Information Technology

Workers & Wages

This section discusses the current status and historical trends in labor market conditions related to establishments, employment and wages within the North Carolina and U.S. Information Technology (IT) industry. This analysis primarily uses data from the U.S. Bureau of Labor Statistics (BLS) based on our definition of the IT industry. Links are provided to the underlying data in the form of interactive tables, charts and maps throughout this section.

Overview

North Carolina enjoys a modestly strong position in the IT industries. Employment grew very quickly in these industries between 1992 and 2002, with a more modest upward trajectory between 2002 and 2012. These industries represent about 3.3% of total employment in North Carolina, which is slightly higher than their share of total U.S. employment (1.8%). Like in the rest of the United States, most of this employment is concentrated in the hardware/software services segment of the chain. Relative to the rest of the country, North Carolina’s position is strongest in the magnetic media manufacturing & reproduction and computer & peripheral manufacturing industries, though these have been losing employment and establishments since 2002. Both in North Carolina and nationally, the only industries which have seen employment growth since 2002 are software publishing and hardware/software services.

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North Carolina
Present (2012)

Overall

  • In North Carolina there were 7,428 establishments and 69,315 workers employed across the hardware, software and hardware/software services segments of the IT value chain (T2a; T3a). The number of establishments is driven very strongly by the hardware/software services segment, presumably because of a large number of SMEs and/or independent contractors in this segment.
  • The overall average annual wage is $96,487. The highest wages are in the magnetic media manufacturing and reproducing industry ($135,672) and the lowest are in semiconductors and circuits ($72,152) (T4a; C4a). Wages in both industries are significantly higher than the median household income for ($46,450) (U.S. Census Bureau, 2012).
  • The hardware segment grew rapidly between 1992 and 2002 in terms of both employment and number of establishments but has declined somewhat since 2002.
  • Geographically, the industry is concentrated in two main clusters. One cluster, which contains nearly all hardware manufacturing employment and close to 75% of employment in the state’s software industry, is located in the Research Triangle (primarily Wake and Durham Counties). A smaller cluster, focused on the software segment, is centered on Mecklenburg County (M2a; M3a). Employment in hardware/software services are distributed across the state roughly in accordance with population.

Main Segment

  • The main segment in North Carolina is the computer & peripheral equipment manufacturing industry (NAICS 3341), which employed 10,558 workers in 44 establishments in 2012 (T2a; T3a). Though there are more workers (38,868) and establishments (6,812) engaged in hardware/software services, this is more a reflection of population in NC than the state’s competitive positioning in the industry. Since computer & peripheral equipment manufacturing represents a relatively large share of overall IT employment in NC (15%, compared to 6% nationally), this industry represents the state’s most competitive segment of the IT industry.
  • Average annual wages in the segment were $133,664 (T4a; C4a).
  • The largest concentration of establishments (25%) and employees (83%) in the computer & peripheral equipment manufacturing industry is Durham County (M2a; M3a).

Historical Trends (1992-2012; 2002-2012)

Overall

  • Total IT employment in North Carolina is currently 69,315. Employment has increased steadily since 1992, with total employment growing 115% since 1992 (T3a; C3a). Most of this increase occurred between 1992 and 2002, when total IT employment grew from 32,253 to 64,285. Employment growth is driven by software and services segments of the value chain; while growth was strong in the manufacturing segment through 2002, these industries have seen a downward trajectory in employment between 2002 and 2012.
  • The number of establishments has grown even more quickly (581%) than employment over the 1992 - 2012 time frame (T2a; C2a). Most of this growth is attributable to the hardware/software services segment.
  • Wages have increased over the last two decades in all segments by an average of 153% (T4a).
  • Declines in employment have been concentrated in within the major IT clusters in Durham/Wake counties and Mecklenburg county. Guilford and Forsyth counties, located in the Triad region, saw a large number of layoffs in the hardware segment during 2008-2010.
  • The largest number of layoffs and closings occurred between 2001 and 2002 (C8a). There was another, smaller uptick in layoffs and closings between 2008 and 2010.

