High-Tech Industry Employment Edges Upward in 2005, AeA Report Says
Tech Manufacturing Adds Jobs for the First Time Since 2000
Unemployment Rate for Electrical Engineers Reaches 1.5 Percent, Lowest in 3 Years

Washington, DC (April 19, 2006) – AeA, the nation’s largest trade association representing all segments of the high-tech industry, today released its ninth annual Cyberstates report detailing national and state trends in high-tech employment, wages, exports, and other key economic factors.  The report, Cyberstates 2006: A Complete State-by-State Overview of the High-Technology Industry, covers all 50 states, the District of Columbia, and Puerto Rico.

The report shows that in 2005, the high-tech industry added some 61,000 net jobs for a total of 5.6 million in the United States.  This growth is an important first step in the turnaround of the high-tech industry, and represents a significant change from a previous four-year decline.

"While we are encouraged by the positive employment trend, the technology industry is focused on the long term health of the industry, the economy, and our nation," said William T. Archey, President and CEO of AeA.  "Tech industry employment only grew by one percent last year compared to two percent for the U.S. private sector as a whole.  To promote the creation of high-paying technology jobs for the future, we need to address the competitiveness issues facing our country, today."

"This means that all Americans need to recognize that we live in an increasingly competitive world," Archey continued.  "To prepare ourselves for this challenge, we need to invest in long-term basic research, particularly in the physical sciences.  We need to reform our visa system so that the best and the brightest individuals come and stay in the United States, creating companies, products, wealth, and jobs.  And most importantly, we need dramatic improvements in our educational system, so that our children are prepared to compete in an economy that is knowledge based and driven by technology."

In recognizing these competitiveness trends, Cyberstates 2006 shows that unemployment rates for most tech professions fell in 2005.  For example, the unemployment rate for electrical engineers was 1.5 percent, the lowest rate in three years.  These high-paid jobs are expected to grow significantly over the next 10 years.  Nearly 1 million new computer specialists will be needed, as well as nearly 200,000 new engineers.

In specific sectors, the high-tech manufacturing industry added 3,300 net jobs in 2005, the first time tech manufacturing employment has increased since 2000.  Similarly, software services and engineering and tech services employment was up in 2005 for the second year in a row.  This job growth is positive news for the U.S. economy as tech industry jobs earn 85 percent more than the average private sector job.

Cyberstates 2006 shows that technology industry employment at the state level was mixed, where 25 cyberstates added tech jobs in 2004 and 27 cyberstates lost jobs.  Virginia was the nation's leading state by technology employment growth, adding 9,100 jobs in 2004, the most current state data available.

The report also found that after growing in 2004, venture capital investment in the technology industry fell by five percent in 2005.  This was in part attributable to a decline in venture capital investments in software.

This ninth edition of Cyberstates provides a comprehensive review of the high-tech industry nationally and state-by-state by high-tech employment, wages, payroll, establishments, and international trade.  Cyberstates also offers data on venture capital investments and R&D expenditures.

AeA members can purchase the report for $95; non-members for $190.  Please visit www.aeanet.org/cyberstates to download the report, or call 408.987.4200.

Cyberstates 2006 Key Facts

U.S. Tech Employment Edged Upwards in 2005

• U.S. high-tech employment totaled 5.6 million in 2005.
   

• Tech employment was up in 2005 by 61,100 or by 1 percent.
   

• Tech employment had declined by 44,700 in 2004 and by 333,000 in 2003.
   

• High-tech manufacturing industry employment rose by 0.3 percent, gaining 3,300 jobs between 2004 and 2005, the first increase since the tech bubble burst in 2000.
   

• The defense electronics industry grew significantly in 2005, gaining 6,300 jobs.
   

• At the sectoral level, 5 of the 9 tech manufacturing sectors lost jobs in 2005, 4 of the sectors gained.
   

• The communications services sector continued to shed jobs in 2005, losing 42,600.
   

• The software services industry added 43,400 jobs.
   

• The engineering and tech services industry added 57,000 jobs in 2005, putting it at an all time high.
   

• The unemployment rate for electrical engineers was 1.5 percent in 2005, the lowest rate since 2001.

U.S. High-Tech Employment

Note: Data are rounded.

25 Cyberstates Added Tech Jobs in 2004

• California (904,900), Texas (435,400), New York (300,700), Florida (265,500), and Virginia (253,300) led the nation in high-tech employment in 2004, the most recent year for which the state data are available.
   

• Virginia led the nation in tech job growth in 2004, adding 9,100 jobs. Florida was the second fastest growing state with a net increase of 6,700 jobs.
   

• While 25 cyberstates had a net job increase in 2004, 27 cyberstates saw their tech employment decline. California and Texas were two of the states with the largest declines, by 10,600 and 10,500 jobs, respectively. These declines are significantly fewer than in 2003, signaling that the job losses are slowing in these states.
   

• Colorado led the nation in concentration of high-tech workers in 2004, with 88.7 high-tech workers per 1,000 private sector workers. Virginia ranked second, very closely behind, with 88.6 high-tech workers per 1,000 private sector workers.

U.S. Tech Exports Increased in 2005

• U.S. high-tech exports rose four percent to $199 billion in 2005, from $191 billion in 2004.
   

• High-tech exports represented 22 percent of all U.S. exports in 2005.
   

• Some 35 cyberstates saw their electronics exports increase in 2005.
   

• Vermont and New Mexico had the highest concentration of technology exports, representing 84 percent and 77 percent of total exports from these states, respectively.

U.S. Venture Capital Investments Are Mixed

• While U.S. high-tech venture capital investments were down five percent in 2005.
   

• 30 cyberstates saw their total venture capital investments increase in 2005.

Source: Cyberstates 2006

NOTE TO EDITORS: Press releases focusing on U.S. high-tech trade and specific states were released on US Newswire and are available on AeA’s website, www.aeanet.org

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About AeA

AeA, founded in 1943, is a nationwide trade association that represents all segments of the technology industry and is dedicated solely to helping our members’ top line and bottom line.   We do this in partnership with our small, medium, and large member companies by lobbying governments at the state, federal, and international levels, providing access to capital and business opportunities, and offering select business services and networking programs.   For more information, please visit www.aeanet.org.  

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