Tech Sector Adds 47,000 Jobs So Far in 2010
Tech jobs are coming back after hitting bottom early this year, according to economy tracker Moody's Analytics (MCO). The U.S. economy has added 47,000 technology jobs so far this year amid resurgent demand for tech products in Asia and Latin America.
That represents 15 percent growth in tech jobs, compared with an 11 percent jobs growth in the economy overall since the beginning of the year, according to Moody's. Since a peak at the end of 2007, the tech industry had lost 307,000 jobs nationally in the economic downturn.
"It seems like this industry is embarking on a new growth spurt," says Sophia Koropeckyj, a managing director for Moody's Analytics. "Tech jobs seem to be accelerating."
Asia and Latin America's demand for tech products has resulted in new hiring and is one contributor to the recovery, Koropeckyj says. After slumping in the first half of 2009, global PC shipments—bread and butter of U.S. companies Hewlett-Packard (HPQ), Dell (DELL), and Apple (AAPL)—should rise 14.3 percent this year, to 352 million units, according to consultant Gartner (IT).
Billions in government stimulus funds have spurred recent purchases by agencies and businesses, such as those building out broadband networks. Corporate and government information technology spending should rise 8.1 percent this year, to $758 billion, according to consultant Forrester Research (FORR). Already, networking gear maker Cisco Systems (CSCO) saw sales for its fiscal first quarter ended Oct. 30 rise 19 percent from a year earlier, to $10.75 billion.
"The first wave of growth is going through," says Andrew Bartels, a vice-president at Forrester. But the recovery may be uneven: During Cisco's quarterly earnings call in November, Chief Executive Officer John Chambers mentioned several "challenges" the company faces, such as slower-than-expected pickup in orders from government agencies in the U.S. and Japan.
Recovery among Detroit's automakers, helped by a government bailout, is driving a resurrection of related tech-sector jobs. Last year, Detroit experienced a 15 percent drop in high-tech jobs from a year earlier, according to a new study from technology industry association TechAmerica Foundation, which studied jobs and wages data for the 60 U.S. cities with the highest proportions of tech jobs. Detroit's was the worst drop in high-tech jobs among any of the 60 cities last year. But in a Dec. 1 blog, carmaker Chrysler announced it will hire 1,000 more engineers and other high-tech workers by the end of the first quarter of 2011. The company has hired 5,000 workers overall since emerging from bankruptcy in June 2009. In November, rival General Motors (GM) said it will hire 1,000 engineers and researchers in Michigan in the coming months to help expand its lineup of electric cars, whose sales are expected to climb.
In some technology industries, salaries are starting to inch back up again. Information, media, and telecommunications professionals have seen their wages rally slightly this year, according to survey data from PayScale, which tracks global compensation. In 2009, high-tech salaries nationwide slipped 0.8 percent, which was less than the decline in the private sector overall, where the average salary dropped 1.4 percent, according to the TechAmerica report.
"The gap has widened. It's significant," says Josh James, vice-president of research and industry analysis at TechAmerica. "Especially in hard times, companies are trying to cut costs, and one way to do that is to implement technology solutions."
Some local and state governments have managed to build up their technology hubs during the economic downturn. Last year, Oklahoma City added 900 high-tech jobs—and clocked the fastest high-tech jobs growth among the nation's 60 tech-heavy cities, according to TechAmerica. In 2009, 53 of the 60 metro areas, including Silicon Valley, shed jobs.
The reason behind Oklahoma's tech jobs surge? State and local governments have made a concerted effort to build the metro area up into a bigger competitor to Silicon Valley. "There's a tremendous amount of local support," said Doug McCormack, CEO of OrthoCare Innovations, a local medical device maker. The startup hired 15 people last year and 10 more in 2010—most of them in Oklahoma—thanks to $2.5 million in grants from local and state agencies. "It would have been much more difficult to get this kind of attention in D.C. or on the West Coast," McCormack says.
From 2008 to 2009, Oklahoma City managed the biggest jump in TechAmerica's ranking of the 60 cities, rising to No. 57 in 2009 in the number of high-tech jobs, up from No. 60 in 2008.
As OrthoCare looks to expand its manufacturing, further expansion in Oklahoma "is an easy decision for us," McCormack says.
Click here to see the 25 U.S. cities with the most tech jobs.