Transcript Post Recession High Technology Employment Change

New Hampshire High Technology:
The Future is Now
NetworkNH
April 2005
High Tech NH: What we will cover….:
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Recent trends with comparisons to other
states with significant technology
concentrations and US averages
Why we should care about high technology
employment and industries in NH
Vulnerabilities
Opportunities
Areas to focus efforts looking forward
High Tech in NH: Summary Points
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Decline in high technology employment commenced in
December 2000 in NH and other technology states

The decline in percentage terms was more pronounced in
NH than other states

The decline was concentrated in contract and commoditylike non-defense related manufacturing

NH has dropped in rank in high technology employment
concentration from 1st in mid-1990s to 3rd in 1998 to 10th
among 50 states (American Electronics Association)
Continued strong employment base in defense-related high
tech industries, in particular… control and measurement
instrumentation manufacturing, and high tech services
Technology employment “recovery” starting in Oct 2003 has
been stronger in NH than most other states
NH has resilient high technology economy…the future is bright
if vulnerabilities are addressed and opportunities captured
High tech decline in NH (in green) and other states began in Dec 2000.
Recovery started Apr 2003 (VA & MD), Oct 2003 in NH and Feb 2004 (MA).
NH had greatest percentage decline but has greatest upturn since Oct 2003
Indexed Growth in High Tech Employment Jan00 to Jun04
130
CO
120
MD
MA
NH
VA
NE
US
Dec-00
110
Apr-03
100
Apr-03
90
Jan-04
80
Jan-04
Feb-04
Oct-03
70
May-04
Mar-04
Jan-04
Nov-03
Sep-03
Jul-03
May-03
Mar-03
Jan-03
Nov-02
Sep-02
Jul-02
May-02
Mar-02
Jan-02
Nov-01
Sep-01
Jul-01
May-01
Mar-01
Jan-01
Nov-00
Sep-00
Jul-00
May-00
Mar-00
Jan-00
60
High Technology Employment Boom, Bust and “Recovery”
After boom in NH in mid to late-1990s (+15%), then sharpest decline (-36%),
New Hampshire (+9.2%) has experienced strongest “recovery” in total
technology employment. Other high tech states are experiencing much more
modest percentage gains in high tech employment …with the two leading tech
(concentration) states Mass. and Colorado lagging US recovery
Total High Tech Employment Change Over Selected Time Periods (Rates)
20%
14.5%
14.4%
10.9%
9.2%
10%
9.1%
8.7%
8.7%
5.1%
2.5%
1.0%
0.8%
0.7%
0%
NH
VA
-10%
MD
US
MA
CO
-25.4%
-24.9%
-8.2%
-14.0%
-20%
-19.6%
-30%
Pre Recession
-36.0%
-40%
Recession
Post Recession
High technology resiliency (employment % change 2003-2004):
NH compared to other high tech and New England States
Total High Tech Employment (June to June)
State
03--04
Rank
New Hampshire
7.8%
4
Virginia
4.1%
7
Vermont
3.2%
8
Maryland
1.7%
15
Rhode Island
-1.1%
26
Connecticut
-1.9%
31
Colorado
-2.2%
34
Massachusetts
-2.4%
35
Low- and High-lights of High Tech Employment Change
New Hampshire 2000-2004
•
Decline in high technology manufacturing without recovery of lost jobs
– Semiconductors
– Printed Circuit Boards
•
Pronounced retrenchment in some sectors of high technology services in the tech
“bust” of early 2000s
–
–
–
–
•
Wired Tele-Communications Carriers
Data Processing / Warehousing
Tele-Communications Resellers
Software Publishing
Stable Base of Defense-Related Industry. Employment helped state significantly
during recession and recovery
– Search and detection instrument manufacturing…
– One-fifth of all tech jobs now in this one defense-related sector
– Without this industry tech employment would have declined more than 40 percent
•
Resilience in some high technology service industries with recovery in last year
–
–
–
–
Engineering Services
Computer Programming
Computer System Design
R&D Physical, Engineering and Life Sciences
High tech manufacturing has not experienced a recovery in
US or any technology state …New Hampshire’s growth rate of 7.5%
is after a nearly 50% decline …yet return to growth in manufacturing is
noteworthy compared to continued decline in other tech states
Employment Change in High Tech Manufacturing Industries Over Selected Time Periods (Rates)
30%
19.8%
20%
11.7%
9.9%
10%
7.5%
8.7%
6.4%
0.9%
0.9%
0.9%
1.0%
0%
NH
US
CO
MA
VA
MD
-10%
-12.6%
-14.4%
-20%
-21.5%
-30%
-30.1%
-30.2%
-31.5%
-40%
-43.1%
-50%
-60%
-47.0%
Pre Recession
Recession
Post Recession
Concentration in manufacturing within high technology in NH
compared to US average contributed to pronounced decline,
2/3rds in NH compared to 1/3rd US average in late 1990s.
