From 2014-15, tech employment grew 3%—the highest growth rate in the last 10 years. Engineering services, R&D, and testing services employment grew 2.9%, the fifth consecutive year it expanded. And tech manufacturing employment stabilized.
Cyberstates 2016 Report Highlights
Tech Industry Growth
In 2009 and 2010, tech industry employment shrank thanks to the recession. However, since then, the industry has seen healthy growth. From 2014-2015, the tech industry gained 198,156 jobs, giving it year-over-year growth of 3%. That’s a good lead over national employment growth, which sits at 2.1% for the same time period.
The tech sector has a major impact on the national economy. With 6.7 million workers in 2015, the tech industry employs more workers than the construction and finance and insurance industries.
California employed, by far, the most tech industry workers (1,150,000) in 2015—nearly double second-place Texas. However, other states have a higher percentage of tech workers. Just under 10% of Massachusetts’ private-sector workforce has jobs in the tech industry, followed by Virginia at 9.5%.
Engineering Services, R&D, and Testing Services Growth
As a whole, engineering services, R&D, and testing services has seen five consecutive years of increased employment. The sector employed 1.71 million workers in 2015. That number grew 2.9% compared to 2014.
As the Cyberstates 2016 report defines it, this sector is made up of the following subsectors: engineering services; testing laboratories; R&D in biotechnology; and R&D in the physical, engineering, and life sciences.
Engineering services added the most jobs from 2014-15 (26,939). However, R&D in biotechnology grew the fastest with a 3.5% year-over-year change. That’s stronger growth than the engineering services, R&D, and testing services sector overall (2.9%) and the tech industry overall (3%).
The tech manufacturing industry was in the decline for years, but it appears to have recently found solid footing—gaining nearly 4,000 jobs from 2014-15, according to Emsi data.
The Cyberstates 2016 report breaks up tech manufacturing into seven subsectors: computer and peripheral equipment; communications equipment; electronic components; semiconductors; measuring and control instruments; reproducing magnetic and optical media; and space and defense systems. Four of subsectors saw employment gains, while three experienced employment declines.
All four of the largest tech manufacturing subsectors saw employment growth from 2014-15. Computer and peripheral manufacturing in particular grew quickly. With year-over-year growth of 3.7%, it beat the tech industry’s overall growth. Communications equipment saw the other side of the spectrum, with employment dropping 5.1%.
As a whole, the tech industry’s payroll makes up nearly 12% ($708 billion, according to Emsi data) of total private-sector payroll in the US for 2015. That’s an increase of .2 points over 2014 and a significant increase from 2008, when it was 11% of total payroll. This is a little surprising, given that the tech industry only makes up 5.7% of the US private-sector workforce. High average annual wages ($104,500) are why the industry makes up such a large percentage of private-sector payroll.
With $172 billion in payroll, California’s tech sector made up about 25% of the entire tech industry in 2015. The next four largest states (Texas, New York, Massachusetts, and Virginia) have a combined private-sector tech payroll of only $167.4 billion.
It’s no surprise to see Oregon, Washington, and California at the top of any tech industry lists. But with almost $47 billion in gross state product (GSP), the tech industry makes up a whopping 23% of Oregon’s total GSP. The tech industry in Washington makes up about 13% of its GSP. California’s tech industry makes up around 11% of the state’s GSP, but that’s 11% of a very large economy—nearly $233 billion.
The fact that Colorado’s tech industry accounts for nearly 12% of the state’s GSP is somewhat surprising. Drilling down, the bulk of that comes from the telecom and broadcasting detailed industry.
Internet of Things
We’re already seeing many home automation devices and other internet of things (IoT) tools. As the IoT increases momentum, CompTIA notes that demand for internet-connected devices will increase. This should continue to fuel growth across the tech industry, from manufacturing to software development.
CompTIA also indicates that cyber threats will receive more attention in the future. Cyber threats are a constant source of worry for corporations and are becoming more worrisome for individuals every day. Because of this, we can expect businesses to invest more in cyber security. Especially with high-profile security breaches in recent years, large businesses need to double down on cybersecurity expertise. A data breach is very expensive, as it can damage customers’ trust and willingness to buy a company’s products.
In the Cyberstates 2016 report, CompTIA uses Emsi and other data sources to focus on a relatively small subset of industries and occupations that are involved in making, creating, enabling, integrating, or supporting technology. In total, this definition of the tech industry covers 50 sectors. For the first time in a Cyberstates publication, the 2016 report also looks at 51 tech occupations. Other analyses, like Civic Analytics’ recent post before South by Southwest, use CompTIA’s tech industry definition.
The numbers for jobs, wages, payroll, and establishments in the Cyberstates 2016 report all come from Emsi, which is based on data from the Bureau of Labor Statistics and other government sources. Most of the statistics for average annual employment, total wages, and establishments, comes from the Quarterly Census of Employment and Wages (QCEW) program.
As the authors note, the BLS doesn’t report on the data it has collected immediately. 2015 data was not finalized when the Cyberstates 2016 report was published—and as such, its 2015 data should be considered preliminary. In order to get the report out in a timely manner, CompTIA used some projection data from Emsi for 2015 employment and payroll data.