DECADES

ARIZONA
INDICATORS

WHAT THE TRENDS TELL US

Innovation

Trends in High Technology Employment
By Tom Rex
Associate Director, Center for Competitiveness and Prosperity Research
W. P. Carey School of Business
Arizona State University

Q: What were the most interesting and important trends in Arizona innovation that occurred in
the previous decade? What is the significance of these trends and what insights can we apply to
the new decade?

A: The long downward trend in high-technology industries in Arizona continued over the last

decade. Historically, Arizona was one of the nation’s high-tech centers, with employment in hightech industries as a share of total employment or on a per capita basis well above the national
averages. Now, however, Arizona’s high-tech concentration is barely greater than the national
average. For example, high-tech employment per capita in 2007 (the last year of complete data)
was only 5 percent higher than the U.S. average.
Arizona’s high-technology base always was narrow, concentrated in semiconductor and
other electronic manufacturing, and aerospace manufacturing. Per capita employment in the
manufacturing of navigational, measuring, and control instruments also was above average.
Arizona still has a solid concentration in these activities, though not as strong as in the past. No
progress has been made in broadening the high-tech base.
In an era where information, innovation, and technological advances drive economic growth,
Arizona is falling behind. A number of new technologies show promise for the future, but Arizona
has virtually no presence in developing these technologies. Per capita employment in research and
development, a key component of the high-technology base, is particularly low in Arizona at just
37 percent of the U.S. average.
High-Technology Employment as a Percentage of Total Private-Sector
Employment in Arizona, as Defined by Industry
Last Updated: 1/27/2011

8.5%
8.0%
7.5%
7.0%
6.5%
6.0%
5.5%

1998

1999

2000

2001

2002

2003

United States

2004

Arizona

Source: Calculated from U.S. Department of Commerce, Census Bureau

2005

2006

2007

2008

DECADES
VOLUME 1 / ISSUE 5
JANUARY 2010
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