High technology employment, 14 percent of total employment, is projected to grow much faster than in the past due to employment gains in high-tech services and among suppliers to computer and electronic components manufacturers
High technology enjoys high visibility. Industry developments are tracked closely in the United States and abroad and the implications for productivity, international competitiveness, national defense, and the general standard of living are of increasing interest.(1) This statement, presented in a 1983 Monthly Labor Review article, is still true, as is clear from a number of recent pronouncements. For example, according to the testimony of Alan Greenspan, Chairman of the Federal Reserve Board, dramatic improvements in computing power and communication and information technology are resulting in higher rates of productivity growth and higher real wages, and are helping to control costs.(2) Also, a 1998 National Science Foundation report describes the success of U.S. high-tech industries in foreign markets.(3) Other recent publications report that biotechnology is revolutionizing medicine, agriculture, and environmental fields; miniaturization and new materials are likely to bring major changes in manufacturing, and automobiles are incorporating even more advanced technology.(4) These developments, which suggest that high technology is creating many jobs in the economy, prompted this review of employment trends.
Three previously published articles in the Review presented definitions of high-technology industries and occupations and analyzed employment trends and projections.(5) Based on current data, this article updates the lists of
high-tech industries used in those articles. It also uses an expanded concept of high-tech employment consisting of three categories. The first category, similar to the earlier concept used by the Bureau of Labor Statistics, includes all employment in industries defined as high technology. The second category includes employment in non-high-tech industries, generated by the purchases of goods and services by high-tech industries for use as inputs to their production processes. This high-tech-generated employment is included because it, like employment in high-tech industries, is derived from the demand for the goods and services produced by high-tech industries.
The third category is an effort to account for the substantial high-tech activity in industries that do not qualify, based on generally accepted criteria, as high tech, or are not suppliers to high-tech industries. While it is not possible to identify all employment in high-tech activities, it is possible to count employment of all scientists, engineers, and technicians--workers who create and apply new technologies--regardless of their industry of employment. This category, therefore, includes all scientists, engineers, and technicians in non-high-tech industries, except for those already included because of employment generated by purchases of high-tech industries.(6)
Based on this concept, this article identifies the number of workers employed in high-tech activities in 1996. It also shows high-technology employment in 1986, its projections for 2006, and its growth over the 1986-96 and 1996-2006 periods. Because high tech is often depicted as a source of "good jobs," information also is presented on earnings in high-tech industries and occupations. Much of the data in the analysis is based on information developed by BLS in producing the 1996-2006 employment projections. Those projections are published in a series of articles in the November 1997 Monthly Labor Review.(7)
Definitions and data
The term "high tech" is used very broadly to describe not only industries, but also occupations and products. There is fairly wide agreement on the general characteristics of high-technology industries and the criteria for developing lists of such industries. A good example is a document from the Congressional Office of Technology Assessment.(8) It describes high-technology firms as those "that are engaged in the design, development, and introduction of new products and innovative manufacturing processes, or both, through the systematic application of scientific and technical knowledge." This document also points out that high-technology firms typically use state-of-the-art techniques, and, in terms of quantifiable resources, such firms devote a "high" proportion of expenditures to research and development and employ a "high" proportion of scientific, technical, and engineering personnel. A National Science Foundation report on science and technology resources also refers to the employment of scientists, engineers, and technicians and measures of research and development activities as "two of the most important parameters of innovation," and uses them "as surrogates for measuring the broader concept of innovation.(9)
Despite general agreement on the concepts of high tech, there is no general acceptance of precisely which industries to include, because identifying "new" products or "innovative" manufacturing processes and associated industries is very subjective. One approach, adopted by the Bureau of the Census, uses the judgment of industry analysts to identify products embodying new or leading-edge technologies falling within 10 advanced technology areas.(10) A more widely used approach has been to list high-tech industries based on two broad measures of resources used--employment of scientific and technical personnel and research and development intensity. In this approach, studies specify criteria for these measures, such as a specific percent of total employment in scientific and technical occupations and research and development spending, or both, as a percent of sales or value added. Industries that meet those criteria are identified as high tech.(11) This article uses the latter procedure. It uses data on the proportion of employment in an industry accounted for by scientific, technical, and engineering personnel and on the proportion of employment in an industry accounted for by scientific, technical, and engineering personnel engaged in research and development.(12)
Identifying high-tech employment
