IT industry shrinks as employer in past decade

Computerworld - WASHINGTON -- In overall numbers, the IT industry employed 6.5 million people in 2001. That number had slipped to 5.9 million by the middle of this year.

In short, the U.S. tech industry as an employer is shrinking, even as it continues to regain jobs lost during the recession.

Although the U.S. continues to lead the world in everything from microprocessors to tablets and supercomputers, overall tech employment is being hurt by an erosion of manufacturing and telecommunications jobs. Some of those losses are being offset by growth in software services, according to the annual Cyberstates report by the TechAmerica Foundation, an industry group that tracks employment and other trends in the tech sector.

Tech companies have been, overall, one of the few bright spots in this economy. The industry has added 115,000 jobs so far this year after losing that exact amount last year, according to TechAmerica.

But the tech industry has seen decreases in employment in certain areas.

In 2000, tech manufacturing employed 1.8 million people in the U.S., but that number had fallen to 1.27 million by June of this year.

Communication services, which includes the wired and wireless segments of the telecommunications industry, Web search portals, data processing providers and hosting services, was also at 1.8 million jobs in 2000, but that figure fell to 1.2 million by June.

One bright spot was software services employment, which was at 1.6 million jobs in 2000 and saw that number increase to 1.77 million by the middle of this year.

Another large category is engineering and tech services, which employed 1.64 million people in June. In 2005, 1.5 million people were employed in that sector.

"There has been a shift in the technology industry," said Matthew Kazmierczak, senior vice president at TechAmerica.

The industry is becoming more specialized, Kazmierczak said. The manufacturing and the technology services that are being done in the U.S. are often for the design and creation of new products and are not necessarily the labor-intensive, production of those goods. As Kazmierczak put it, the IT activity taking place here mostly involves "the high-value creation" of high-tech products.

Kazmierczak points to the latest iPhone, for instance. The design is done in the U.S. but the manufacturing is completed overseas.

Cyberstates uses U.S. Bureau of Labor Statistics data for those businesses that are classified in these tech sector categories. It only captures data about people who are working directly in the technology industry. IT professionals employed by, for example, retailers or financial services firms aren't included.