Over the year ending with the third quarter of 2010, level-one high-tech employment contracted 1.5% (-4,158 jobs) in Virginia while overall employment dropped 3.9% (-143,186 jobs). Level-one losses were led by architectural, engineering, and related services (-3,231 jobs); semiconductor and other electronic component manufacturing (-2,432); and data processing, hosting, and related services (-1,192). In contrast, 3,727 jobs were added in computer systems design and related services. Level-two job growth included a gain of 2,499 jobs in management, scientific, and technical consulting services while level-three employment losses included the contraction of 2,117 jobs in wired telecommunications carriers and the loss of 2,570 jobs in management of companies and enterprises.
High-Technology Growth in Virginia
Wages and Salaries
Thousands of Dollars*
Total High Technology
Pharmaceutical and Medicine Manufacturing
Computer and Peripheral Equipment Manufacturing
Communications Equipment Manufacturing
Semiconductor and Other Electronic Component Manufacturing
Navigational, Measuring, Electromedical, and Control Instruments Manufacturing
Aerospace Product and Parts Manufacturing
Data Processing, Hosting, and Related Services
Other Information Services
Architectural, Engineering, and Related Services
Computer Systems Design and Related Services
Scientific Research and Development Services
* Includes some stock options that were exercised.
Note: Data in this table include both privately-owned and government-owned high-tech operations. Figures may not sum to totals due to rounding. Industries for which data are not disclosed are excluded from the table but not from the total high-tech figures.
The Northern Virginia metro area (which consists of the Virginia portion of the tri-state Washington metro) accounts for about 57% of high-tech jobs in Virginia. Over the year ending with the third quarter of 2009, level-one high-tech employment contracted 0.8% (-1,430 jobs) in Northern Virginia while overall employment fell 2.6%. Several level-one expansions were recently announced for the metro area by Clarabridge (+50 jobs), IntelliDyne (+192), and OakTree Enterprise Solutions (+94). Other high-tech expansions announced included those by Capital One Financial (+400) and NeuStar (+280).
Information on the high-tech industry in each of Virginia’s metro areas can be found in the recently released 2nd quarter 2010 edition of the Virginia Economic Trends
The 1st quarter 2010 edition of the Virginia Economic Trends includes a feature story on the efforts in Southwest and Southern Virginia to raise education levels. The benefits of an education are clear: on average, workers with advanced degrees earn higher wages and are less likely to be unemployed than those with less education. In 2008, for example, 9.0% of workers with less than a high school diploma were unemployed compared to less than 3.0% among those with a bachelor’s degree or higher. Furthermore, those with less than a high school diploma averaged $426 in weekly earnings in 2008, less than half the average $978 earned by bachelor’s degree holders and less than a third of the average earnings of workers with a professional degree or a doctoral degree.
Of course, not all degrees are equivalent in the amount of job security and earning potential bestowed upon graduates. If students learn skills in demand, they have a greater chance of success in the labor force. To this end, educational institutions must work with local businesses to understand labor needs. The Southwest Virginia Higher Education Center (SVHEC) in Abingdon is a good model for this. The higher education center is in “constant conversation” with local industry; the employers say that they need “X” occupation and SVHEC responds.
One product of this process is the nurse anesthetist master’s degree program offered at SVHEC through Virginia Commonwealth University (VCU). Hospitals in Southwest Virginia told SVHEC that their number one worker shortage was for certified registered nurse anesthetists, or CRNAs. With the help of start-up funds from the Virginia Tobacco Indemnification and Community Revitalization Commission, the education center partnered with VCU to begin the program in 2004. To date, 28 students have graduated from the program with 19 more expected to graduate by December, 2011. All of the graduates are working in rural hospitals in the region with average salaries over $125,000.
The Herfindahl-Hirschman Index (HHI) is used to measure competition in a banking market. Ranging between 0 and 10,000, the HHI is the sum of the squares of the market share (based on deposits) of each firm competing in a market. Lower HHIs correspond with more competition. According to the U.S. Department of Justice and the Federal Trade Commission, markets in which the HHI is greater than 1,800 are considered to be concentrated. Bank mergers or acquisitions that increase the HHI by more than 100 points in concentrated markets can be challenged by authorities as they are likely to have adverse effects on competition. Among Ohio’s six largest metros as of June 2009, the HHI varied from 1,813 in Cincinnati to 1,133 in Akron.