High-technology occupations are scientific, technical, and engineering occupations, the same group of occupations used to define high-tech industries. They include the following occupational groups and detailed occupations: engineers; life and physical scientists; mathematical specialists; engineering and science technicians; computer specialists; and engineering, scientific, and computer managers. Individuals who are employed in these occupations are collectively referred to as technology-oriented workers.(13) Workers in these occupations need in-depth knowledge of the theories and principles of science, engineering, and mathematics, which is generally acquired through specialized post-high school education in some field of technology--ranging from an associate degree to a doctorate. Some technology-oriented workers engage in research and development to increase scientific knowledge, or to develop products and production processes. Other technology-oriented workers apply technology in other work activities, such as in design of equipment, processes, and structures; computer applications and systems development; sales, purchasing, and marketing; productions and operations; and management and administration.(14)
Occupational Employment Statistics survey data were used in the analysis. This survey provides data on occupational employment of wage and salary workers by industry. It covers all industries except agriculture (minus agricultural services which are covered), forestry, fishing, private households, and the Federal Government. The survey also provided data on occupational employment of workers in research and development for all occupations defined in this article as technology oriented, plus communication, transportation, and utilities operations managers; industrial production mangers; all other managers and administrators; social scientists; most health occupations; and the residual category all other professional, paraprofessional, and technician occupations. These data were collected for mining, construction, manufacturing, communications, public utilities, education, health, and some other service industries. Data are from 1993, 1994, and 1995 Occupational Employment Statistics surveys.(15) Estimates for most industries are for the three-digit industry group level in the 1987 edition of the Standard Industrial Classification Manual.(16)
For this analysis, industries are considered high tech if employment in both research and development and in all technology-oriented occupations accounted for a proportion of employment that was at least twice the average for all industries in the Occupational Employment Statistics survey. (Industries with employment of less than 30,000 were excluded from the analysis because of their small size and because data are not available to calculate employment generated by their purchases). Twenty-nine industries, 25 in manufacturing and 4 in the services division, met both criteria.(17) (See table 1.) These industries have at least 6 research and development workers per thousand workers and 76 technology-oriented workers per thousand workers. A subset of 10 high-tech industries, those with both ratios at least 5 times the average, are referred to as high-tech intensive industries. These industries have at least 15 research and development workers per thousand workers and 190 technology-oriented workers per thousand workers.
Table 1. High technology employment, 1986, 1996, and 2006 (Employment in thousands)
Employment SIC Industry 1986 1996 2006 ... Total nonfarm wage and salary ... employment 98,727 118,731 136,318 Total high technology 14,482 16,366 21,528 High-technology industries 8,563 9,307 11,431 High-technology intensive industries 4,433 4,549 6,055 281,6 Industrial chemicals 290 263 261 283 Drugs 208 259 319 357 Computer and office equipment 469 363 314 366 Communications equipment 296 269 255 367 Electronic components and accessories 610 610 700 3,726 Aerospace(3) 855 550 596 381 Search and 349 161 110 navigation equipment(3) 382 Measuring and 312 297 265 controlling devices 737 Computer and data processing services 588 1,208 2,509 873 Research, development, and testing services 456 569 726 Other high-technology industries 4,130 4,758 5,376 282 Plastics materials 168 159 145 and synthetics 284 Soaps, cleaners, and 146 154 157 toilet goods 285 Paint and allied products 63 53 52 287 Agricultural chemicals 54 52 52 289 Miscellaneous chemical products 93 93 84 291 Petroleum refining 131 100 80 348 Ordnance and accessories 76 48 42 351 Engines and turbines 99 84 73 353 Construction and related machinery 224 232 247 355 Special industrial machinery 150 177 175 356 General industrial machinery 234 257 250 361 Electric distribution equipment 103 82 68 362 Electrical industrial apparatus 182 156 122 365 Household audio and video equipment 82 83 73 371 Motor vehicles and equipment 872 963 929 384 Medical equipment, instruments, and supplies 213 268 310 386 Photographic equipment and supplies 114 85 65 871 Engineering and architectural services 681 839 1,052 874 Management and public relations services 445 873 1,400 ... Employment in non-high technology industries generated by purchases of high-technology industries 4,004 4,856 7,488 ... Employment in technology- oriented occupations, but not in high-tech industries or in generated employment 1,915 2,203 2,60 Employment change Industry Number 1986-1996 1996-2006 Total nonfarm wage and salary employment 20,004 17,587 Total high technology 1,884 5,162 High-technology industries 744 2,124 High-technology intensive industries 116 1,506 Industrial chemicals -27 -2 Drugs 51 60 Computer and office equipment -106 -49 Communications equipment -27 -14 Electronic components and accessories 0 90 Aerospace(3) -305 46 Search and -188 -51 navigation equipment(3) Measuring and -15 -32 controlling devices Computer and data processing services 620 1,301 Research, development, and testing services 113 157 Other high-technology industries 628 618 Plastics materials -9 -14 and synthetics Soaps, cleaners, and 8 3 toilet goods Paint and allied products -10 -1 Agricultural chemicals -2 0 Miscellaneous chemical products 0 -9 Petroleum refining -31 -20 Ordnance and accessories -28 -6 Engines and turbines -15 -11 Construction and related machinery 8 15 Special industrial machinery 27 -2 General industrial machinery 23 -7 Electric distribution equipment -21 -14 Electrical industrial apparatus -26 -34 Household audio and video equipment 1 -10 Motor vehicles and equipment 91 -34 Medical equipment, instruments, and supplies 55 42 Photographic equipment and supplies -29 -20 Engineering and