Now down to below 60 percent of high technology employment
MA
ME
NH
RI
US
High Tech Manufacturing as a
High Tech Services as a High Tech Telecommunications
Percentage of Total High Tech Percentage of Total High Tech as a Percentage of Total High
Employment 2003
Employment 2003
Tech Employment 2003
40.5%
41.4%
8.4%
28.3%
48.3%
15.3%
58.2%
28.1%
5.4%
36.9%
42.3%
12.5%
32.3%
44.0%
16.4%
High technology services are recovering in many technology
based states…New Hampshire (7.4%) and Virginia (9.0%)
both have growing engineering service and custom computer
programming employment bases
Employment Change in High Tech Service Industries Over Selected Time Periods (Rates)
25%
20.3%
20%
15%
0.118289976
10.9%
10%
9.1%
9.0%
8.4%
7.4%
7.2%
7.1%
5.7%
5%
3.4%
2.7%
1.8%
0.022585571
-0.1%
0%
VA
NH
MD
CO
US
MA
NE
-5%
-5.3%
-10%
-10.9%
-15%
-0.149863701
-17.1%
-20%
-18.7%
-21.7%
-25%
Pre Recession
Recession
Post Recession
New Hampshire Detailed High Technology Sectors:
Sectors of Growth and Decline….
In NH Jan. 2000 to June 2004 & Oct 2003 to June 2004
With growth in blue, in decline in red, purple with potential to grow
Industry Name
NH
Jan 00 to
Jun04
NH Oct03 to
Jun04
Cable & Other Program Distribution
990
984
Optical Instrument & Lens
545
293
Engineering Services
199
32
Custom Computer Programming
179
363
Analytical Laboratory Instruments
139
195
Computer Systems Design
-366
201
R&D Physical, Engineering, & Life Sciences
-553
151
Semiconductor & Related Devices
-1076
-92
Software Publishers
-1150
-96
Bare Printed Circuit Boards
-3119
-67
Why should we promote high technology
industries in New Hampshire?
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States on the leading edge of technological
innovation have the highest per capita income in
the nation.
High Tech jobs pay 75% higher wages than other
industries.
1/3rd of NH Gross State Product directly or
indirectly tied to high technology.
High technology industries are the engine of
growth. It is the key sector in the research and
development (R&D), innovation and new product
development base of the state’s economy
High positive correlation between high tech employment
concentration and per capita income across the 50 US states.
NH in the “elite” group of high tech and high income states
High Tech workers per 1000 private sector workers correlated to per
capita income Median lines denote US Avg($30906,51.6)
120
High Tech Worker Concentration
CO
VA
100
MA
CA
MD
80
NJ
NH
60
15000
20000
25000
30000
40
35000
20
0
Per Capita Income
CT
40000
45000
50000
R&D: Building on the base..the role of high
technology defense-related industries
• We estimate that high technology DoD contractors in the
state -- through direct and in-direct (through the DoD)
R&D investments in the state -- account for greater than
one-third of the total private sector R&D investment in
the state.
• Without the defense industry, New Hampshire would
drop to well below the median in total R&D spending per
capita and the state’s ability to compete and grow in high
technology would suffer significantly.
• Close to 50 percent of all federal R&D funding and 90
percent of all federal R&D funding of industry in New
Hampshire is from the DoD.
Yet, NH (in green) below US average and all New England
states and experiencing a decline in DoD $’s in contracts
per worker.. (even with BAE Systems as a “constant”)
Defense Procurment Contracts Per Worker
6000
5000
Dollars Per Worker
4000
3000
2000
1000
0
1985
1986
1987
1988
1989
Connecticut
1990
Maine
1991
1992
1993
Massachusetts
1994
1995
New Hampshire
1996
1997
1998
Rhode Island
1999
Vermont
2000
2001
U.S.
2002
2003
New Hampshire High
Technology: The Future is
Now
Building on strengths
addressing weaknesses….
New Hampshire can leverage specific strengths to
sustain a high tech economy
Technology
Culture and
History
Favorable
business and
tax climate
Proximity to
Boston
Route 128
Cambridge
Dynamic
High Tech
Economy in
New
Hampshire
Quality of life
as a magnet for
high skilled
workers and
entrepreneurs
Access to
financial
capital
The Education Advantage: Educational Attainment
and High Technology Employment Concentration
Percentage Of Population (25+) With Bachelors Degree 2000 vs. High
Tech Employment Concentration
14%
HT Emp Concentration
12%
MA
VA
US Avg (15.2% , 6.12% )
NH
CO
10%
MD
8%
6%
8%
10%
12%
14%
16%
4%
2%
0%
Percent w/ BA
18%
20%
22%
24%
Milken Technology and Science Indicators
for NH…The Main Strengths
TECH & SCI INDEX COMPONENT
RANK 04 RANK CHANGE 02-04
Households With ComputersPercent, 2001
2
1
Households With Internet AccessPercent, 2001
2
-1
R&D Expenditures on Environ SciencesUS$ Per Capita, 2001
3
1
# of Companies Receiving VC Investmentper 10,000 Business Establishments, 1993 - 2002
3
4
Venture Capital InvestmentAs Percent of GSP, 2002
3
3
Intensity of Software Engineers, Systems SoftwarePer 100,000 Workforce, 2001
8
-2
Milken Institute Overall Technology and Science Index Rank
NH ranks 12th ..but behind 3 other New England states..
and competitor states, e.g., Rhode Island, New Mexico and
Oregon, catching up fast.
