This series presents updated and expanded statistics for technology sector employment.
Chart 1 shows technology sector employment for the Combined Statistical Areas (CSAs) that have technology sector employment greater than 80,000 jobs. Only private sector employment numbers are used. Demographic data for the 12 CSAs is shown below. Chart 1 covers the period from January 1990 to September 2009, which is the latest data available from Quarterly Census of Employment and Wages of the Bureau of Labor Statistics (BLS); the data set provides monthly employment data.
Click chart to see full size.
Twelve CSAs have technology sector employment greater than 80,000; in the remaining CSAs, technology sector employment drops off very rapidly. The chart legend is listed in rank order of each CSA’s September 2009 employment data. The 12 CSAs account for ~49% of technology sector employment in the U.S., while they represent only ~34% of the population. There are 126 CSAs, which represent ~2/3 of the U.S. population. Not all counties in the U.S. are included in a CSA; for example, San Diego is not part of a CSA.
Immediately apparent in the chart is the burst in technology sector employment during the dot com bubble from 1996 to 2003; this burst distorts employment and industry trends. Nonetheless, there are noticeable trends. Also apparent is the sudden drop in employment due to the current recession.
Notably, the Washington D.C. CSA, orange line, and Seattle CSA, blue line, show sustained job growth. The Washington D.C. CSA went from 5th rank in 1990 to 3rd rank in 2009, overtaking the Boston CSA, turquoise line, and Los Angeles CSA, violet line. The Seattle CSA went from 12th to 7th, and more than doubled the number of technology sector employees.
The New York CSA, fushia line, and Los Angeles CSA, violet line, have much larger populations than the other CSAs. Nonetheless, they do have substantial technology sector employment. A discussion of the relative density of technology sector employment, i.e., location quotient, is below.
In this and later charts and tables, technology sector jobs include those in the following NAICS codes. Note that NAICS 5112 is an addition to the list of codes used in earlier posts. This list is still purposely a more focused definition of technology sector than is often used, but it does broadly represent electronics, computer, communications, and Internet business activities.
NAICS 334 Computer and electronic product manufacturing
NAICS 517 Telecommunications
NAICS 518 Data processing, hosting and related services
NAICS 519 Other information services
NAICS 5112 Software publishers
NAICS 5415 Computer systems design and related services
Table 1 shows the compound annual growth rate (CAGR) for each CSA, for all 12 CSAs in aggregate, and for the U.S. CAGR is shown for 5 time periods. The first time period represents the entire data set from January 1990 to September 2009. The second time period is from January 1990 to July 2008; July 2008 is the local maxima of U.S. technology sector employment just before the current recession caused job losses. The third time period is from February 2004 to July 2008; February 2004 was the local minima of U.S. technology sector employment after the dot com bubble; thus, this period shows the growth from post-bubble minima to pre-recession maxima. The forth time period is from February 2004 to September 2009, which is the post-bubble minima to the end of the data set. The fifth time period is from July 2008 to September 2009, and represents the job losses during the current recession. Because the dot com bubble distorts a typical least squares curve fitting, CAGR is calculated using the begin and end points for each time period.
|Across Top 12 CSAs||0.19%||0.60%||1.45%||-0.16%||-6.04%|
|CS488 San Francisco CSA||0.13%||0.67%||1.59%||-0.51%||-8.05%|
|CS408 New York CSA||-0.78%||-0.37%||1.26%||-0.53%||-7.02%|
|CS548 Washington DC CSA||2.40%||2.71%||2.51%||1.46%||-2.40%|
|CS348 Los Angeles CSA||-1.81%||-1.46%||-0.12%||-1.63%||-7.15%|
|CS148 Boston CSA||-1.00%||-0.68%||1.50%||-0.10%||-5.93%|
|CS206 Dallas CSA||0.68%||1.18%||0.71%||-0.93%||-6.91%|
|CS500 Seattle CSA||4.81%||5.37%||5.88%||3.81%||-3.64%|
|CS176 Chicago CSA||-0.54%||-0.06%||0.97%||-0.93%||-7.79%|
|CS122 Atlanta CSA||2.90%||3.39%||0.24%||-0.79%||-4.60%|
|CS428 Philadelphia CSA||-0.22%||0.17%||1.91%||0.16%||-6.19%|
|CS378 Minneapolis CSA||0.68%||1.13%||1.13%||-0.44%||-6.15%|
|CS216 Denver CSA||2.30%||2.70%||0.62%||-0.30%||-3.74%|
Again apparent is the notable and sustained growth of jobs in the Washington DC area and in the Seattle area; later we’ll see that the D.C. area jobs are mostly concentrated in Northern Virginia. Note that the data presented here counts only private sector jobs. Many of the DC area jobs are likely in support of government activities, but they are private sector nonetheless.
