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Study examines Georgia’s
shrinking high-tech sector
Nancy
Fullbright
Economic Development Institute
According to a new Georgia Tech study, the economic downturn has cost
Georgia its national lead in high-tech job growth. Analysis of federal
and state employment data shows that over the past two years, Georgia
has lost high-tech employment more rapidly than the national average –
a total of 21,000 jobs between the end of 2000 and the end of 2002.
High-tech jobs are important economically because of their generally high
wages. As recently as 2001, a study by the industry organization American
Electronics Association (AEA) had ranked Georgia ahead of all other states
in growth of this industry sector.
“Georgia did well in adding high-tech jobs in the boom years of
the 1990s,” says researcher Philip Shapira, a professor in Tech’s
School of Public Policy. “But, following a peak at the end of 2000,
Georgia’s high-tech jobs total has declined in every subsequent
quarter.”
Still, despite losing high-tech jobs overall at a rate faster than the
nation, several sectors within the technology industry saw employment
gains. Jobs in engineering and architectural services (5 percent), research
and testing services (12 percent) and drug manufacturing (8 percent) grew
in Georgia between 2000 and 2002.
“Georgia has special capabilities in these areas,” notes Jan
Youtie, a researcher in Tech’s Economic Development Institute who
co-authored the study with Shapira and Public Policy Doctoral Student
Jue Wang.
The study indicates that Georgia’s competitive advantage lies in
research- and service-related technology sectors. In particular, three
service industries make up more than 70 percent of Georgia’s high-tech
sector: telecommunications services, computer and data processing services
and engineering services.
Georgia’s specialty is in knowledge-intensive high-tech services
rather than manufacturing, according to Youtie. “High-tech services
in Georgia are often overlooked despite outperforming high-tech manufacturing
in employment scale and average wages.”
Overall, Georgia’s high-tech industries paid very well compared
to the average private sector firm. Average weekly wages for employees
in Georgia high-tech establishments in 2001 were $1,192, compared to $684
for all private-sector employees. That has magnified the economic impact
of the job losses, Shapira notes.
“These are much higher wage jobs, so it’s nice when they go
up. But when they go down it takes a disproportionately greater amount
of money out of local economies,” he says.
Unlike past employment losses where jobs moved overseas, the recent high-tech
losses in Georgia appear mostly unrelated to low-wage foreign competition,
says Shapira.
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