in tech industry employment was less than half the 249,500 jobs lost in 2009, which followed several years of sustained growth. The report noted that from 2007 to 2010-the span of the economic downturn-the tech industry fared better than the private sector as a whole, with a 4 percent decline in employment, versus a 7 percent decline in the private sector.

"Of the four high-tech sectors highlighted in our report, only software services added jobs in 2010-22,800, a 1 percent gain," said Robert Bennett, chairman of the TechAmerica Foundation. "Of the jobs lost, 72,100 were in communications services, 53,600 were in tech manufacturing, and 12,900 were in engineering and tech services. Fortunately, the initial numbers for 2011 look more promising in terms of job growth."

The TechAmerica Foundation also released a midyear jobs report for 2011 based on a different monthly data set from the U.S. Bureau of Labor Statistics. This report shows that between January and June 2011, the tech industry added a net 115,000 jobs, a 2 percent gain, not adjusted for seasonality. During this period, job growth occurred in all four technology industry sectors, with the fastest growth in engineering and tech services. A 12-month review of June 2010 in comparison with June 2011 also shows growth in three of the four tech industry sectors, with job losses occurring in communication services.

"Tech jobs were down in 2010, trending with the rest of the economy, but we have fared better than the private sector as a whole over the course of the economic downturn, and there are some positive signs for 2011, said Phillip Bond, president and CEO of TechAmerica. "We are poised not only to grow our own industry but to support the growth of the economy as a whole. The key to growth is to support what we call the Four T's: technology, talent, tax and trade."

Bond said the country needs robust federal investment in basic research to create the scientific base that companies can use to produce new products and innovations and needs to invest in science, technology, engineering and mathematics (STEM) education to provide the next generation with the foundation in math and science. Bond also recommended reforming the tax system to make capital welcome and enable the U.S. to better compete against countries that are aggressively implementing tax policies that lower the cost of business. He also called for opening new markets to U.S. products and services.

The state-by-state data reveal that only eight states added tech jobs in 2010. The largest gains occurred in Michigan (adding 2,700 jobs), the District of Columbia (adding 1,400 jobs), West Virginia (adding 400 jobs), Utah (also adding 400 jobs) and South Carolina (adding 300 jobs). The District of Columbia saw the fastest job growth in 2010 at 4.3 percent, albeit from a small base.

For the sixth straight year, Virginia led the nation with the highest concentration of tech workers: 98 of every 1,000 private-sector workers in the state were employed in the tech industry. Massachusetts and Colorado ranked second and third, respectively. The report relies on data from the U.S. Bureau of Labor Statistics and provides 2010 national and state-by-state data on high-tech employment, wages, establishments, payroll, wage differential and employment concentration.