architectural services 158 213 Management and public relations services 428 527 Employment in non-high technology industries generated by purchases of high-technology industries 852 2,632 Employment in technology- oriented occupations, but not in high-tech industries or in generated employment 288 406 Median Employment change annual Industry Percent wage 1986-1996 1996-2006 in 1997 Total nonfarm wage and salary employment 20 15 $22,734 Total high technology 13 32 -- High-technology industries 9 23 -- High-technology intensive industries 3 33 -- Industrial chemicals -9 -1 (2)40,976 Drugs 25 23 31,886 Computer and office equipment -23 -13 37,960 Communications equipment -9 -5 29,494 Electronic components and accessories 0 15 26,187 Aerospace(3) -36 8 (4)38,292 Search and -54 -32 42,661 navigation equipment(3) Measuring and -5 -11 30,306 controlling devices Computer and data processing services 105 108 40,602 Research, development, and testing services 25 28 34,882 Other high-technology industries 15 13 -- Plastics materials -5 -9 34,320 and synthetics Soaps, cleaners, and 5 2 26,998 toilet goods Paint and allied products -16 -2 28,350 Agricultural chemicals -4 0 31,824 Miscellaneous chemical products 0 -10 29,661 Petroleum refining -24 -20 43,202 Ordnance and accessories -37 -12 27,248 Engines and turbines -15 -13 32,885 Construction and related machinery 4 6 27,248 Special industrial machinery 18 -1 30,472 General industrial machinery 10 -3 28,392 Electric distribution equipment -20 -17 24,315 Electrical industrial apparatus -14 -22 23,941 Household audio and video equipment 1 -12 23,546 Motor vehicles and equipment 10 -4 36,878 Medical equipment, instruments, and supplies 26 16 26,562 Photographic equipment and supplies -25 -24 31,658 Engineering and architectural services 23 25 38.210 Management and public relations services 96 60 31,970 Employment in non-high technology industries generated by purchases of high-technology industries 21 54 -- Employment in technology- oriented occupations, but not in high-tech industries or in generated employment 15 18 --
(1) Wage data are for all industries except agriculture (minus agricultural services which are covered) and the Federal Government. Annual rates are hourly rates times 2,080 hours.
(2) Data shown are for SIC 286. Earnings in SIC 376 were $37,419.
(3) In 1987, the year defense spending reached a post-Viet Nam War high, more than half of employment was defense-related.
(4) Data shown are for SIC 372. Earnings in SIC 376 were $43,680.
NOTE: Dash indicates data not calculated.
Employment in some high-tech industries is very dependent on defense spending. In ordnance and accessories, search and navigation equipment, and aerospace manufacturing, defense-related employment was more than half the total in 1987--the year defense spending reached a post-Vietnam War high.(18) In this article, these three industries are referred to as highly defense-related industries.
Data on employment generated by purchases of high-tech industries from supplying industries was developed using the Bureau's input-output model. This model provides information on the purchase of commodities by each industry as inputs to its production process. These inputs include raw materials and parts and components that are transformed or physically incorporated into final high-tech products, as well as supplies and services. The employment data generated by the model include not just suppliers to high-tech industries, but their suppliers as well, through subsequent tiers in the production process. Data for the BLS model were derived from 1987 input-output benchmark estimates. Purchase patterns were projected to 1996 and to 2006.
Employment in 1996
High-tech employment accounted for 16.4 million wage and salary worker jobs in 1996 or about 14 percent of all wage and salary jobs in the economy. (See table 1.) High-tech industries employed 9.3 million workers, 4.5 million of them in high-tech intensive industries. Employment of 4.9 million workers was generated in non-high-tech industries to produce the goods and services purchased by high-tech industries. (High-tech industries also made purchases from each other, but the employment generated by those purchases is already included in the 9.3 million in high-tech industries.)(19) An additional 2.2 million technology-oriented workers were employed outside of high-tech industries or their suppliers.
High-tech industries, About 5.8 million (or 63 percent) of the 9.3 million jobs in high-tech industries were in manufacturing industries in 1996. High-tech intensive industries accounted for 2.8 million jobs in manufacturing. High-tech manufacturing industries accounted for nearly one-third of all manufacturing employment in 1996. High-tech service industries made up a much smaller proportion of employment in the services division, 10 percent.(20) High-tech employment is fairly concentrated, with the largest 5 of the 29 high-tech industries accounting for 4.5 million high-tech industry jobs, nearly half of the total. The following tabulation shows those five industries and their employment totals:
Largest high-tech industries Employment Computer and data processing services 1,208,000 Motor vehicles and equipment manufacturing 963,000 Management and public relations services 873,000 Engineering and architectural services 839,000 Electronic components and accessories manufacturing 610,000
Non-high-tech industries. About 18 percent of the 4.9 million jobs generated by purchases of high-tech industries were in the wholesale trade industry. (See table 2.) This industry includes not just independent merchant wholesalers, but also sales branches and offices operated by manufacturers who market their products in establishments apart from their plants.(21) Other industries with large numbers of jobs generated by high-tech industries include the personnel supply services (primarily temporary help supply services), miscellaneous business services, and trucking and warehousing industries. Miscellaneous plastics products ranks high, largely because of purchases by the motor vehicle and equipment, computer and office equipment, and electronic components industries. Metal forging and stampings and the industrial machinery (not elsewhere classified) manufacturing industries rank high, largely because of purchases by the motor vehicle and equipment manufacturing industry and the machinery industries.