The dominant banks in the Cincinnati metro area (including the Kentucky and Indiana portions) are Fifth Third with a 31.0% market share and US Bank with a 27.4% share. Both of these banks saw a decline in deposits from June 2008 to 2009, causing a 3.2% drop in overall deposits at FDIC-insured institutions in the metro area. Such a decline is not unusual in the region which has shown to have high volatility in deposits. Changes in deposits can happen for a variety of reasons, including wealth growth in a region, shifts in spending and savings patterns, shifts in investment strategies, and local banking practices such as checking account incentives. Nevertheless, deposits have grown in Cincinnati at a 6.5% average annualized pace from 1999 to 2009, the fastest rate among the six largest metros in Ohio. Further details are found in the Fall 2009 edition of the
Ohio Economic Trends
The just released 2nd quarter 2009 edition of the Ohio Economic Trends features an overview of the government sector in Ohio and its six largest metropolitan areas. Over the past ten years, from 1998 to 2008, overall employment in Ohio contracted while government employment expanded. The government job growth was largely due to an expansion in local government employment while state job growth was slight and federal employment contracted. The past two years, however, have been a different story. While overall employment fell 0.6%, government employment also fell, albeit at a slower 0.2% pace.
In Ohio’s economy overall, employment plummeted 4.9% in Ohio over the year ending April 2009 with over 100,000 jobs lost in manufacturing. Also in April, a new low was posted in single-family building permits and a new high in initial unemployment claims. Employment in high-tech industry, however, continued to expand through the end of 2008. From the fourth quarter of 2007 to the fourth quarter of 2008, total wages in the state were flat, but wages in the high-tech industry grew 2.7%.
The second quarter 2009 edition of the Virginia Economic Trends features the expansion plans of the Robert Russa Moton Museum in Farmville, the site of a 1951 student walkout which was part of a string of events leading to the landmark Brown v. Board of Education Supreme Court decision. The museum is an anchor site of the Civil Rights in Education Heritage Trail in Southside Virginia. The expansion project and the expected increase in visitors to the museum will bring economic benefits to this area of the state in addition to the educational and cultural benefits.
The Southside region of Virginia has seen increased unemployment due to the recession and the Danville metropolitan area is a good example of this. The unemployment rate in Danville has been in double digits since October 2008. As of March 2009, the unemployment rate was 12.1%, below the peak of 12.9% reached in January. The national unemployment rate in March 2009 was 8.5%, its peak in the current recession to that point. Among Virginia’s metro areas, Danville had the highest unemployment rate in March followed by Blacksburg (9.1%) and Bristol (8.8%).
The current recession is hitting Ohio more sharply than the 2001 recession. Employment
in the state dropped at a 4.1% year-over-year pace in January 2009, eclipsing the
2.5% peak rate of decline in the previous recession. The unemployment rate reached
8.8% in Ohio in January, far above the 6.5% peak unemployment rate which followed
the 2001 recession.
The high-tech industry, however, has been a relative bright spot for Ohio. Over
the year ending with the third quarter of 2008—the latest data available at
this level of detail—level one high-tech employment in the state expanded
3.7% (+6,780 jobs) compared to a 1.2% drop (-64,968 jobs) in overall employment.
Level one job gains included computer systems design and related services (+3,532
jobs), software publishers (+1,365), scientific research and development services
(+1,063), and aerospace product and parts manufacturing (+818). Further details
on high-tech industry in the state and its six largest metro areas can be found
in the just released first quarter 2009 edition of the Ohio Economic Trends
State and regional data in the first quarter 2009 edition of the Virginia Economic Trends show the depth and breadth of the recession which has taken a firm hold on Virginia’s economy. The state lost over 30,000 jobs in 2008 and the unemployment rate jumped from 3.2% to 5.4% over the year. The increase in initial unemployment claims was accelerating at the end of the year, indicating further weakening in the labor market. Among the metro areas, Danville had the highest unemployment rate (13.1% in December) while Winchester recorded the largest job loss (-2.0% over the 2008 calendar year) as well as the largest drop in retail sales (-9.7% over the same period).
