New Study: For Every New High-Tech Job, Four More Created

When it comes to creating jobs in California across a wide range of income levels and employment sectors, a new report by the Bay Area Council Economic Institute and commissioned by Engine Advocacy concludes it pays to play to your strengths. For much of the Bay Area and other regions in the state, high-tech jobs are where the action is. The report – Technology Works: High-Tech Employment and Wages in the United States – shows that high-tech jobs have been more resilient over the past 10 years to economic downturns than other private sector industries, pay more, create more indirect jobs by far than any other industry and hold the most promise for continued growth. We were pleased to hand Governor Brown a copy of the report yesterday fresh off the presses.

Among the key findings:
— Employment growth in tech jobs — defined as those most closely related to science, technology, engineering and math (STEM) — outpaced gains in all other occupations by a ratio of 27 to 1 from 2001 to 2011.
— For each job created in the high-tech sector, approximately 4.3 jobs are created (multiplier effect) in other local goods and services sectors across all income groups, including lawyers, dentists, schoolteachers, cooks and retail clerks, among many others.
— The jobs multiplier effect in the high-tech sector is significantly higher than for almost any other sector. By comparison, traditional manufacturing has a multiplier effect of 1.4 jobs.
Demand for high tech occupations will be considerably stronger than demand for other workers at least through 2020.

Using federal labor statistics, the report also shows that while California continues to dominate in high-tech jobs the Golden State is not the only game in town. There was sobering news for Silicon Valley, which didn’t crack the top 25 among high-tech regions with the biggest percentage job gains. High-tech jobs are increasingly popping up in states and regions that historically have not been associated with high tech, including in the Rust Belt and South. This has important implications at a federal level for how jobs and economic policy is shaped. But the study’s findings don’t suggest that California should necessarily engage in hand-to-hand combat with other states for these jobs. According to another recent study by the Economic Institute, how the vast majority of jobs get created or destroyed in the Bay Area has little to do with companies moving in or out of the region and more to with the survival rate of start-ups across all sectors. The availability of high-skilled workers, inadequate housing supply that drives up costs and burdensome regulation have a bigger role in deciding the survival of new firms and job growth than what other states might be doing to lure away companies.