Arizona lost 15 percent of its high tech jobs last year, the second sharpest decline nationally, according to a study by the AeA, a national electronics association, which was released early today.
The state shed 18,900 high tech jobs during 2002, leaving 108,800 jobs at the end of 2002, the Cyberstates study said. Only New Hampshire registered a larger percentage loss. Nationwide, the U.S. economy lost 4 percent of its technology jobs.
Arizona took a disproportional hit because it has so much semiconductor manufacturing, a sector that suffered one of the worst depressions in its history last year. Semiconductor manufacturing alone lost nearly 7,000 jobs during the year, but Arizona still ranked third in the nation in number of semiconductor jobs with 28,100, the study said.
The study reported another depressing statistic: Venture capital investments in Arizona dropped 23 percent from the previous year to $209 million.
Still, high technology remains an important part of the Arizona economy. Semiconductors helped the state rank sixth in the nation in high tech exports, amounting to $6 billion in 2002. High technology accounted for 51 percent of Arizona's total exports. The study defines high technology as the fields of electronics manufacturing, communications services, software and engineering and technology services.
Arizona ranked 18th nationally in the number of high–tech workers in those sectors, and high tech firms employed 58 of every 1,000 private sector workers. High-tech workers earned an average wage of $60,312, which ranked 19th nationally and was 82 percent greater than the average private sector wage in Arizona. In addition to ranking third in semiconductor manufacturing employment, the state ranked 10th in defense electronics manufacturing employment with 2,800 jobs and 16th in engineering services employment with 14,500 jobs.
Cory Miller, executive director of AeA Arizona, said the local semiconductor industry is feeling the impact of a move of jobs to foreign countries, but she said the industry still has a future here in research and development, manufacturing advanced chips and manufacturing of other products that for security reasons need to be made on home turf.
“We need to focus on that and grow what we have,” she said. “Biotech may be wonderful, but it is still in the butterfly stage. We already have a bird in hand (the semiconductor industry) with a heck of a history here.”
Nigel Brooks, a business consultant and member of the AeA Arizona executive committee, said the state has other areas of technical expertise that offer potential for economic growth such as water development and quality improvements.
“The Valley is the product of technology,” he said. “There are chronic water shortages all over the world, and we have expertise in this area. This is something that could be leveraged on a global basis.”
Rick Sizemore, a local technology market consultant, said the best strategy for creating jobs in Arizona is to continue developing new ideas and new technologies. “The key is innovation,” he said. “The U.S. is still the leader in that . . . The leading edge technologies are not going to China.”
Arizona manufacturers also need to focus on investment and productivity improvements to remain competitive, said John Kelly, Arizona public affairs manager for Intel Corp. Also evolving fields such as medical and wireless devices offer future growth prospects for the state, he said.