The Atlanta and Denver areas significantly created jobs from 1990 to 2004, but their job creation was relatively flat in the late 2000s.
In contrast, the New York, Boston, and Chicago areas lost jobs from 1990 and 2004, but created jobs from 2004 to 2008. Of course, all areas lost jobs in the current recession, but the DC area lost jobs at a much lower rate than other areas.
Table 2 shows the net number of jobs created or destroyed for the same time periods.
|Across Top 12 CSAs||72,564||222,295||131,877||-17,854||-149,731|
|CS488 San Francisco CSA||7,828||39,302||22,686||-8,788||-31,474|
|CS408 New York CSA||-45,894||-21,479||16,096||-8,319||-24,415|
|CS548 Washington DC CSA||96,007||103,422||27,449||20,034||-7,415|
|CS348 Los Angeles CSA||-94,450||-74,664||-1,273||-21,059||-19,786|
|CS148 Boston CSA||-44,584||-29,556||13,944||-1,084||-15,028|
|CS206 Dallas CSA||18,360||31,128||4,883||-7,885||-12,768|
|CS500 Seattle CSA||71,520||76,759||27,601||22,362||-5,239|
|CS176 Chicago CSA||-12,921||-1,502||5,273||-6,146||-11,419|
|CS122 Atlanta CSA||41,668||47,143||1,069||-4,406||-5,475|
|CS428 Philadelphia CSA||-3,843||3,030||7,667||794||-6,873|
|CS378 Minneapolis CSA||10,085||16,298||4,220||-1,993||-6,213|
|CS216 Denver CSA||28,788||32,414||2,262||-1,364||-3,626|
The number of jobs created in the DC area is striking. Looking at column 2, 1990-2008, pre-recession, the DC area added more than 100K jobs. The Seattle area is not far behind, creating almost twice the number of jobs as the San Francisco area; but the population of the Seattle area is almost half of the San Francisco area.
The next three tables list selected U.S. Census Bureau statistics for the 12 CSAs. The dates indicate when the particular statistic was collected. For easier comparison, the last two rows of each table list the technology sector employment and the location quotient on the July 2008 pre-recession maxima.
|Census QuickFacts||San Francisco
|Population est July 1 2008||7,354,555||22,154,752||8,295,397||17,786,419|
|Population %∆ 4/2000-7/2008||3.7%||3.7%||9.5%||8.6%|
|Edu BA+, 25+, %, 2000||36.9%||30.1%||37.1%||24.0%|
|Median val owner house 2000||359,544||284,737||166,255||206,704|
|Median household inc 2007||73,997||64,222||75,774||58,449|
|Private nonfarm estblmt 2007||201,297||627,972||218,040||433,999|
|Private nonfarm empl 2007||3,261,270||8,941,754||3,682,424||6,734,743|
|Priv nonfarm empl %∆ 2000-7||-3.8%||1.8%||12.7%||7.5%|
|Land area, sq mi 2000||8,757||11,848||10,044||33,955|
|Population per sq mi 2000||809||1,802||754||482|
|Tech Empl, Jul 2008||337,517||299,956||265,068||238,600|
|Tech LQ, Jul 2008||2.91||0.95||2.02||1.00|
Abbreviations: edu- education; empl- employment; est- estimate; estblmt- establishments; LQ- location quotient; owner house- owner occupied house; sq mi- square mile; val- value
|Population est July 1 2008||7,514,759||6,655,261||4,087,033||9,793,036|
|Population %∆ 4/2000-7/2008||3.0%||21.3%||10.2%||5.2%|
|Edu BA+, 25+, %, 2000||32.3%||28.4%||31.0%||28.6%|
|Median val owner house 2000||184,136||99,219||199,401||157,474|
|Median household inc 2007||64,059||54,043||62,768||58,325|
|Private nonfarm estblmt 2007||206,396||148,328||119,872||250,024|
|Private nonfarm empl 2007||3,537,273||2,714,126||1,741,690||4,211,172|
|Priv nonfarm empl %∆ 2000-7||0.7%||6.2%||9.1%||-1.9%|
|Land area, sq mi 2000||8,833||14,124||9,922||8,487|
|Population per sq mi 2000||826||388||374||1,097|
|Tech Empl, Jul 2008||218,492||159,222||123,809||126,420|
|Tech LQ, Jul 2008||1.74||1.56||1.93||0.84|
|Philadelphia CSA||Minneapolis CSA||Denver
|Population est July 1 2008||5,729,304||6,398,896||3,562,284||3,049,562|
|Population %∆ 4/2000-7/2008||26.0%||3.1%||8.9%||16.0%|
|Edu BA+, 25+, %, 2000||29.9%||26.9%||31.5%||34.5%|
|Median val owner house 2000||136,999||117,817||137,873||178,257|
|Median household inc 2007||56,922||58,435||62,822||58,492|
|Private nonfarm estblmt 2007||145,317||161,596||103,283||92,661|
|Private nonfarm empl 2007||2,331,109||2,762,188||1,847,670||1,316,365|
|Priv nonfarm empl %∆ 2000-7||7.0%||2.4%||5.4%||7.4%|
|Land area, sq mi 2000||10,418||5,978||9,564||13,092|
|Population per sq mi 2000||437||1,039||342||201|
|Tech Empl, Jul 2008||102,369||95,661||87,021||83,363|
|Tech LQ, Jul 2008||1.28||0.97||1.35||1.68|
In addition to the Boston and San Francisco areas being roughly comparable in many demographics as noted earlier, the Washington DC area is also similarly comparable to the two as well. The Washington DC area has a ~12% larger population, which is largely due to the higher population growth in the past decade. The Washington DC area has a comparable percentage of the population with college and graduate degrees as the San Francisco area, and slightly higher than the Boston area.
