WASHINGTON - The U.S. high-tech industry lost 25,000 jobs in 2004,
dropping to 5.6 million, say a study released today by AeA. The decline represents a considerable
slowdown in technology jobs lost, compared to the 333,000 jobs lost in
2003 and the 612,000 jobs lost in 2002.
"The good news is that the technology industry looks to have turned a corner," said AeA president and CEO William T. Archey. "For the first time since 2000, both software services and engineering and tech services added jobs. Each of these tech sectors added over 30,000 net new jobs to the economy in 2004. This is especially positive news because tech jobs pay 84% more than the average private sector job."
AeA found that all but four states lost high-tech jobs in 2003, the most recent year for which state data are available. California and Texas lost the greatest number of tech jobs, shedding some 67,800 and 32,900 jobs, respectively. Despite these losses, California and Texas remained the leading cyberstates by employment, followed by New York and Florida. However, Virginia displaced Massachusetts in 2003, becoming the fifth largest state by technology employment. And, while Colorado remained the nation's leading cyberstate by concentration of high-tech workers, Virginia also moved up by this metric to second place.
The report also found that venture capital investment in the technology industry rose for the first time since 2000. High-tech venture capital investment totaled $11.8 billion in 2004, compared to $10.7 billion in 2003. Archey stated, "While the tech industry is beginning to make some headway, we need to be aware of increased challenges to our lead in science and technology as competition from the rest of the world intensifies. We need to pay particular attention to the factors that drive technology innovation, primarily a highly educated and skilled workforce and research and development."
SAN JOSE - Although U.S. semiconductor manufacturers still have 47% of
the worldwide chip market, only 20% of state-of-the-art production facilities
now under construction are in the U.S. Lower tax rates and incentives that
reduce the cost of capital in other countries - not lower labor costs - are the
principal reasons why most new manufacturing facilities currently being built
are outside the U.S., according to the Semiconductor Industry Association.
"A
dramatic shift in semiconductor manufacturing is now under way," said SIA
president George Scalise in testimony before the US-China Economic and Security
Review Commission in Palo Alto,
CA, on April 21.
"Approximately two-thirds of the 300mm wafer fabrication facilities now
under construction worldwide are in Asia, with a significant portion of those
facilities in China.
Chinese government policies - not lower labor costs - are the principal factor
in a differential of more than $1 billion in the 10-year cost of building and
operating a 300mm wafer fab in the U.S.
versus China,"
Scalise said.
"Even
an 80% differential in wage rates between China
and the U.S.
is not a major factor in plant location decisions because semiconductor wafer
fabrication facilities are capital- and technology-intensive," Scalise
continued. "Government incentives such as favorable tax treatment and
other assistance programs account for approximately 90% of the cost
differential. Like it or not, the reality is that government incentives play a
major role in where investment takes place. Given the critical importance of
semiconductors in driving U.S.
economic growth and ensuring our national security, maintaining a competitive
semiconductor manufacturing capability and a supporting ecosystem must be an
important priority for America's
federal and state governments."
Scalise
said the U.S.
needs a coordinated strategy to reduce the cost differential created by foreign
government tax and incentive policies. He recommended a number of specific
actions that Congress should take to change policies that discourage investment
in capital-intensive manufacturing facilities in the U.S., including:
•
Providing federal tax holidays to match the tax holidays offered by overseas
competitors.
• Making
the R&D tax credit permanent and enacting enhancements to make it more
effective.
•
Allowing companies to expense high-tech manufacturing equipment in order to
improve cash flow and stimulate investment in new equipment.
•
Re-examining international taxation rules and considering alternatives to the
current rules on taxing foreign-source income.
•
Enacting significant tax rate reductions to make manufacturing costs in the U.S. more
competitive with costs in other countries.
"Leadership
in semiconductor technology is ours to keep, or ours to lose. The investments
and policy changes needed to allow U.S. manufacturers to compete in
the face of foreign incentives designed to lure investment offshore are neither
easy nor inexpensive, but it is vital that we make them. The first step is that
we must choose to compete," Scalise concluded.
The full
text of the SIA testimony can be found at https://www.sia-online.org/downloads/testimony_china_050421.pdf.
FRANKLIN, MA- Effective immediately, Powell Industries will represent Speedline Technologies in the states of Washington, Oregon, Idaho and Montana, and in British Columbia.
Headquartered in Issaquah, WA, Powell Industries has additional offices in Tukwila and Spokane, WA, and Beaverton, OR.