San Diego’s Economic Engine Boosted by High-Tech Jobs, Wages

10/13/11Follow @bvbigelow

San Diego’s high-tech sectors did not escape unscathed from the great recession of 2007-2009, but a new study says local technology industries have had a disproportionate effect in boosting the regional economy in recent years.

Using state employment data, the study released yesterday by the National University System Institute for Policy Research counted just over 6,000 high-tech employers in this region last year—or about 6 percent of all employers (with payrolls) in the San Diego region.

Yet these 6,000 companies directly employed 138,800 workers, or 11.2 percent of the total regional workforce in 2010. Using standard economic modeling, the institute estimated that San Diego’s technology industries indirectly created an additional 103,800 jobs last year, and induced another 120,400. The total—363,000 technology-dependant jobs—represents more than 29 percent, or close to a third of all jobs in the San Diego area.

Wages paid by technology companies have had an even-more disproportionate effect on the regional economy in recent years, according to the institute’s analysis. It shows the average annual wage of workers directly employed by technology companies in San Diego at $93,800 in 2010, more than double the $45,000 average annual wage paid by non-technology companies.

Accordingly, overall labor income generated directly by technology jobs reached $15.7 billion in 2010. The study found another $12.3 billion was generated by indirect and induced labor income, totaling $28 billion—or 45 percent of all labor income generated in the San Diego region last year.

San Diego’s technology sectors shed some jobs during the Great Recession of 2007-2009, contributing to a county unemployment rate that still stands at slightly more than 10 percent, according to August unemployment data. (The statewide unemployment rate in California was nearly 12 percent in August.) But technology employment held up much better than the overall  job market, according to the study. Employment in most tech sectors had returned to 2007 levels by 2010—except in computer and electronics manufacturing, which declined 8 percent, from 13,700 to 12,600 jobs throughout San Diego County.

In contrast to all other technology sectors, the number of biotechnology and pharmaceutical jobs actually increased by almost 21 percent in San Diego County during the recession—from 17,300 jobs in 2007 to 20,900 jobs in 2010.

The institute analyzed economic trends in nine high-tech sectors, based on a standard federal job classification system. The nine sectors are biomedical products, biotechnology and pharmaceutical, communications equipment, computer and electronics, defense and transportation, environmental technology, recreational goods, software, and technology consulting services.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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