All Things Political

Computer and Electronics Industry Job Outlook

supplemental resource: Job Outlook by Profession

Employment in the computer and electronic product manufacturing industry is expected to decline rapidly over the next decade, but there should still be favorable employment opportunities in certain segments of the industry—especially in highly skilled positions.

Wage and salary employment in the computer and electronic product manufacturing industry is expected to decline by 19 percent between 2008 and 2018, compared with a projected increase of 11 percent in all industries. Although the output of this industry is projected to increase quickly, employment will decline as a result of rapid productivity growth. Employment also will be adversely affected by continued increases in imports of electronic and computer products, including intermediate products such as microchips. Although a great deal of the design work in this industry takes place in the United States, much of the manufacturing process has been moved overseas.

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The projected change in employment over the 2008-18 period varies by industry segment. Although demand for computers should remain relatively strong worldwide, employment is expected to decline 32 percent in computers and peripheral equipment and 34 percent in semiconductor and other electronic component manufacturing. Declines in both will be due to the introduction of new technology and automated manufacturing processes, as well as a slowdown in the growth of output in these segments from previously high levels. Further, these segments will continue to face strong foreign competition.

Employment in navigational, measuring, electromedical, and control instruments manufacturing is expected to decline by 2 percent. The smaller declines in this segment are due mainly to heavy spending on military and healthcare electronics. Sales of consumer navigational devices also will help mitigate job losses in this segment. Employment in audio and video equipment manufacturing is expected to decrease by 46 percent, reflecting continued import competition as well as improvements in productivity. Employment in communications equipment manufacturing is expected to decline by 7 percent due to automation and consolidation among firms in the industry. Employment in the manufacturing and reproduction of magnetic and optical media is expected to decrease by 26 percent because of higher productivity and more efficient production processes.

There should be a smaller decrease in employment among professional and related occupations than among production occupations in the computer and electronic product manufacturing industry. Despite large numbers of engineering graduates in many foreign countries, many American manufacturers prefer U.S.-based engineering teams because they are believed to have a better knowledge of the domestic market. However, the use of the Internet and other new forms of communication makes it possible for engineers to collaborate over great distances, and foreign markets for these goods are growing. Many U.S.-based companies that formerly performed their R&D work domestically are now opening development centers overseas to take advantage of the close proximity to foreign markets.

The computer and electronic product manufacturing industry is characterized by rapid technological advances and has grown faster than most other industries over the past several decades, although rising costs, reduced domestic market share, and the rapid pace of innovation continue to pose challenges. Certain segments of the industry and individual companies often experience problems. For example, the industry occasionally undergoes severe downturns, and individual companies—even those in segments of the industry doing well—can run into trouble because they have not kept up with the latest technological developments or because they have erred in deciding which products to manufacture. In addition, the intensity of foreign competition and the future role of imports remain difficult to project. The United States continues to have a comparative advantage in many industry segments—more products are exported than imported—but other technologically advanced countries are beginning to erode this advantage. Global competition has wiped out major parts of the domestic consumer electronics industry, and future effects of such competition depend on trade policies and market forces. The industry is likely to continue to encounter strong competition from imported electronic goods and components from countries throughout Asia and Europe.

Nonetheless, innovation will continue to drive employment growth within some industry segments. Smaller, more powerful computer chips are constantly being developed and incorporated into an even wider array of products, and the semiconductor content of all electronic products will continue to increase. New opportunities will continue to be created by the growth of digital technology, artificial intelligence, and nanotechnology, as well as the expansion of the Internet and the increasing demand for global information networking.

Despite the overall projected decrease in employment, many employment opportunities should continue to arise in the industry due to the technological revolutions taking place in computers, semiconductors, and telecommunications, as well as the need to replace the many workers who leave the industry due to retirement or other reasons. Opportunities should be best in research and development. The products of this industry—especially powerful computer chips—will continue to enhance productivity in all areas of the economy.

Computer software engineers are also in high demand in this industry because many complicated hardware products require software. This includes both drivers that help devices interface with computers, and software that runs directly on complex devices.

Despite the rapid decline of production jobs, prospects should still be fair for qualified workers. Much of the decline in this industry is concentrated among production workers, as manufacturing becomes more automated and labor-intensive jobs are offshored. Workers with formal training in high-tech manufacturing will have the best opportunities, as changes in the nature of the work have meant that workers need to have a higher skill level than before. Nevertheless, other manufacturing industries are becoming highly technical, which means they often compete with this industry for qualified workers. In many cases, skills learned in this industry are transferrable to other industries.

Source: Bureau of Labor Statistics, U.S. Department of Labor, Career Guide to Industries, 2010-11 Edition

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