Employment Shifts in High-Technology Industries, 1988-96

By Luker, William, Jr.; Lyons, Donald | Monthly Labor Review, June 1997 | Go to article overview

Employment Shifts in High-Technology Industries, 1988-96


Luker, William, Jr., Lyons, Donald, Monthly Labor Review


From 1988 to 1996, employment in high-technology industries shifted more toward services; indeed, since 1988, growth in high-tech services accounted for all of the net increase in employment in the research-and-development-intensive sector

High-technology industries are the most important source of strategically transformative products and processes in the U.S. economy. Changes in employment patterns in these industries thus command the interest of researchers, policymakers, and the general public. This article uses data from the BLS Current Employment Statistics (CES) program from January 1988 through January 1996 to survey the shifting levels and composition of employment in research-and-development (R&D)-intensive high-technology industries. The data reveal three noteworthy developments:

* Employment in R&D-intensive industries increased slowly over the period studied, contributing very little to the overall growth of total nonfarm employment. The result was that, at the beginning of 1996, employment in R&D-intensive high-technology industries was an appreciably smaller share of total nonfarm employment than at the beginning of 1988.

* The industrial composition of employment in R&D-intensive high-technology industries is shifting dramatically toward services industries, as employment in R&D-intensive, defense-dependent manufacturing industries declines, and employment in civilian high-tech manufacturing remains essentially static. In fact, R&D-intensive services accounted for all of the net increase in employment in the R&D-intensive sector since 1988 and grew more rapidly that did employment in the services division as a whole.

* There are reliable indication that the demand for high-tech R&D workers -- that is, those actually engaged in R&D in any given high-technology industry -- is also shifting toward occupations that are more involved with the production of services that the production of goods.

In what follows, we consider these shifts in more detail and interpret their causes and consequences in light of recent observations about the evolving character of manufacturing and service industries both inside and outside of the high-tech sector.

Three questions about high tech

Why are high-tech industries so important? At least one source of the general public's interest has been a fascination with the explosion of new products and processes made in the United States and other advanced industrial countries since the end of World War II. But innovative technologies -- from the railroad and the telegraph to the airplane -- have almost always created a sensation. Instead, the continuing attention paid to high-tech industries in recent years seems to be rooted in the widespread belief that the innovations they produce can profoundly alter an economy's mix of firms, industries, and jobs.[1]

But what is often overlooked in studies of the high-technology sector is that the sector itself is not insulated from the transformative effects of the innovations is unleashes upon other industries. Because changing employment patterns often provide the best indicator of the character of transformations within any industry, we ask three questions about recent employment patterns inside U.S. high-tech industries: (1) How many new jobs has the high-technology sector produced in recent years? (2) What is the industrial composition of these new jobs? and (3) What is happening to the occupational mix of employment in high-tech industries, particularly the demand for employees whose R&D activities actually lend technological intensity to these industries?

Defining high-technology industries

Before we examine recent data on employment in high-tech industries, we must first define the term. As one analyst has said, "Everyone knows what [high tech] is, but no two lists are alike."[2] In the early 1980s, for example, BLS analysts identified 48 manufacturing and service industries in which the percentages of "technology-oriented workers" (engineers, life and physical scientists, mathematical specialists, engineering and science technicians, and computer specialists) were at least 1.

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