Out of Work? Software Services is Hiring

Technology companies have taken a hit during the current economic downturn, but the industry is faring better than the economy as a whole, according to a Tuesday report. In the fourth quarter of 2008, the tech industry had a 0.6 percent drop in employment, or 38,000 jobs. Total private sector employment, meanwhile, declined 1.3 percent, according to TechAmerica, a new group formed by the merger of AeA and the Information Technology Association of America (ITAA).

"The U.S. high-tech industry continued to add jobs in 2008; however, future growth is clearly jeopardized as a result of the current economic downturn and the volatility of global financial markets," Christopher W. Hansen, chief executive of TechAmerica, said in a statement. "While we suffered losses in the fourth quarter, our industry has weathered the storm better than most, and the results of our report indicate that the tech industry is well positioned to help lead America's economic recovery."

Assisting in that recovery will be funds from the economic stimulus package, said Philip Bond, president of TechAmerica.

"In crafting the stimulus bill, Congress and the Obama administration put their trust in the transformative power of technology to build infrastructure for the 21st century, modernize our education and healthcare systems, and create smarter and more efficient ways to use energy," Bond said.

The report found that the two strongest sectors were software services, which added 86,200 jobs in 2008, and engineering and tech services, which added 26,600 jobs. But high-tech manufacturing saw a decline of 23,100 jobs, while communications services lost 12,700 jobs.

The results are part of the twelfth annual Cyberstates report, which studies the tech industry on a state-by-state basis. Though the national data is from 2008, TechAmerica must rely on stats from the Bureau of Labor Statistics for state information, the most recent of which is from 2007.

Texas, Georgia, and Washington experienced the greatest growth in 2007, with 39 states reporting growth overall. Virginia led the nation with the highest concentration of tech workers for the fourth year in a row, followed by Massachusetts and Colorado.

David Thomas, executive director for TechAmerica's Silicon Valley sector, said that while member firms reported a decline in investment and a hold on new hires, he does not believe the current recession is as "pervasive and deep" as the 2001 tech decline.

"I think this recession is much broader in terms of hitting other sectors," Thomas said in a teleconference with reporters. "When the tech bubble burst in 2001, it was primarily focused on Internet start-ups and other tech companies. As a broader-based hit, [the current recession's] impact on tech is less."

Jeff Clark, the executive director for Texas at TechAmerica, said that he sees a shift toward the energy sector. Texas has traditionally been known for its PC manufacturers, but while those companies diversify and merge "we're seeing alternative energy and nanotechnology driving investment," Clark said.