U.S. tech sector jobs show strong growth, but lack of engineers could hurt in future

The U.S. continues to produce a growing number of high-paying tech jobs, with the top locations being New York City, Silicon Valley, and Seattle, according to AeA's Cybercities report. Nevertheless, the report also points to a labor problem that could threaten America's tech leadership.
Written by Jason Hiner, Editor in Chief

The American Electronics Association (AeA) has released its Cybercities 2008 report examining the high-tech employment market in 60 U.S. metropolitan areas. The data shows that the U.S. tech sector continues to grow and create more jobs, high tech jobs continue to pay very well, and that the U.S. remains in danger of losing its edge in technology because its schools are not producing enough workers with the right skills.

The full 144-page report is available online, but it costs $250 ($125 for AeA members), so we'll sum up the top points. Here's the AeA's description of what's in the report:

"It examines the nation's largest metropolitan areas focusing on high-tech employment, wages, establishments, payroll, employment concentration, and wage differential. The report also compares different regions of the United States and delves into the 16 sectors that comprise AeA's definition of the high-tech industry for these 60 cities."

It's important to note that the study is based on U.S. Bureau of Labor statistics from 2006 -- the most recent full year that comprehensive data is available. The AeA also publishes its regular Cyberstates study, but this is the first time since 2000 that it has produced the Cybercities study.

Top takeaways

  • 51 of the 60 U.S. cities with the most tech jobs added more jobs in 2006
  • Average tech industry salary ($79,484) is 87% higher than average private sector salary ($42,405)
  • Total tech jobs increased 2.5% from 2005 to 2006
  • At the height of the dot com boom in 2001 the tech industry employed 6.5 million people, in 2006 that number climbed back to 5.8 million
  • The New York City metro area employed the largest number of high-tech workers with 316,500, Silicon Valley was second with 225,300, followed by Boston (191,700) and Dallas (176,000)
  • Silicon Valley had the highest concentration of tech workers with 286 high-tech workers per 1,000 private sector workers
  • Seattle added more tech jobs than any other city in 2006 with 7,800
  • Silicon Valley and Seattle still don't have as many tech workers as they did before the dot com bust
  • Detroit and Miami were among the cities that lost the most tech jobs in 2006

Risk of losing tech leadership

Even with the economic uncertainty in the U.S. in 2008, the AeA still sees strength in the tech industry. "The tech sector is not laying people off," said Christopher Hansen, chief executive of the AeA. "If anything, the industry is having trouble getting enough people with the right credentials."

That's where the Cybercities 2008 report turns to the bad news. There is a warning flare in the report that the U.S. could lose its leadership role in technology.

"Our public schools are not generating [enough of] the kinds of people who can go into engineering and math and compete," said Hansen. As a result, the U.S. could be adding more high-tech jobs but instead is losing them to other countries.

Hansen and the AeA believe that the U.S. educational problem is being compounded by the fact that the federal government does not offer enough work visas and green cards to foreign students who come to the U.S. to study at our universities and would then like to stay to work in the U.S. tech sector.

"We educate them and then tell them to go home. This is absurd," said Hansen.

As reported by the Associated Press:

"The AeA report stresses that continued tech sector growth is not guaranteed in today's global economy. To remain competitive, U.S. cities need to improve the quality of elementary and high school education — particularly in math and science — support research universities, and invest in broadband networks and other critical infrastructure. AeA argues that federal policymakers also need to invest more in research and development, while allowing more skilled foreign workers into the U.S. and promoting open trade policies."

We've been talking about the lack of math and engineering students and the failure of U.S. schools in math/sciences for over a decade and there has been a lot of lip service about improving the situation. I'd like to see if there is any research on what kind progress the U.S. is making. If you know of any reports, please post the information and/or links in the discussion.

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