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High technology employment: fast growth but few jobs.

High technology has become one of the most talked-about subjects in career counseling over the past few years. Video games, classroom computers, and optical scanners at libraries and grocery stores have brought it out of special computer centers and into the open. Naturally, speculation about employment opportunities in these fields is common. The Bureau of Labor Statistics has also studied the subject to learn if high tech promises high employment. Among the Bureau's major findings are the following:

* Employment in high tech industries increased faster than the average for all industries during the 1972-82 period.

* However, because of their small size, high technology industries accounted for a relatively small proportion of all new jobs nationwide. Nevertheless, high technology did provide a significant proportion of new jobs in some States and communities.

* Through 1995, employment in high tech industries is projected to grow somewhat faster than the average.

* High tech industries will continue to account for only a small proportion of new jobs through 1995; scientific and technical workers will account for only 6 percent of all new jobs through 1995. Defining High Tech

No definition of high technology industries has been widely accepted. For this study, therefore, employment trends were analyzed under a range of concepts, such as the utilization of scientific and technical workers, expenditures for research and development, and the nature of the industry's product. Scientific and technical workers were defined as engineers, life and physical scientists, mathematical specialists, engineering and science technicians, and computer specialists. These concepts were used to develop three sets of criteria, resulting in three different though overlapping groups of industries that could be called high tech. The definitions are given below; the industries that fit the definitions are listed in the accompanying box.

Group I high tech industries were determined on the basis of their work force. Specifically, an industry was classified as high tech if the proportion of its workers in scientific and technical fields was at least one and a half times the average for all industries. A total of 48 industries met this standard, making this the largest group. Manufacturing industries make up most of the list, along with mining, construction, transportation and public utilities, and trade and services. Twenty-eight of the industries in this group also meet the standards for inclusion in group III and some fit the definition for group II.

For inclusion in group II, industries had to have a ratio of research and development expenditures to net sales that was at least twice the average for all industries. This proved to be the smallest group, with only six industries (all of which also met the criteria for groups I and III).

For group III, inclusion was based both on the nature of the labor force and on research and development expenditures. Manufacturing industries were included if the proportion of scientific and technical workers in the industry was at least equal to the average for all manufacturing industries and the ratio of research expenditures to sales was at least close to the average for all industries. These industries, all of which also met the criterion for group I, number 26. In addition, two industries were included that provide technical support to the manufacturing industries. High Tech Industry Employment: Past Trends

Employment in high technology industries, no matter which of the three definitions is used, increased faster than all wage and salary employment between 1972 and 1982. (See chart 1.) Group II employment, however, increased significantly faster, 39.8 percent, nearly twice as fast as the 20.1 percent increase in total employment. Over the period, each group increased slightly as a percentage of total wage and salary employment.

The contribution of high tech industries to total employment growth over this period, no matter how high tech is defined, was relatively small. Group I accounted for 15.3 percent of new wage and salary jobs, group II for 4.7 percent, and group III for 7.9 percent. Nor was the growth steady. For example, when wage and salary employment declined during the 1981-82 recession, employment in group I also declined.

Within each group, individual industries experienced very different rates of growth. Computer and data processing services had the largest increase, 235.1 percent. Employment in some industries--radio and TV receiving equipment, for example--actually declined, in part because of the recession. High Tech Industry Employment: Future Trends

The Bureau's projections--which are examined further elsewhere is this issue of the OOQ--indicate that between 23.4 and 28.6 million new wage and salary jobs will be created between 1982 and 1995. Between 1.0 and 4.6 million of these jobs will be in high technology industries. Growth in group I will account for 16 to 17 percent of all new jobs, depending on the projection used, while growth in group II will account for 3 to 4 percent, and group III for 8 or 9 percent. The great majority of new jobs will be in industries other than high technology. Therefore, displaced workers and others seeking jobs, and governmental and community organizations seeking to attract jobs to their regions, would be well advised not to limit their search to high tech industries.