Table 2. Employment in non-high-technology Industries generated by purchases of high-technology industries, by largest suppliers, 1986, 1996, and 2006
(Employment in thousands) 1986 1996 Industry Employ- Employ- ment Rank ment Total generated by high-tech industries 4,004 ... 4,856 Wholesale trade 707 1 889 Miscellaneous business services 157 2 246 Personnel supply services 73 12 238 Trucking and warehousing 138 3 192 Miscellaneous plastics products, n.e.c 132 4 189 Eating and drinking places 109 8 186 Metal forgings and stampings 131 5 138 Retail trade, except eating and drinking places 62 15 128 Industrial machinery, n.e.c 118 6 113 Air transportation 45 30 88 Hotels and other lodging places 60 16 86 Communications 82 9 82 Accounting, auditing, and other services 65 14 81 Depository institutions 80 10 77 Metal coating, engraving, and allied services 55 20 76 Bast furnaces and basic steel products 78 22 75 Fabricated structural metal products 47 29 69 Crude petroleum, natural gas, and gas liquids 110 7 69 Commercial printing and business forms 65 13 68 Iron and steel foundries 58 18 63 All other industries 1,633 ... 1,702 1996 2006 Percent Industry Rank distribu- Employ- tion ment tion Total generated by high-tech industries ... 100.0 7,488 Wholesale trade 1 18.3 1,209 Miscellaneous business services 2 5.1 440 Personnel supply services 3 4.9 550 Trucking and warehousing 4 3.9 309 Miscellaneous plastics products, n.e.c 5 3.9 347 Eating and drinking places 6 3.8 319 Metal forgings and stampings 7 2.8 116 Retail trade, except eating and drinking places 8 2.6 176 Industrial machinery, n.e.c 9 2.3 81 Air transportation 10 1.8 161 Hotels and other lodging places 11 1.8 216 Communications 12 1.7 102 Accounting, auditing, and other services 13 1.7 137 Depository institutions 14 1.6 157 Metal coating, engraving, and allied services 15 1.6 102 Bast furnaces and basic steel products 16 1.5 69 Fabricated structural metal products 17 1.4 96 Crude petroleum, natural gas, and gas liquids 18 1.4 48 Commercial printing and business forms 19 1.4 98 Iron and steel foundries 20 1.3 71 All other industries ... 35.1 2,682 Industry 2006 Percent change Rank 1986-1996 1996-2006 Total generated by high-tech industries ... 21 5 Wholesale trade 1 26 36 Miscellaneous business services 3 57 79 Personnel supply services 2 225 131 Trucking and warehousing 6 39 62 Miscellaneous plastics products, n.e.c 4 43 84 Eating and drinking places 5 70 72 Metal forgings and stampings 13 6 -16 Retail trade, except eating and drinking places 8 106 37 Industrial machinery, n.e.c 22 -4 -28 Air transportation 9 96 83 Hotels and other lodging places 7 43 151 Communications 16 -1 25 Accounting, auditing, and other services 11 26 69 Depository institutions 10 -3 103 Metal coating, engraving, and allied services 15 39 35 Bast furnaces and basic steel products 27 -5 -7 Fabricated structural metal products 19 49 39 Crude petroleum, natural gas, and gas liquids 39 -38 -30 Commercial printing and business forms 17 5 45 Iron and steel foundries 26 9 13 All other industries ... 2 52
NOTE: n.e.c = not elsewhere classified.
Technology-oriented workers. Of the 2.2 million technology-oriented workers employed outside of high-tech industries or their suppliers, about 630,000 were employed in Government (excluding State and local education). The Federal Government accounted for about half of this number, 312,000. Other industries with large numbers of technology-oriented workers include wholesale trade, 180,000; public and private education, 139,000; and personnel supply services, 94,000.
Employment trends, 1986, 1996 and 2006
High-tech employment increased 13 percent, compared with 20 percent for the economy as a whole over the 1986-96 period. This accounted For 9 percent of total employment growth. (See table 1.) During this period, high-tech employment declined from 14.7 percent to 13.8 percent of total employment. Projections for the 1996-2006 period show high-tech and related employment growing more than twice as fast as employment in the economy as a whole (32 percent, compared with 15 percent). For the same period, high-tech employment is expected to account for 29 percent of all projected growth. In 2006, high-tech employment is projected to account for 15.8 percent of total employment.
From 1986 to 1996, employment in the 29 high-tech industries grew slower (9 percent) than total employment growth (20 percent).(22) However, over the 1996-2000 period, these industries are projected to increase faster (23 percent), despite the slowing of total employment growth (15 percent). The 10 high-tech intensive industries, which grew only 3 percent from 1986 to 1996, are projected to grow by 33 percent.
