High-tech industry shows some growth, but future could be slow
The high-tech industry in Chicago has grown at a modest 1 percent rate and shows some signs of staying competitive, said a report that will be released today.
"Cybercities 2008: An Overview of the High-Technology Industry in the Nation's Top 60 Cities," compiled by American Electronics Association, or AeA, shows that Chicago's high-tech industry added 2,300 net jobs, for a total of 164,000 jobs, from 2005 to 2006, the most recent data available.
That puts Chicago in seventh place nationwide, mostly with small- and mid-sized businesses in the software services area. Tech-related production and manufacturing continues to spiral as trends lean more toward a service industry, said Ed Longanecker, executive director of AeA's Midwest Council.
"We have a growing industry here that will offset the technology manufacturing jobs that have been declining," Longanecker said.
The report shows that high-tech production and manufacturing lost about 30,000 job but added more than 138,000 in software services, engineering and tech services nationwide. Schaumburg-based Motorola Inc. and others have numerous layoffs between 2007 and early this year, which were not reflected in the report.
Chicago has about 11,000 high-tech companies, the third most in the nation. The average tech worker in Chicago earned $81,400 in 2006, or 66 percent more than the average private sector wage, the report said.
Some of the more prominent sectors include computer systems design and related services with 41,400 people, fifth nationwide. Telecommunications was also a critical tech sector in Chicago with about 30,600 employees.
"As the nation's 7th largest cybercity, the Chicagoland area represents a critical high-tech cluster," Marty Singer, PCTEL's CEO and chairman of the AeA's Midwest Council, said in a statement. "With educational institutions such as Northwestern, Illinois, IIT, and the University of Chicago, we have a skilled workforce pipeline for the tech industry. We need to do more, however, in attracting venture funds, encouraging more K-12 students to acquire backgrounds in math and science, and creating an attractive tax and health care environment for high-tech industries."
The bottom line is, if Chicago is to create and retain more jobs here, government needs to step up, said Longanecker.
"We need more government-funded programs to encourage entrepreneurs and early-stage opportunities," Longanecker said. "We need to mirror what other states are doing to encourage startups."
The report showed that the top five cities by high-tech employment in 2006 were New York, Washington, D.C., San Jose/Silicon Valley, Boston and Dallas-Fort Worth. The nation's highest tech industry concentration was in San Jose/Silicon Valley, where more than one in four private sector workers were employed by the tech industry. Seattle saw the largest tech industry employment growth, adding 7,800 jobs, with about 128,000 total jobs in 2006.
"Software is huge in Seattle and is anchored by Microsoft, which is still growing," Longanecker said.
Later this summer, AeA will release "Trade in the Cyberstates 2008: A State-by-State Overview of High-Tech International Trade." That report will look at the most recent data on high-tech exports from all 50 states, the District of Columbia, and Puerto Rico.