Where have the high-tech jobs gone?

Source: PlantServices.com

By Plant Services Staff

Mar 21, 2012

The United States lost 28% of its high-technology manufacturing jobs over the last decade, as the nation’s rapidly shrinking lead in science and technology in the global marketplace was accompanied by a toll on U.S. high-tech jobs, according to a new study released today by the National Science Board (NSB), the policy making body for the National Science Foundation.

One of the most dramatic signs of this trend was the loss of 687,000 high-technology manufacturing jobs since 2000. U.S. multinational corporations also created research and development (R&D) jobs overseas at an unprecedented rate. Meanwhile, China became the world leader in high-technology trade and, for the first time, Asia matched the United States in R&D investments.

Those were among the key findings released today by the NSB, as it unveiled the most comprehensive and up-to-date information and analysis on the nation’s position in science and technology. The biennial report, Science and Engineering Indicators (SEI), highlights trends and factors that have an impact on the nation’s economy, competitiveness and innovation capacity.

U.S. employment in high-technology manufacturing reached a peak in 2000, with 2.5 million jobs. The recession of 2001 provided the first big hit causing “substantial and permanent” job losses, the report said. By the end of the decade, more than a quarter of the jobs were gone.

On top of the lost manufacturing employment, U.S. multinational corporations are rapidly expanding their R&D jobs overseas. From 1994–2004, U.S. firms established R&D jobs abroad at a relatively slow annual rate of 3%, increasing the share of their R&D employment overseas from 14% to 16%. But according to preliminary figures,in the five years after that (2004–2009, the number of new R&D jobs overseas took off, growing to 27% of all R&D jobs at these U.S. firms. Since 2004, about 85% of R&D employment growth in U.S. multinational corporations has been abroad.   

That rapid increase in employment by U.S. firms abroad contrasts with very modest growth in R&D employment in the United States by foreign companies.

The relative shift of R&D to Asia also can be seen in overall expenditures. The United States still does more R&D than any other single country, spending $400 billion in 2009. But, for the first time, the Asian region has nearly matched the United States, with R&D expenditures of $399 billion.

Recent trends also are reflected in the dramatic change in shares of global high-tech exports. After growing from 19% to 22% between 1995 and 1998, by 2010 the United States’ share of the global high-tech exports had dropped to 15%. At the same time, China’s share nearly quadrupled, growing from 6% in 1995 to 22% in 2010.

Asia now produces more than half of all high-tech goods exports worldwide, while the United States and European Union countries each produce 15%. During the 15-year period from 1995 to 2010, Japan’s share fell from 19% to 7%.

Until 1997, the United States enjoyed surpluses in trade of high-tech goods. But by 2010, those surpluses had turned into large annual trade deficits of nearly $100 billion, largely driven by the shift in production of communications and computer goods to Asia at a time of growing U.S. demand. At the same time, China’s 2010 high-tech trade surpluses reached $157 billion, while eight Asian countries (excluding China and Japan) collectively enjoyed trade surpluses of $226 billion.