Employment generated by purchases of high-tech industries has and is projected to continue to grow faster than employment in the high-tech industries. Employment generated by purchases of the 29 industries increased by 21 percent from 1986 to 1996. It is projected to grow by 54 percent over the 1996-2006 period. Employment of technology-oriented workers not included in the industry data increased by 15 percent from 1986-96 and is projected to increase by 18 percent from 1996 to 2006.(23)
High-tech industries. Almost all growth in high-tech industries is in the four service division industries that are considered to be high-tech. Employment in computer and data processing services and management and public relations services roughly doubled from 1986 to 1996. Over the 1996--2006 period, computer and data processing services is projected to double again, while management and public relations services is projected to grow by 60 percent. (See table 1.) The other two high-tech service industries--research, development, and testing laboratories and engineering and architectural services--also have and are projected to grow faster than overall employment in the economy.
Cuts in defense spending over the 1986-96 period caused employment in some high-tech manufacturing industries to decline, and retarded growth in other industries.(24) The three most highly defense-related non-Federal industries; in the economy--aerospace, navigation and guidance instruments, and ordnance and accessories manufacturing--had a combined loss of 521,00 jobs, or a 41-percent decline. The other 26 high-tech industries grew 17 percent. Defense is expected to decline much less over the 1996-2006 period.
Except for the three highly defense-related industries, employment in high-tech manufacturing industries, as a group, declined I percent over the 1986-96 period and a l-percent decline also is projected over the 1996-2006 period. Employment in most of the 25 high-tech manufacturing industries has and is projected to decline, and this is the pattern in most manufacturing industries. Noteworthy is the decline in computer and office equipment manufacturing, "an industry that many regard as having begun the `high tech revolution' of the 1970s and 1980s."(25) The only high-tech manufacturing industries with employment growth faster than that for the economy overall are health-related drugs and medical equipment, instruments, and supplies.(26)
Non-high-tech industries. Employment generated by purchases of the high-tech industries has grown and is projected to grow much faster than that in the high-tech industries, themselves. Such employment makes up roughly half of all high-tech job growth. Most generated employment growth, both past and projected, is caused by the purchases of just two industries--computer and office equipment and electronic components and accessories manufacturing. These industries accounted for 57 percent of growth generated by high-tech industries between 1986 and 1996 and 88 percent of projected 1996-2006 growth. Purchases grow rapidly to support the several-fold increase in computer and office equipment and in electronic component and accessories output. (See table 3.) Most supplying industries, such as wholesale trade and miscellaneous business services, have relatively modest improvements in labor productivity, so rapid growth in output to supply the computer and components industries results; in rapid employment growth. For the other 27 high-tech industries combined, output growth is about the same as that for the total economy, and the employment they generate grow slower than the average for the total economy.
Table 3. Output in high technology Industries, 1986, 1996, and 2006
(Output in billions of 1992 dollars(1)) SIC Industry Output 1986 1996 2006 ... All nonfarm industries 9,167 11,789 15,252 ... High-tech industries 1,281 1,988 3,231 ... High-tech 512 913 1,915 intensive industries 281,6 Industrial chemicals 87 89 102 283 Drugs 49 74 98 357 Computer 26 159 636 and office equipment 366 Communication equipment 37 63 101 367 Electronic 38 141 285 components and accessories 3,726 Aerospace(2) 113 94 120 381 Search and 41 28 31 navigation equipment(2) 382 Measuring and 27 43 55 controlling devices 737 Computer and data 66 166 403 processing services 773 Research and 28 56 84 testing services Other high-tech industries 769 1,075 1,316 282 Plastic materials and synthetics 40 57 64 284 Soaps, cleaners, and toilet goods 36 39 49 285 Paint and allied products 14 16 19 287 Agricultural chemicals 13 19 24 289 Miscellaneous 18 22 24 chemical products 291 Petroleum refining 125 156 204 348 Ordnance and 8 5 5 accessories, n.e.c(2) 351 Engines and turbines 17 21 26 353 Construction and related machinery 29 39 56 355 Special industry machinery 17 31 34 356 General industrial machinery 28 37 42 361 Electric distribution equipment 10 12 11 362 Electrical industrial apparatus 17 25 271 365 Household audio and video equipment 12 15 20 371 Motor vehicles and equipment 219 320 372 384 Medical instruments and supplies 23 42 59 386 Photographic 19 22 25 equipment and supplies 971 Engineering and architectural services 70 91 119 874 Management and public relations services 54 106 136 Output change Industry Number 1986-96 1996-06 All nonfarm industries 2,622 3,463 High-tech industries 707 1,243 High-tech 401 1,002 intensive industries Industrial chemicals 2 13 Drugs 25 24 Computer and office equipment 133 477 Communication equipment 26 38 Electronic components and accessories 103 144 Aerospace(2) -19 26 Search and navigation equipment(2) -13 3 Measuring and controlling devices 16 12 Computer and data processing services 100 237 Research and testing services 28 28 Other high-tech industries 306 241 Plastic materials and synthetics 17 