The New York and Los Angeles areas have substantially larger populations than the other areas.
Future posts will discuss more detail of the various areas.
Location quotient as used here is the ratio of the concentration of technology sector employment in a CSA compared to the concentration of technology sector employment across the U.S. as a whole:
lq = ( csa.tech_empl / csa.all_empl ) / ( US.tech_empl / US.all_empl )
Thus, if a CSA has a location quotient that is greater than 1.0, then the CSA’s ratio of technology sector employment to its employment in all sectors is greater than the ratio of technology sector employment to employment in all sectors for the U.S. as a whole. Note again that only private sector employment data is used here.
Chart 2 shows the monthly location quotient for the 12 CSAs from January 1990 to September 2009. A CSA line color in Chart 2 is the same is in Chart 1. Chart 2’s legend is sorted by the location quotient value on September 2009; this order differs from Chart 1’s legend order.
Click chart to see full size.
The location quotient curves do not show a significant effect from the dot com bubble, except for perhaps the Denver CSA, rose line. This indicates that the dot com bubble was not localized to particular areas but was more pervasive across all areas.
The San Francisco CSA, dark blue line, stands out as having the highest location quotient, as would be expected from Chart 1. Its location quotient trends up slightly.
The Boston CSA, turquoise line, started as the second highest location quotient, but trended down to fourth place. The Los Angeles CSA, violet line, also trends down, from seventh to nineth place.
Notably, the Seattle CSA, blue line, and the Washington DC CSA, orange line, trend up significantly. Seattle doubles its location quotient, moving from 0.95 to 1.93, and from tenth to third place. Washington DC’s location quotient moves from 1.46 to 2.08, from fifth to second place.
Table 4 shows the percentage change in location quotient for the time periods used above. A change of greater than 100% indicates that the area is increasing its concentration of technology sector employment relative to the US as a whole; a change of less than 100% indicates that the area is decreasing its concentration of technology sector employment relative to the US as a whole, and is shown in red.
|% Change in LQ||1990.01||1990.01||2004.02||2004.02||2008.07|
|CS488 San Francisco CSA||108%||109%||101%||100%||99%|
|CS408 New York CSA||93%||95%||100%||98%||97%|
|CS548 Washington DC CSA||142%||138%||105%||108%||103%|
|CS348 Los Angeles CSA||77%||76%||97%||97%||101%|
|CS148 Boston CSA||85%||86%||101%||101%||99%|
|CS206 Dallas CSA||90%||91%||92%||91%||99%|
|CS500 Seattle CSA||209%||202%||113%||117%||104%|
|CS176 Chicago CSA||94%||95%||100%||99%||99%|
|CS122 Atlanta CSA||139%||134%||97%||100%||103%|
|CS428 Philadelphia CSA||100%||101%||104%||103%||99%|
|CS378 Minneapolis CSA||102%||102%||99%||99%||100%|
|CS216 Denver CSA||119%||115%||93%||97%||104%|
Looking at column 2, 1990-2008, pre-recession, Seatle CSA and Washington DC CSA show significant increases of 202% and 138%. The San Francisco CSA shows an increase of 109%. The Boston CSA shows a disappointing decrease of 86%, however, the decrease is due to job losses mostly in the 1990s; from 2004-2008, Boston maintaied its location quotient, with a change of 101%.
The New York, Los Angeles, Dallas, and Chicago CSAs show significant decreases in their location quotients.
Interestingly, though all areas lost jobs due to the current recession, Washington DC, Seattle, and a few other areas, lost jobs at a slower rate, and actually increased their location quotient during the recession, as shown in the fifth column. As the recession ends, it will be interesting to see how all of these areas recover.
U.S. Bureau of Labor Statistics
Quarterly Census of Employment and Wages
U.S. Census Bureau State & County QuickFacts
North American Industry Classification System (NAICS) at BLS