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High-Tech Hotspots: a Roadmap

New technologies, the demand for quality workers, business-friendly cities, and access to more power are driving high-tech industries toward traditional tech hubs, and to some growing locations that are taking advantage of the boom.

Cynthia Kincaid , Kincaid Strategic Partners (Oct/Nov 08)
Here in the United States, high-tech industries, once firmly set in a few places like California's Silicon Valley, are now finding homes in states across the nation. According to the Milken Institute's 2008 State Technology and Science Index, Massachusetts leads as the state in the best position to achieve high-quality economic growth because of its vast array of technology and science assets. The index also named Maryland, Colorado, and California as additional top locations for high-tech of the future. "States that have a vision and a plan for building and retaining high-wage jobs and viable industries are finding ways to invest in their science and technology assets," says Ross DeVol, Milken's director of regional economics.

To be sure, other regions are emerging with their own specialties when it comes to high-technology pursuits. The Midwest is developing a leading edge in biofuels and wind energy; the East, Northeast, and Southeast for high-tech healthcare and biotechnology; and the West for solar and wind energy. "Sacramento is unique because it has a tradition of having clean technology and energy efficiency technology, with a research anchor at the University of California-Davis," says Bob Burris, deputy director at the Sacramento Area Commerce & Trade Organization (SACTO). "Sacramento has always had somewhat of a cost advantage over some of the other areas in California, so we're seeing a lot of companies bringing their manufacturing out here."

Demand for Educated Employees
Access to qualified labor pools is a growing concern to many high-tech businesses; those companies looking to locate or relocate to a particular area need to know they can depend on their selected region to supply its own labor.

According to the AeA's Cyberstates 2008: A Complete State-by-State Overview of the High-Technology Industry, Texas remains the second-largest cyberstate by tech employment, behind California and ahead of New York. High-tech industries in Texas paid out $37.5 billion in payroll in 2006, the most recent year for which statistics are available. The Texas average tech industry wage in 2006 was $81,600. "With another solid year of growth under its belt, Texas' tech industry continues to be on the upswing - much like the technology industry as a whole," says Douglas J. Bartek, chairperson of the AeA Texas Council.  

The report also says that Arizona remains a critical location for the semiconductor industry with 23,900 jobs in 2006, making it the fourth-ranked state nationwide in the industry. "Arizona's high-tech industry has now seen three straight years of job growth," says Brenda McCaffrey, president of White Mountain Labs. "This is a boon to the Grand Canyon State because tech industry jobs pay wages that are 88 percent higher than the state's average private-sector wage."

California's high-tech industries also added 21,400 jobs, a 2 percent increase, for a total of 940,700 in 2006. "The people and leaders of California - and Silicon Valley in particular - continue to find new ways to innovate and new industries to develop," says Deirdre Hanford, chairperson of the board for AeA and a senior vice president at Synopsys, Inc. "However, maintaining the Valley as the preeminent high-tech hub in the state, the country, and the world will depend on a number of variables. These include maximizing the skills of a diverse work force, improving the quality of our education system, and investing in research and new technologies, such as green technology."

Other states that AeA says lead in high-tech employment include New York, Florida, and Virginia. In fact, for the second straight year, Virginia led the nation in concentration of high-tech workers in 2006, with 91 high-tech workers per 1,000 private-sector workers. Overall, Cyberstates reported U.S. high-tech employment totaling 5.9 million in 2007, up by 91,400, or by 1.6 percent. This is down from the 139,000 jobs added in 2006 and the 87,400 jobs added in 2005.

Electronics, Semiconductors, and Nanotechnology
The consumer electronics and semiconductor industries continued their rising growth, with the Consumer Electronics Association (CEA) predicting $173 billion in consumer electronics sales in 2008, a 7.3 percent boost over 2007 revenues. "While there remain significant risks to the downside in the broad economy, we are beginning to see subtle, positive shifts in consumer sentiment," says Shawn DuBravac, CEA's economist. "Consumer electronics remain a vital part of people's everyday life, and an increasing appetite for technology is especially encouraging as we head into the fourth quarter and the holiday shopping season."

The semiconductor industry is also up almost 6 percent over last year, thanks to continued demand for computers and cell phones. "The back-to-school period is crucial for many CE manufacturers and retailers, so it is an encouraging sign that consumer sentiment remained strong in August," says Claudia Haase, director of research at CNET. "The overall economy may be facing headwinds, but consumers appear optimistic about the laptops, MP3 players, and cell phones that have become indispensable for today's students."

With increased consumer demand and concerns about qualified employment in these industries reaching a critical stage, a number of universities are working together and with private partners to update curricula and mentor students interested in high-tech careers. In Nebraska, for example, the Peter Kiewit Institute brings together students at two University of Nebraska campuses in a special high-tech academic program that combines computer science and engineering studies.


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