7 Soaps, cleaners, and toilet goods 3 10 Paint and allied products 2 3 Agricultural chemicals 6 5 Miscellaneous chemical products 4 2 Petroleum refining 31 48 Ordnance and accessories, n.e.c(2) -3 0 Engines and turbines 4 5 Construction and related machinery 10 17 Special industry machinery 14 3 General industrial machinery 9 5 Electric distribution equipment 2 -1 Electrical industrial apparatus 8 2 Household audio and video equipment 3 5 Motor vehicles and equipment 101 52 Medical instruments and supplies 19 17 Photographic equipment and supplies 3 3 Engineering and architectural services 21 28 Management and public relations services 52 30 Output change Industry Percent 1986-1996 1996-2006 All nonfarm industries 29 29 High-tech industries 55 63 High-tech 78 110 intensive industries Industrial chemicals 2 15 Drugs 51 32 Computer and office equipment 512 300 Communication equipment 70 60 Electronic components and accessories 271 102 Aerospace(2) -17 28 Search and navigation equipment(2) -32 11 Measuring and controlling devices 59 28 Computer and data processing services 152 143 Research and testing services 100 50 Other high-tech industries 40 22 Plastic materials and synthetics 43 12 Soaps, cleaners, and toilet goods 8 26 Paint and allied products 14 19 Agricultural chemicals 46 26 Miscellaneous chemical products 22 9 Petroleum refining 25 31 Ordnance and accessories, n.e.c(2) -37 0 Engines and turbines 24 24 Construction and related machinery 34 44 Special industry machinery 82 10 General industrial machinery 32 14 Electric distribution equipment 20 -8 Electrical industrial apparatus 47 8 Household audio and video equipment 25 33 Motor vehicles and equipment 46 16 Medical instruments and supplies 83 40 Photographic equipment and supplies 16 14 Engineering and architectural services 30 31 Management and public relations services 96 28
(1) Chained 1992 dollars. See James C. Franklin, "Industry output and employment projections to 2006," Monthly Labor Review, November 1997, pp. 39-57.
(2) In 1987, the year defense spending reached a post-Viet Nam War high, more than half of employment was defense-related.
NOTE: n.e.c. = not elsewhere classified.
High tech, high pay
A number of studies have stated that high-tech jobs are well paid.(27) It clearly is the case for the industries and occupations in this study. Median wages in every high-tech industry in 1997 exceed the median for all industries. (See table 1.) In 10 of the industries (6 within high-tech intensive), wages were more than 50 percent higher than the median for all industries. However, industries with the lowest wages, such as SIC 365, Household audio and video equipment and SIC 362, Electrical industrial apparatus were not much higher. Median wages in 7 out of the 12 technology-oriented occupations shown in table 4 were more than twice the median for all occupations and even for chemical technicians and technologists, the lowest paid, the median was about a third higher.(28)
Table 4. Median annual wages of wage and salary workers in selected technology-oriented occupations, 1997
Median Occupation wages All occupations $22,734 Engineering, mathematical, and natural sciences managers 72,675 Electrical and electronics engineers 59,155 Mechanical engineers 50,606 Computer engineers 58,386 Systems analysts, electronic data processing 49,899 Operations and systems researchers and analysts, except computer 49,795 Biological scientists 43,701 Chemists 43,971 Geologists, geophysicists and oceanographers 52,395 Computer support specialists 35,895 Electrical and electronic engineering technicians and technologists 34,237 Chemical technicians and technologists 29,994
NOTE: Data are for all industries except agriculture (minus agricultural services which are covered) and the Federal Government. Annual rates are hourly rates times 2,080 hours.
SOURCE: Occupational Employment Statistics Survey.
Quality. Standard sources of employment and related data were used to identify and analyze high-tech employment in this article. Nevertheless, these data sources have many deficiencies when used in this manner. For example, ratios of scientific and technical employment to total employment used to measure technologic intensity in an industry were derived from the Occupational Employment Statistics survey. This survey collects data on employment of technology-oriented workers and on research and development workers primarily for three-digit industry groups. Therefore, these selection criteria provide a measure of average intensity for three-digit industry groups. However, industries identified as high tech may have establishments employing few research and development workers or other technology-oriented workers and fall short of the ratios used as cutoff points. These establishments also may produce low-tech products. For example, the high-tech industry, Computer and office equipment manufacturing (SIC 357) includes Office machines, not elsewhere classified (SIC 3579), which has establishments primarily producing low-tech products, such as paper cutters, pencil sharpeners, and staple removers, and it most likely employs few technology-oriented workers.
Conversely, industries not identified as high tech may have establishments that :individually do meet the high-tech criteria. Obvious cases are Government research and development laboratories, college and university research and development laboratories, and personnel supply firms specializing in technology-oriented workers. None of these are separately identified in the Occupational Employment Statistics survey. However, as indicated earlier, the inclusion of all technology-oriented workers within high-tech employment, regardless of industry, at least captures the key technology-oriented workers in these activities.