One additional factor may have a negative effect on the ability of high tech industries to save economically depressed industries and provide jobs for displaced workers. The occupational composition on many rapidly growing high tech industries differs significantly from other manufacturing industries that have suffered in recent years. For example, about three-fourths of the workers in the blast furnaces and basic steel industry and motor vehicles industry are blue-collar workers. These are the workers who have been displaced. However, many high tech industries, especially those with the fastest projected growth, have a much smaller proportion of their workers in these occupations. High Tech Occupations

High technology occupations have also been the subject of much concern recently, although here too data on current and projected employment and clear definitions of what occupations are being discussed have been lacking.

Occupations that clearly meet the definition of high technology workers are engineers, life and physical scientists, mathematical specialists, engineering and science technicians, and computer specialists. Most workers in these technology-oriented occupations are directly involved in developing or applying new technologies. Their work requires considerable knowledge of the theories and principles of science, engineering, and mathematics. This knowledge distinguishes these technology-oriented workers from computer operators, computer service technicians, other high tech machinery repairers, and workers who simply use word processing machines, computers, or other high technology products. Workers in the technology-oriented occupations generally have a thorough preparation in math and science in high school and need specialized post-high school education--up to the doctoral level in some cases--in some field of technology.

Technology-oriented workers, while essential to the development of technology, are relatively few in number and will account for a relatively small proportion of new jobs through 1995. In 1982, technology-oriented employment totaled 3.3 million, or about 3.2 percent of total employment. (See chart 2.) Through 1995, these occupations are projected to grow 45.3 to 49.3 percent. This is a much faster rate than the average for all wage and salary workers and would generate 1.5 to 1.6 million new jobs over the 13-year period. However, because these occupations are fairly small to begin with, they will account for only 6 percent of all new jobs. Just two low tech occupations--building custodian and cashier--could account for almost as many. Among the occupations that will generate the most new jobs within the high technology field are electrical and electronics technician, computer systems analyst, electrical engineer, and computer programmer. Local and State Employment

High technology employment is not expected to take up the slack in job generation caused by the long-term decline in heavy durable goods industries, some of which, such as motor vehicles, actually come under one of the high tech definitions. What is true for the Nation as a whole, of course, does not hold for certain States and areas. High technology employment can have a large impact on a local economy. Local success stories include California's Silicon Valley and the Route 128 area in Massachusetts and neighboring New Hampshire. In a relatively short period, these areas developed substantial industrial bases built on high technology industries.

For all three groupings of high technology industries, California has the highest employment--and by a large margin. Seven other States--New York, Texas, Massachusetts, New Jersey, Florida, Illinois, and Pennsulvania--also appear on the list of 10 States with the most high tech employment for each of the three groups. In addition, Ohio and Michigan appear on the list for group I; Connecticut and Washington, group II; and Ohio and Connecticut, group III.

The States with the largest numbers of high tech workers are generally the States with the largest nonfarm labor forces. When States are ranked according to the proportion of their nonagricultural workers in high tech industries, however, smaller States tend to rise to the top; New Hampshire, Connecticut, Vermont, and Kansas appear on all three lists, as does Massachusetts despite its size. Delaware, New Jersey, Arizona, California, and Washington appear on two lists. And Michigan, Indiana, Texas, Ohio, Utah, and Colorado are among the top ten for one group or another.

The position of Delaware when the States are ranked by employment provides an interesting example of the significance of the definition used. It leads the lists for groups I and III with 24.0 and 16.2 percent, respectively, of its nonfarm employment in high technology. However, with only 0.8 percent of its nonfarm workers employed in group II industries, Delaware is in 42nd place on that list. The variation results because groups I and II include all chemical manufacturing, a major source of jobs in Delaware; but, within the chemistry industry, only drug manufacturing meets the criterion for group II, and Delaware has little employment in that industry.

New England leads all other regions in the proportion of high technology employment under all three definitions. The New England area has provided an ideal environment for these industries. Preeminent educational institutions provide the needed skilled workers. Also, the departure of the textile and apparel industries to the South and overseas left behind a well-developed industrial infraxtructure, coupled with an awareness of the need to attract and foster new industries. In addition, the New England States (with the exception of Massachusetts) have relatively small populations, making their high technology employment more noticeable.
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Author:Riche, Richard W.; Hecker, Daniel E.; Burgan, John U.
Publication:Occupational Outlook Quarterly
Date:Mar 22, 1984
Previous Article:The economy in 1995.
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