The Winchester metropolitan area boomed from 1996 to 2006, averaging 2.9% annual employment growth over those years compared to 1.7% in Virginia. This fast growth has been turned on its head in the current recession, however, with Winchester showing signs of being hit worse than the state. Building permits have fallen farther in Winchester (-81.7% from peak to trough) than in any of the other state metros. Retail sales have also plummeted in Winchester, dropping 19.2% from May 2006 to December 2008. Over the year ending December 2008, Winchester employment dropped 2.0%, equivalent to a loss of 1,149 jobs. (The Chmura benchmark series estimates that regional employment fell 2.4%.) State employment declined 0.8% over the same period.
Though the current recession is different in character than the previous recession, a comparison of key indicators offers some context for expectations. The fourth quarter 2008 edition of the Ohio Economic Trends includes comparisons of Ohio's performance in the past recession as well as performance to date in the current recession.
The current national recession is expected to be worse than the recessions in 2001 and 1990-91. If Ohio performs worse in the current recession compared to the last recession, the state has a good deal of hardship lying in wait. The state’s peak-to-trough job loss in the current recession is 1.0% (-55,500 jobs) so far compared to 4.4% (-247,300 jobs) in the 2001 recession. At 7.4% in August 2008, the recent unemployment rate in Ohio has exceeded the peak during the last recession. Despite the declining overall employment as of the second quarter of 2008, the high-tech industry was still adding jobs in Ohio.
To date, Ohio’s single-family building permits have dropped much more in the current recession (-63.2% peak to trough) than in the last one (-11.3%). In other measures, however, the last recession was worse compared to the current recession to date. Retail sales fell 3.4% from peak to trough in the 2001 recession compared to 1.9% in the current recession. Initial unemployment claims rose 78.7% from peak to trough in the last recession compared to 45.5% in the current one.
Though the current recession is different in character than the previous two recessions, a comparison of key indicators in each recession can offer some context for expectations. The fourth quarter 2008 edition of the Virginia Economic Trends includes comparisons of Virginia's and each state metropolitan area's performance in the past two recessions as well as performance to date in the current recession.
In the previous two recessions, Virginia shed 3.2% and 2.2% of employment from peak to trough. In this recession, the state has so far expanded employment—though a slight dip in jobs was experienced March through May, September 2008 represents the current peak. Building permits and auto registrations each fared worse in connection to this recession compared to the previous one. Initial unemployment claims rose 27.0% in this recession to date compared to 95.2% in the last recession.
Job growth in level one high-tech industry was strong in the state over the year ending with the first quarter of 2008 as the metropolitan areas of Dayton, Akron, and Cleveland performed notably well. Over the year ending with the first quarter of 2008, level one high-tech employment expanded 2.9% in the state compared to a 0.7% drop in overall employment. Level one job gains included computer systems design and related services (+2,655 jobs), software publishers (+1,032), scientific research and development services (+790), and aerospace product and parts manufacturing (+576). Wages and salaries, which include bonuses and stock options, increased 8.5% in level one high-tech industries compared to a 0.1% drop in overall industry.
Though the Dayton metropolitan area has been challenged by job losses in the auto industry, level one high-tech employment expanded 6.6% in the region over the year ending with the first quarter of 2008, the best growth among the six largest metros in the state. High-tech job growth in Dayton included 343 added jobs in computer systems design and related services and 60 additional jobs in aerospace product and parts manufacturing. Over the same period, level one high-tech industry employment grew 5.6% in the Akron metro area and 5.1% in the Cleveland metro area. Job growth in level one industries in Akron was led by a 261-job gain in computer systems design and related services. Growth in Cleveland included computer systems design and related services (+1,107 jobs); architectural, engineering, and related services (+334); and semiconductor and other electronic component manufacturing (+152).
The Congressional Office of Technology Assessment describes high-technology firms as those that are engaged in the design, development, and introduction of new products and innovative manufacturing processes, or both, through the systematic application of scientific and technical knowledge. No set of NAICS codes can perfectly capture high-tech employment. The Ohio Economic Trends—the publication from which the above data were taken—uses a high-tech industry definition suggested by Daniel Hecker in "High Technology Employment: a NAICS-based update" (Monthly Labor Review, July 2005), but modified to reflect the 2007 revision of NAICS codes. Level one high-tech industries are those employing 5 or more times the average of high-tech occupations. Level two employs 3.0 to 4.9 times the average of these occupations and level three are the remaining that employ at least 2 times the average.
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