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State high-tech employment data paint mixed picture

By Roger Fillion, Rocky Mountain News (Contact)

Published April 2, 2008 at 12:05 a.m.

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Colorado's high-tech sector lost jobs for a fifth straight year in 2006, one of just three states to post such a string of losses, a new report shows .

The U.S. tech economy, by contrast, has added jobs for three years running, the American Electronics Association said.

The AeA study also showed Colorado remained the state with the third-highest concentration of tech workers in 2006, having slipped from No. 1 the previous year. And tech workers here pulled down the fifth-highest wages in the nation in 2006, the most current state data available.

The report paints Colorado's tech economy as still struggling six years after the 2000 dot-com bubble burst, ravaging the state's Internet and telecom work force.

"There's still a shakeout that's happening," said AeA Vice President Matthew Kazmierczak.

But separate data and local industry executives portray a less grim picture in more recent months.

"The software and Internet markets in Colorado have been growing at a steady clip," said venture capitalist Brad Feld, managing director of the Foundry Group. "We are starting to see some significant companies come out of the investments done in the 2001 to 2004 time frame, including Rally Software and NewsGator."

Said John Raeder, CEO of Denver software company IQNavigator, which has been adding jobs: "We expect to grow over 60 percent in revenues in 2008 over 2007. And that's profitable growth."

The AeA report shows Colorado lost 47,200 tech jobs from 2001 - the peak of tech employment - through 2006. That 23 percent drop represents the steepest percentage decline of any state during the period.

It reflects losses in telecommunications services as well as layoffs in the data-storage industry and computer-related manufacturing. Engineering services and computer programming, by contrast, created jobs.

Among other events in the state, Sun Microsystems laid off hundreds of workers in 2006 after it bought Storage Technology Corp., and Seagate Technology axed 650 workers at Maxtor Corp. after it acquired the data-storage company.

In 2006, Colorado's tech work force declined about 1 percent from the prior year, or by some 900 jobs, leaving the state with 157,200 tech industry workers in 2006.

"In telecom services alone, you lost 2,000 jobs, said Kazmierczak. "That's what's dragging you down to the negatives."

The state ranks No. 14 in tech employment.

Among telecom carriers in Colorado, Qwest Communications cut scores of workers in 2006 and Level 3 Communications cut workers after buying ICG Communications.

Michigan, Delaware and Puerto Rico were the only other places to lose jobs in 2006. Michigan and Delaware also have lost jobs five straight years.

Nationally, the high-tech industry continued growing, adding 91,400 net jobs for a total of 5.9 million in 2007, the most current national data. That was on top of job gains of 139,000 in 2006 and 87,400 in 2005.

In Colorado, there were 83.15 high-tech workers for every 1,000 private-sector workers in 2006. Virginia again had the highest concentration of tech workers, with 90.95 for every 1,000 private-sector workers.

Separate data from Colorado's Department of Labor paint a less gloomy tech picture.

The state numbers show industries that contain high-tech jobs - vs. the tech industry itself - have helped to push up the number of tech jobs here.

In 2007, the state counted 176,900 such workers, up more than 3,000 from 2006. The ranks of such workers swelled by nearly 1,000 in 2006, contrary to the AeA report. The state uses a different methodology.

fillionr@RockyMountainNews.com or 303-954-2467

Comments

  • April 2, 2008

    6:24 a.m.

    Suggest removal

    windbourne writes:

    The problem here is that companies are outsourcing. Many of the telecom jobs are going to India (though comcast moved the TCI/ATT jobs to philly). But QWest is moving many of their highpaying jobs to India and now on to hong kong and china.
    I would suggest that if Qwest does not want to hire locals to do the work, then they should start building lines in China and India. Oh, they can not do that? That is too bad.
    Another suggestion is that the State Gov. start moving away from using QWest for their telecommunications. There are other companies that provide telco and they can do it cheaper. But I wonder how QWest will do when they realize that they could take a 5-10% hit on revenues.