Fueled by explosive growth at software companies, technology has mushroomed into the nation’s second-largest private industry, with wages far above the national average and strong ties to the rest of the world, according to a new industry-sponsored report.
High technology accounted for about 6 percent of the national economy last year, behind only health care and ahead of such bulwarks as autos, construction and oil and chemicals, according to the study by the American Electronics Association and Nasdaq stock market.
The AEA will use the study, titled “Cybernation,” as ammunition when lobbying government officials for looser rules on export of encryption software, freer immigration policies and other issues, said AEA Chairman Dick Levy, who is executive vice president of Palo Alto, Calif.-based Varian Associates Inc.
“We simply want legislators who are concerned about the economy to understand the clout of this industry,” Levy said in an interview. “I don’t think politicians have recognized this at all.
“It’s been `those crazy guys in California,’ ” Levy said. “But this is a nationwide thing.”
While generally sketching an upbeat picture of the high-tech industry and its prospects, the report offered some sobering warnings: The United States spends a smaller share of its economic output on basic research than Japan, and the U.S. educational system may not be preparing students for high-tech jobs. In international tests of eighth-graders in 1995, the United States ranked 17th of 41 nations in science skills and 28th in math.
The study classified as high-tech industries including computers, consumer electronics, semiconductors, software and industrial electronics. Telephone companies were included, but biotechnology and aerospace firms were not.
Using that definition, high-tech firms employed slightly more than 4 million Americans in 1996, compared with almost 11 million jobs in health care, almost 10 million in education and more than 5 million in construction. All the statistics in the study were drawn from government reports.
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More than half the technology jobs–about 2.3 million–were at service companies, including software firms and telephone companies such as AT&T Corp. and the Baby Bells. Software and data processing companies have accounted for nearly all the growth in technology jobs in the 1990s. High-tech manufacturing companies have shed jobs in the ’90s, but their 1.9 million-worker payrolls are still bigger than any other manufacturing industry.
High-tech jobs always have paid well, but the survey found that wages at tech firms are growing much faster than in the rest of the economy.