After California and Texas, New York was the country’s largest cyberstate in 2005, employing 300,000 with a total payroll of $22.1 billion, according to the AeA’s (formerly the American Electronics Association) ninth annual “Cyberstates” report. AeA (www.aeanet.org) is the nation’s largest trade association, representing all segments of the high-tech industry. The report, “Cyberstates 2006: A Complete State-by-State Overview of the High-Technology Industry,” provides a comprehensive review of national and state trends in high-tech employment, wages, establishments, exports and other key economic factors, including data on venture capital investments and R&D expenditures. It covers all 50 states, the District of Columbia and Puerto Rico.
The report, which was released from AeA’s offices at the Albany NanoTech Complex of the NanoCollege of the University at Albany-State University of New York, ranks New York as the fourth-largest cyberstate based on high-tech exports. New York sold $9 billion in tech merchandise to the world in 2005, an 8 percent increase over the previous year. This accounted for 18 percent of overall exports from the state of New York.
“Tech industry job losses in New York slowed dramatically in 2004,” says Justin Wright, executive director, AeA New York Council. “We are seeing positive indicators for the future. With tech exports up and venture capital investments soaring by 47 percent in the Empire State, we believe we will see growth in the high-paying jobs that will drive the state’s economy in the future,” he says. To promote long-term growth of tech jobs, however, the country needs to remain focused on “the math and science education of our children, the skills of our work force [and committed to] research and development,” he notes.
Like many states, New York has suffered the largest job losses in its Internet services and telecommunications ser-vices sectors, down 2,800 and 1,700 jobs, respectively, in 2004, the report says.
Elsewhere in the Tristate
Elsewhere in the New York tristate area, New Jersey’s high-tech industry fell by a net 5,500 jobs to a total of 197,100 in 2004. High-tech job losses were mostly concentrated in telecommunications services, which lost 3,500 jobs between 2003 and 2004, the largest single sector job loss in the state during this period. Nationwide, the sector lost 35,700 jobs in the same period. The state’s high-tech sector remains vibrant, however, says Linda Klose, executive director of the AeA New Jersey-Pennsylvania Council. For example, New Jersey exported $3.3 billion in high-tech goods, helping to support an average wage of $82,500, the third-highest average wage rate in the country.
“New Jersey’s vibrant tech industry supports thousands of high-paying jobs,” said Klose. “In fact, 6 percent of the workers in the Garden State are in the tech industry. With more than $3 billion in technology exports and more than $800 million in venture capital investments, we need to do all that we can to keep our tech industry competitive. We need to focus on those factors that keep our state attractive—a highly skilled, highly educated work force. Education in math and science is crucial.”
Overall, U.S. exports of high-tech goods increased by 4 percent, from $191 billion in 2004 to $199 billion in 2005. The year 2005 was the third consecutive year in which high-tech exports grew, with increases in six of the eight industry sectors. The leading export sectors were electromedical equipment, up 13 percent from the previous year, and consumer electronics, up 12 percent.
“These data reinforce the idea that high tech is a global industry,” says William T. Archey, AeA’s president and CEO. “For American technology companies, the world is their marketplace and supply chain. Trade keeps American business strong, it supports American jobs and it serves customers around the world, all of which keep the tech industry internationally competitive. Many of the technology imports into the United States, particularly from China, Taiwan and Mexico, are intracompany transfers from U.S. production facilities overseas that ship parts and finished products back to their domestic facilities,” he says.
On a country basis, the largest markets for U.S. high-tech exports in 2005 were the European Union ($43 billion in purchases), Canada ($30 billion), Mexico ($27 billion), Japan ($13 billion), China ($10 billion) and South Korea ($9.9 billion). The fastest growing large export markets ($1 billion or more) for U.S. tech exports in 2005 were Venezuela, with a 33 percent increase in purchases from 2004; Brazil, up 20 percent; Colombia up 19 percent; Thailand, up 17 percent and India, up 15 percent.
On the other side of the trade picture, the United States imported the greatest number of high-tech products from China ($86 billion), Mexico ($38 billion), the European Union ($33 billion), Japan ($32 billion) and Malaysia ($28 billion).
Nationally, “Cyberstates 2006” shows that the high-tech industry is edging forward. High-tech employment was up by 61,100 out of 5.6 million workers in 2005, the first increase in tech jobs in four years. That’s not much to shout about, Archey says. “While we are encouraged by the positive employment trend, the technology industry is focused on the long-term health of the industry, the economy and our nation,” he says. “Tech industry employment only grew by 1 percent last year compared to 2 percent for the U.S. private sector as a whole. To promote the creation of high-paying technology jobs for the future, we need to address the competitiveness issues facing our country today; all Americans need to recognize that we live in an increasingly competitive world,” he says.
To prepare for this challenge, the country needs to invest in long-term basic research, particularly in the physical sciences, Archey says. “We need to reform our visa system so that the best and the brightest individuals come and stay in the United States, creating companies, products, wealth and jobs. And most important, we need dramatic improvements in our education system, so that our children are prepared to compete in an economy that is knowledge based and driven by technology,” he says.
U.S. High-Tech Goods Exports
(in billions of current U.S. dollars)
Industry Segment 2004 2005 % Change $ Change
Computers & $44.4 $47.4 7% $3.0
Consumer Electronics 9.1 10.2 12 1.1
Communications 22.5 24.1 17 1.6
Electronic Components 15.9 15.6 -2 -0.3
Semiconductors 48. 47.2 -2 -0.8
Industrial Electronics 33.7 34.7 3 1.0
Electromedical Equipment 12.2 13.8 13 1.6
Photonics 5.6 6.2 11 0.6
Total High-Tech Exports $191.4 $199.1 14% $7.7
Source: Cyberstates 2006
• There were 5.6 million high-tech jobs in 2005, up 61,100, or 1 percent, from 2004.
• High-tech employment declined by 44,700 jobs in 2004 and 333,000 in 2003.
• Employment in high-tech manufacturing grew by 3,300 jobs between 2004 and 2005, the first growth in this sector since 2000.
• The biggest gains in manufacturing jobs in 2004–2005 were recorded in the defense electronics industry, which added 6,300 net jobs.
• The software services industry added 43,400 jobs in 2005.
• The engineering and tech-services industry added more than 57,000 jobs in 2005.
• Venture capital invested in high tech totaled $11.8 billion in 2005, down 5 percent from 2004.
• Exports of high-tech goods totaled $199 billion in 2005, up 4 percent from 2004.
• California, Texas, New York, Florida, and Virginia led the nation in the number of people employed in high tech in 2004.
• High-tech workers earned an average wage of $73,600 (11th ranked) in 2004, an amount 45 percent higher than New York’s average private-sector wage.
• A high-tech payroll of $22.1 billion in 2004, ranked third nationwide.
• 17,800 high-tech establishments in 2004, ranked fourth nationwide.
• High-tech exports totaled $9 billion in 2005, ranked fourth nationwide
• High-tech exports represented 18 percent of New York’s exports.
• Venture capital investments were $1.1 billion in 2005, up 47 percent from $728 million in 2004.
• R&D expenditures were $13 billion in 2003, ranked fifth nationwide.
• Ranked first in photonics manufacturing employment with 9,100 jobs.
• Second in defense electronics manufacturing employment with 10,700 jobs.
• Third in R&D and testing-lab employment with 40,400 jobs.