High-tech employment
continues steady growth

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O

ver the last eight years, employment in the Colorado high tech industry has held its own and more, despite the ravages of the 2009-10 recession.

According to a TechAmerica study, at the end of 2012 the tech industry boasted 162,648 workers among the state’s estimated private sector workforce of about 1.9 million. While the tech segment cannot match the size of the state’s largest industries (e.g., agriculture, tourism and mining), high tech employs a solid 8.7 percent of the labor force.

employ-trends-buttonColorado’s tech employment numbers are also a good bit larger than most of the country. Nationwide, the industry employs about 6 million people, which represents just 5.4 percent of the total private sector U.S. workforce of about 108 million. Among all 50 states, Colorado ranks 15th in number of high tech employees.

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While the state’s tech sector grew by only 600 jobs in 2012, the gain follows a substantial increase of more than 5,000 jobs in 2011. The two years of growth have put a considerable dent in the employment losses suffered during the 2009-10 recession. Between 2009 and 2010 the industry lost a total of nearly 10,000 jobs from a 2008 high of 166,300 workers.

When all is said and done, the renewed momentum leaves the employment number 2.2 percent lower than the peak in 2008, compared to a drop of 3.2 percent during the same period nationwide.

Meanwhile, the concentration of tech workers in Colorado has remained rock steady between 8.6 percent and 8.7 percent of the state’s workforce for the past eight years. That number has put Colorado in third place among all states for each and every year since 2005. The only states with a higher concentration of tech industry workers in 2012 were Virginia (9.7 percent) and Massachusetts (9.1 percent).

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As a whole, the U.S. tech industry added 67,400 jobs in 2012, for a total of 5.95 million workers. Although the growth is a modest 1.1 percent, it represents the second year in a row that the tech industry has added jobs after bottoming out in 2010.

According to the report, 39 states added tech jobs in 2012, with the largest gains in California (+17,700), Texas (+10,000), New York (+8,400), Michigan (+6,200), and Georgia (+4,500). The top three states for tech employment were California (968,800), Texas (485,600), and New York (318,200).

As the country’s tech employment leader in 2012, California had more than twice as many as second ranked Texas and more than three times as many as third ranked New York. Virginia surpassed Florida in 2009 to establish itself as the fourth largest technology state by tech employment. In 2012, Virginia had 285,400 tech industry workers compared with 270,900 for Florida. Virginia also continued to lead the nation in the concentration of tech workers with 9.7 percent of its workforce in the tech industry, compared with a national average of 5.4 percent.

California was also the fastest growing between 2011 and 2012, adding 17,700 tech jobs. Texas, which added 10,000 jobs, and New York, which added 8,400 jobs, were runners up. The fourth and fifth largest net gains were in Michigan and Georgia, which added 6,200 and 4,500 net jobs, respectively.

At the other end of the spectrum, 13 states experienced a modest drop in tech employment. New Mexico saw its tech employment drop the most, losing some 1,200 net tech jobs.
Of the four technology industry sectors that make up the tech industry, three experienced job growth. Software services added the most jobs with an increase of 63,900 in 2012, followed by engineering and tech services (+11,300) and Internet and telecommunication services (+1,800).

After years of jobs losses, Internet and telecommunication services inched up for the first time in five years to a total of 1.2 million in 2012. The growth was largely driven by the Internet sector as most of the telecommunication sectors continued to experience declines. The telecommunication sectors include wired, wireless, satellite, and resellers, while the Internet sectors include data processing, hosting, Internet publishing, web search portals, and related services.

The software services industry had the most growth of all the four industry sectors in 2012, accounting for the bulk of growth in the tech industry overall. This sector grew by 3.5 percent, adding a net 63,900 jobs. The software services industry includes software publishers, computer systems design, custom computer programming, facilities management, and other computer-related services.

Colorado has significant technology clusters in the software publishers segment, ranking 6th in the nation with 12,500 workers in the sector. It also has 37,300 workers in Internet and telecommunication services and 30,900 workers in engineering services.

Engineering and tech services employment totaled 1.63 million in 2012, up 11,300 from 2011. This is the second year in a row of slight increases for this industry sector. Of the four industry sectors, engineering and tech services ranked second by employment growth. The engineering and tech services sector includes engineering services, testing labs, R&D in biotechnology, R&D in the physical and life sciences, and computer training.

Tech manufacturing, hit particularly hard during the recent recession, saw a continued decline, losing some 9,500 jobs in 2012. Within the tech manufacturing segment, six sectors saw employment decline, while three had net job increases. The largest decline was in the space and defense industry, which lost 5,500 jobs. The largest increase was in measuring and control instruments manufacturing, adding 2,400 jobs.

Unemployment rates in most tech occupations remained far below the national average unemployment rate of 8.0 percent in 2012.

The report measures how many workers are employed by the tech industry, not how many information technology workers are employed in the U.S. economy.

Bear in mind that the TechAmerica report measures how many workers are employed by the tech industry, not how many information technology workers are employed in the U.S. economy.

NEXT: Rising salaries for tech workers in Colorado

Check out charts showing specific sector employment trends

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