Judgment. In addition to data quality issues, clearly there are judgmental issues that have a bearing on the analysis of high-tech employment. For example, as indicated earlier, the proportion of employment in technology-oriented occupations that was used as the cut off for defining high-tech industries is very subjective. Using only scientific and technical occupations as technology-oriented occupations to include in high-tech employment also is somewhat subjective. A contention could be made to include many other occupations involved in repairing or operating the products of high-tech industries. Although these workers usually require a more limited knowledge of technology than do scientific and technical workers, their work may have more technologic content than many workers employed in high-tech industries. In 1996, an estimated 2.4 million workers not included in the industry totals were employed in occupations that repair products produced by high-tech industries. Half of the workers repaired the output of the motor vehicle and parts manufacturing industry. Other workers, such as aircraft pilots, telephone operators, and radiologic technologists and technicians operated the output of high-tech industries as their primary duty. Workers selling high-tech products also are related logically to high tech, but available data do not permit a count of them.
Comparison with other analyses
The industries meeting the definition of high tech in this study are very similar to those in previous BLS analyses and, like the other BLS analyses, are more inclusive than most other studies. (See table 5, pages 24-26.) The 1983 BLS analysis developed three high-tech industry lists based on different definitions.(29) One was based on employment of technology-oriented workers as a proportion of total employment, another was based on the ratio of research and development expenditures to net sales, and the other combined the two criteria. The 1991 BLS analysis used data on research and development employment, then newly available from the Occupational Employment Statistics survey.(30) More recently, the National Science Foundation used a definition from the Organisation for Economic Co-operation and Development (OECD) which was based solely on an industry's research and development spending to value added.(31) OECD experimented with various other criteria for that study, including employment of all scientific and technical personnel, but because of the absence of data for some countries, it did not use any other criteria, and the coverage was limited to manufacturing industries. Another study, published in 1986, also covered only manufacturing industries.(32) In that analysis, employment of all technology-oriented workers was the only criteria used to define an industry as high tech. One analysis by the American Electronic Association in 1999, and another, prepared by the U.S. Department of Commerce in 1999, relied on judgment to identify high-tech industries, rather than statistical measures of technologic intensity derived from survey data.(33)
[TABULAR DATA 5 NOT REPRODUCIBLE IN ASCII]
THE LIST OF 29 HIGH-TECH INDUSTRIES used in this study is similar to lists in other BLS studies. Using the most inclusive list in the 1983 study would identify high-tech industry employment in 1996 at 13.3 million, and using the more inclusive list in the 1991 study, would put employment at 10.2 million. This compares with 9.3 million for the 29 high-tech industries in this study. The 1983 study-definition is 3.9 million higher and the 1991 study is 0.9 million higher than the definition of high-tech industries in this study. The 1983 study-definition includes several wholesale trade industries, which had 2.1 million workers in 1996. These industries include establishments that sell the output of high-tech manufacturers. In addition, 812,000 were in communications and utilities industries, 534,000 were in heavy construction, and some were in smaller industries. However, the 1983 study does not include management and public relations services or ordnance and accessories. The 1991 definition counts 240,000 high-tech workers in miscellaneous converted paper products, 168,000 in nonferrous rolling and drawing, and 153,000 in miscellaneous electrical equipment, however, it does not include construction machinery or electrical distribution equipment.
(1) Richard W. Riche, Daniel E. Hecker, and John U. Burgan, "High technology today and tomorrow: a small slice of the employment pie," Monthly Labor Review, November 1983, p. 50.
(2) Monetary Policy Testimony and Report to Congress, Testimony of Alan Greenspan, Chairman, Board of Governors of the Federal Reserve System Before the Subcommittee on Domestic and International Monetary Policy of the Committee on Banking and Financial Services, U.S. House of Representatives, Feb. 24, 1998.
(3) "Industry, Technology, and Competitiveness in the Marketplace," Science and Engineering Indicators (Arlington, VA, National Science Board, National Science Foundation, 1998), ch. 6, and Lawrence M. Rausch, "High-tech drives global economic activity," National Science Foundation Issues Brief, NSF 98-319 (Arlington, VA, Division of Science Resources Studies, July 20, 1998).
(4) See U.S. Industry and Trade Outlook (DRI/McGraw-Hill, Standard and Poor's and U.S. Department of Commerce/International Trade Administration, 1999), pp. 11-13 through 11-15, 16-1, and ch. 36; "John Carey, "We Are Now Starting the Century of Biology," and Neil Gross and Otis Port "The Next Wave for Technology," Business Week, Aug. 24-31, 1998, pp. 80-87; David Stipp, "Engineering the future of food," Fortune. Sept. 28, 1998, pp. 128-44; and Daniel McGinn and Adam Rogers, "Operation: Supercar," Newsweek, Nov. 23, 1998, pp. 48-53.
(5) Riche and others, "High technology today and tomorrow," pp. 50-58; Paul Hadlock, Daniel Hecker, and Joseph Gannon, "High technology employment: another view," Monthly Labor Review, July 1991, pp. 26-30; and William Luker, Jr. and Donald Lyons, "Employment shifts in high-technology industries, 1988-96," Monthly Labor Review, June 1997, pp. 12-25.
(6) High tech also has spill-over effects that benefit other commercial sectors and lead to productivity gains, business expansion, and creation of high wage jobs. See Science and Engineering Indicators, 1998, pp. 6-5.
