A recent report from The Wall Street Journal suggests that the U.S. technology industry has undergone a “great unraveling.” (“America’s Tech Boom Has a Downside: Not Enough Jobs”)
The fabric that makes up the tech industry has certainly experienced its share of fraying and tearing. But with the ‘needle’ of cloud computing and data analytics, and the ‘thread’ of mobile apps and the Internet of Things, the tech industry is strong and getting stronger as the demand for and supply of new innovations continues unabated.
The tech sector is one of the largest employers in the U.S. economy, with a workforce that exceeds in size construction, finance and insurance, motor vehicle and transportation equipment manufacturing, and many other sectors. The U.S. tech industry accounts for 7.1 percent of overall GDP and 11.6 percent of total private sector payroll.
The tech industry employed 6.7 million people at the end of 2015, up 3 percent from the prior year. This was the highest growth rate in more than a decade, and the fifth consecutive year of growth following the recession-driven declines of 2009 and 2010.
These workers are spread across small business, medium sized companies and large enterprises. According to CompTIA’s IT Industry Outlook for 2016, small tech firms, those with 99 or fewer workers, employ 44.6 percent of tech sector workers, about 3 million people.
About 46 percent of the sector’s total workforce is made up of core technology workers – the network administrators, cybersecurity specialists, software developers, technicians and support personnel that keep the businesses of America connected and communicating. The remaining 54 percent hold non-technical jobs in administration, marketing, sales and other areas.
Another 7.1 million people were employed in core technology jobs in all other U.S. industries at the end of 2015. This total was 2.4 percent higher than 2014.
Self-employed technology workers – independent consultants and contractors and sole proprietors – account for another 1 million tech workers in the U.S. economy. There are millions of “knowledge workers” throughout the economy who use technology and information intensely as part of their day to day jobs. Finally, we’re seeing the emergence of new occupations that require a heavy dose of tech knowledge and skills but are not easily categorized into traditional job categories.
So far from stagnating or under-performing, tech occupations continue to be in strong demand across the economy.
In Q3 2016 there were more than 600,000 total IT job postings in the U.S. Software and application developers, computer systems engineers and architects, IT project managers, computer systems analysts, and computer user support specialists were among the most in-demand positions companies were looking to fill. While not every job posting results in a new hire, this data is a strong indicator of where employers are focusing their technology investments.
Many of these jobs come with salaries well above the average annual private sector wage. Tech industry workers earned an average annual wage of $105,400, 104 percent more than the U.S. average private sector wage, according to CompTIA’s Cyberstates 2016 report. Every state in the union has technology workers earning significantly more than the average private sector worker.
The same report shows that the number of tech sector business establishments in the U.S. has increased from 411,028 in 2009 to 473,461 in 2015.
Much was made in the Oct. 12 story about the decline in U.S. tech manufacturing. Employment data suggests that, after trending downward for most of the past decade, tech manufacturing employment may be stabilizing. At the end of 2015 there were an estimated 1.14 million workers in tech manufacturing, a slight gain of 3,670 jobs over the previous year.
But, again, the raw numbers tell only part of the story. Many occupations within today’s tech manufacturing sector are software or services-related jobs. Look at the top manufacturers today – Intel, Cisco and others – and examine the types of people they have on the payroll, or are trying to hire, and you’ll find that software developers are at top of the list.
The reality of manufacturing today in technology (and other industries) is that it is so efficient we’re able to churn out more products with fewer people. The downside is we have shed manufacturing jobs. The silver lining – at least in tech – is that we’ve moved more people into the software and services side of the business.
Services and software have accounted for 80 percent of new job growth in the IT sector so far in 2016, a reflection of the continued momentum of businesses of all types pursuing digital strategies that are reshaping businesses large and small. This software and services sector is responsible for creating technology solutions that enable workers in other professions to be more efficient and effective in their jobs. Accountants, lawyers, financial analysis, and anyone that uses processes that are automated and digital are benefitting from the products and services trend built and delivered by technology companies and workers.
The tremendous level of ongoing innovation in our industry, making technology more affordable and accessible to more users, has us encouraged about growth prospects for 2016 and beyond.
