High-Technology Employment: A NAICS-Based Update: Among High-Technology Industries-Those with a High Proportion of Scientists, Engineers, and Technicians-Some Are Projected to Grow Rapidly; Overall, However, This Group of Industries Is Expected to Continue to Grow Slowly

By Hecker, Daniel E. | Monthly Labor Review, July 2005 | Go to article overview

High-Technology Employment: A NAICS-Based Update: Among High-Technology Industries-Those with a High Proportion of Scientists, Engineers, and Technicians-Some Are Projected to Grow Rapidly; Overall, However, This Group of Industries Is Expected to Continue to Grow Slowly


Hecker, Daniel E., Monthly Labor Review


High technology receives a great deal of attention due to its association with new products and new production processes and its implications for productivity, international competitiveness, overall economic growth, and the creation of well-paying jobs. Numerous studies have resulted in the publication of high-tech rankings of States and metropolitan areas, while State and local governments have established task forces to assess the potential of high technology to stimulate their economies and have developed strategies to lure high-technology firms. (1)

It is important to define the term high tech(nology), both to assess the claims about its effect on the economy and to develop policies and programs. Four articles previously published in the Review presented definitions of high-technology industries and occupations and analyzed high-tech employment trends and projections. (2) Because there are a number of methods of identifying high-tech industries, the lists of such industries produced in the literature differ from one another. Using BUS data, this article presents one particular method, lists the resulting industries, discusses employment in those industries, and examines several other approaches. Along with describing employment in high-tech industries in 2002, the article considers employment in 1992, projected employment for 2012, and growth over the 1992-2002 and 2002-12 periods, as well as earnings in high-tech industries and occupations in 2004. The updated list of high-tech industries is based on the 2002 North American Industry Classification System (NAICS), which replaces the Standard Industrial Classification System (sic) used in earlier articles. The article describes the criterion used to select the industries and, in the final section, examines other selection criteria that were suggested in a March 2004 interagency conference on defining high technology.

Definitions and data

The term high tech has been used broadly to describe not only industries, but also occupations and products. A Congressional Office of Technology Assessment document describes high-technology firms as those "engaged in the design, development, and introduction of new products and/or innovative manufacturing processes through the systematic application of scientific and technical knowledge." (3) The document also points out that high-technology firms typically use state-of-the-art techniques and, in terms of quantifiable resources, devote a "high" proportion of expenditures to research and development (R&D) 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 to measures of R&D activities as "two of the most important parameters of innovation" and uses those two parameters "as surrogates for measuring the broader concept of innovation." (4) Articles in the Review, as well as other sources, have used one or both of these input-based criteria to identify high-tech industries. Studies specify thresholds for these measures, such as a percentage of total employment in science, engineering, and technician occupations or spending on R&D as a percentage of sales or value added. Industries that exceed these thresholds are identified as high tech. (5) Other studies rely on judgment, generally about output, to identify high-tech industries. For example, the American Electronic Association defines an industry as high tech if it was a "maker/creator of technology." (6) Using the judgment of industry analysts, the Census Bureau identifies high-tech products as those embodying new or leading-edge technologies. (7)

A March 2002 Review article by Christopher Kask and Edward Sieber points out that both input-based and output-based methods have advantages and drawbacks. (8) Input-based approaches rest on easily obtainable nonsubjective data, but in the absence of an obvious threshold above which an industry is deemed high tech, the resulting lists must be considered arbitrary. …

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