(7) In Monthly Labor Review, see James C. Franklin, "Industry output and employment projections to 2006," pp. 39-57; and George T. Silvestri, "Occupational employment projections to 2006," November, 1997, pp. 57-83.
(8) Technology. Innovation, and Regional Economic Development (U.S. Congress, Office of Technology Assessment, Sept. 9, 1982).
(9) Science and Technology Resources in U.S. Industry, Special report NSF88-321 (Arlington, VA, National Science Foundation, December 1988), p.vii.
(10) The Bureau of the Census listed 10 advanced technology product areas to track and understand international trade. These areas are: biotechnology, life sciences technologies, opto-electronics, computers and telecommunications, electronics, computer-integrated manufacturing, materials design, aerospace, weapons, and nuclear technology. See Science and Engineering Indicators, 1998, pp. 6-12 and 6-13. However, no employment data are collected by product or product categories, so the employment associated with production of these products cannot be determined. The Organisation for Economic Co-operation and Development also has developed a list, see Thomas Hatzichronoglou, "Revision of the High-technology Sector and Product Classification," STI working papers (Paris, OECD, 1997), pp. 7-10. Also see Riche and others, "High technology today and tomorrow," pp. 50-53.
(11) Some, however, exclude service industries or industries with little employment.
(12) The category, research and development workers, is a subset of technology-oriented workers.
(13) See Riche and others, "High technology today and tomorrow," pp. 54-55, which also defined these occupations as technology-oriented. However, it did not include engineering, scientific and computer managers, an occupation not surveyed separately at that time.
(14) Data are not collected separately in BLS surveys for these categories, but are collected by the National Science Foundation. See the National Science Foundation website: http://sestat.nsf.gov
(15) Until 1996, the Occupational Employment Statistics program followed a 3-year cycle.
(16) Standard Industrial Classification Manual. 1987 (Executive Office of the President, Office of Management and Budget).
(17) Excluded industries are SIC 211 Cigarettes, SIC 261 Pulp mills, and SIC 489 Communications services, not elsewhere classified. Two industries consist of two 3-digit SICS: Aerospace, which consists of SIC 372, aircraft and parts and SIC 376 Guided missiles and space vehicles; and Industrial chemicals, which consists of SIC 281, Inorganic and SIC 284, Organic. These were combined because the system used to provide employment generated by an industry's purchases cannot provide separate data.
(18) Allison Thomson, "Defense-related employment and spending, 1996-2006," Monthly Labor Review, July 1998, pp. 1 4-33.
(19) About 983,000 jobs were generated in high-tech industries by purchases from each other. The three largest suppliers were electronic components manufacturing (234,000 jobs generated), computer and data processing services (108,000 jobs), and management and public relations services (88,000 jobs).
(20) This division is part of the services-producing sector. No other divisions within the services-producing sector--trade, communications, utilities, transportation, finance, or government had high-tech industries
(21) Industry data used in this article are collected on an establishment basis. An establishment is defined as an economic unit, such as a factory or office, generally at a single physical location, where business is conducted.
(22) High-tech industry growth from January 1988 to January 1996 is discussed in Luker and Lyons, "Employment shifts in high-technology industries," pp. 12-25, with some detail by 4-digit SIC industry.
(23) In all industries, technology-oriented workers grew 24 percent and are projected to grow 35 percent.
(24) See Thomson, "Defense-related employment and spending;" and Ron L. Hetrick, "Employment in high-tech defense industries in a post cold war era," Monthly Labor Review, August 1996, pp. 57-63, and Luker and Lyons. "Employment shifts in high technology industries."
(25) See Luker and Lyons, "Employment shifts in high technology industries," pp. 16 and 21. Employment trends in computer manufacturing are discussed in Jacqueline Warnke, "Computer manufacturing: change and competition," Monthly Labor Review, August 1996 pp. 18-29.
(26) Employment trends in drugs manufacturing are discussed in Stephen Heftier, "Drugs manufacturing: a prescription for jobs," Monthly Labor Review, March 1995 pp. 12-22.
(27) See Science and Engineering Indicators, pp. 6-5 and 6-16; Cyberstates 3.0 (Washington, DC, American Electronics Association, 1999), p 7, and Hadlock, Hecker. and Gannon, pp. 27 and 28.
(28) Data are from the Occupational Employment Statistics Survey.
(29) Riche and others, "High technology today and tomorrow."
(30) Hadlock and others, "High technology employment: another view; Luker and Lyons used this definition."
(31) Science and Engineering Indicators, 1998; and Rausch, "High-tech drives global economic activity." Data, which are for all OECD countries, are presented in Hatzichronoglou, "Revision of the High-technology Sector."
(32) Ann Markusen, Peter Hall, and Amy Glasmeier. High Tech America. the what. how, where, and why of the sunrise industries (Boston, Allen and Unwin, 1986), pp. 14-15. It also used Occupational Employment Statistics data; research and development data were not then available from this survey.
(33) See Cyberstates 3.0, pp. 103-4: and The Emerging Digital Economy II (U.S. Department of Commerce, June 1999), p. 15.
Daniel Hecker is an economist in the Office of Employment Projections, Bureau of Labor Statistics.3…