State
Rank (2004)
Rank (2002)
Massachusetts
Colorado
Maryland
Virginia
Rhode Island
New Hampshire
New Mexico
1
3
4
5
11
12
14
1
2
4
5
21
13
20
Change in
Ranking
(2002-2004)
0
-1
0
0
10
1
6
Weaknesses
TECH & SCI INDEX COMPONENT
State Appropriations for Higher Educationper Capita, 2003
State Spending on Student Aidper Capita, 2001
Intensity of Computer ProgrammersPer 100,000 Workforce, 2001
IPO Proceedsas Percent of GSP, 2000 - 2002
Number of Graduate Students in Sci & Eng25 - 34 Age Cohort, 2001
Intensity of Computer Hardware EngineersPer 100,000 Workforce, 2001
Recent Bachelor's Degree in Sci or EngPercent of Civilian Workforce, 2001
Number of Science & Engineering PhDs Awardedper 100,000 People (25 - 34 Age Cohort), 2001
RANK 04 RANK CHANGE 02-04
50
-3
45
-1
43
-3
39
-12
38
-3
38
-14
37
-10
36
-2
Largest decline 02-04 in Milken ranks…
Vulnerabilities…
TECH & SCI INDEX COMPONENT
Microbiologists per 100,000 Workforce, 2001
Net Formation of High-Tech Establishments per 10,000 Business Establishments, 1999
% of Bachelor's Degrees Granted in Sci & Eng2000
Intensity of Computer Hardware EngineersPer 100,000 Workforce, 2001
Industry R &D $'s per capita, 2000
IPO Proceeds as percent of GSP, 2000 - 2002
Recent Bachelor's Degree in Sci or Engineering, % of Civilian Workforce, 2001
RANK CHANGE 02-04 RANK 04
-21
32
-20
28
-15
35
-14
38
-13
21
-12
39
-10
37
Comparing 50 state rankings…NH compared to high tech states that rank
higher in concentration. Committee for Economic Development (CfED), 2004.
The “gaps in rank” …NH lags on labor pool with advanced technical
education, new companies, Fed R&D, and technology “spin-outs”. Does well
in general education and technology orientation of the population .
Variable
Graduate Students in Science & Engineering
Five Year Change in New Companies
Job Growth Due to New Business
PhD Scientists & Engineers
Initial Public Offerings
Loans to Small Businesses
Federal Research & Development
University Spin-outs
Private Research & Development
High School Completion
Technology Industry Employment
New Companies
Venture Capital Investments
Manufacturing Investment
University Research & Development
College Attainment
Patents Issued
Business Closings
Households with Computers
Net Migration
High School Attainment
NH
CO
MA
VA
NM
MD
Avg-NH
39
44
41
22
25
46
13
26
33
36
11
16
3
21
4
2
6
11
2
8
2
4
24
15
9
16
17
14
34
21
46
2
3
6
12
17
6
9
2
6
39
16
1
5
13
2
1
49
3
3
22
12
3
25
1
33
2
4
3
22
17
49
30
11
19
12
13
4
31
4
4
43
28
6
22
10
49
38
5
32
18
18
10
22
12
4
37
1
25
43
2
16
3
41
10
17
8
18
7
40
27
32
42
16
40
6
14
21
5
6
40
1
32
44
26
8
12
11
31
1
1
23
46
8
22
10
-26.8
-25.7
-17.8
-13.3
-12.2
-8.3
-6.8
-6.8
-5.3
-4.5
-4.3
-0.2
3.5
6.3
7.5
7.7
10.7
10.8
13.5
16.0
18.0
Network NH
Looking Forward
Working collaboratively with
other groups across the state
New Hampshire High Technology:
The Future is Now
Key Policy Areas
•
•
•
•
•
Technology Workforce Development with a focus on science and
engineering education, strengthening links between high tech businesses
and higher education, and creating an internship network
Address gaps in Financing… private angel networks and the Archimedes
Fund
Enhance investment in Research & Development… stimulating private
investment in the state with R&D tax credit (HB 466) and National Science
Foundation’s Experimental Program to Stimulate Competitive Research
(EPSCoR)
Leveraging and growing Defense and Homeland Security related industries
…foster commercial spin-offs with increased contracts and collaborations
among businesses and with congressional representatives and state
government.. Help NH arrest decline in DoD contracts relative to US
average and rise to and above US ave. on DoD contract $’s per worker and
as percent of GSP
Promoting and Branding the State as a destination for high technology
industries, skilled workers and entrepreneurs…. Highlight quality of life,
business climate and economic resiliency