Main Segment

  • Employment in computer and peripherals manufacturing has contracted during the last decade from 15,097 in 2002 to 10,558 in 2012. The number of establishments has declined from 58 to 44.

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United States
Present (2012)
  • Roughly 2/3 of overall employment and more than 90% of establishments are concentrated in the hardware/software services segment. The largest of the four manufacturing categories , in terms of employment, is the semiconductors & circuits sector, which employed 278,542 workers in 2012 (T3b).
  • Overall the computer & peripheral manufacturing segment has the highest average salaries ($152,884) and the lowest salaries are in the semiconductors & circuits segment at $75,197 (T4b).
Historical Trends (1992-2012; 2002-2012)
  • The number of establishments in the U.S. IT industries increased by 37.9% between 2002 and 2012 to 231,547 (T2b). Employment grew by a more modest 9.4% to 2.5 million during the same time frame (T3b). (C2b; C3b).(T3c).
  • Wages have steadily increased in all three sectors, with an overall pay increase of 47.9% between 2002 and 2012 (T4b).
  • Employment has declined since 1992 in all industries except for software publishing and hardware/software services.

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Top U.S. States
Present (2012)

Overall

  • The top U.S. states in the IT industries are California, Texas, Virginia, New York, Massachusetts, Washington and Florida (T3c).
  • Among U.S. states, California occupies the top position across all segments of the IT value chain except software publishing, where the top spot is held by Washington. California enjoys more than 20% of total national employment across the four manufacturing industries (computers & peripherals, communications equipment, semiconductors & circuits, and magnetic media). Texas has a very strong position in the hardware segment, where it is the second largest employer nationally (behind California) in computers & peripherals, communications equipment, and semiconductors & circuits. Virginia, where many cyber security and defense-related systems integration activities are located, is especially concentrated in hardware/software services segment of the IT value chain. Washington and Massachusetts are specialized in software publishing, while New York and Florida are concentrated in communications equipment manufacturing.

1 These are: computers & peripherals, communications equipment, semiconductors & circuits and magnetic media.

Main NC Segment

  • In the computer & peripherals manufacturing segment, the top employers are California (40% of national employment), Texas (11%), Massachusetts (8%), North Carolina (7%) and New York (6%) (T3c).

Historical Trends (1992-2012; 2002-2012)

  • Three states, California (33% of U.S. employment in 1992), Massachusetts (13%) and Texas (10%), have been the top three employing states in the computer & peripherals manufacturing segment since 1992 (T3c).
  • In the software/hardware services segment, California, Virginia, New York and Maryland have remained in the top five states since 1992. Michigan was one of the top five employers in 1992 (#3 with 6% of U.S. employment), but despite an increase in employment over the 20 year timeframe has fallen to 14th with only 3% of U.S. employment (M3c). Employment appears to have shifted to neighboring states, including Pennsylvania, which has remained at 4% of U.S. employment, but has nearly tripled in terms of absolute employment (T3c).
  • Of the main U.S. states, Florida, Tennessee, Virginia and Georgia have all had overall average annual wage increases greater than the U.S. average of 82% over the last two decades (T4c).

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NC in the U.S. Economy
Present (2012)
  • North Carolina ranks thirteenth in the U.S. in terms of the overall number of establishments with 3% of total U.S. establishments in the IT industries (T2c) and is also the thirteenth largest employer, representing 3% of U.S. employment (T3c).
  • Relative to the rest of the U.S., North Carolina enjoys the strongest positioning in the magnetic media manufacturing & reproduction (#2) and computer & peripheral manufacturing (#4) segments (T3c).
Historical Trends (1992-2012; 2002-2012)
  • Overall, the IT industries grew much faster in North Carolina than they did overall in the U.S. between 1992 and 2002 (nearly 100% in NC versus 37% nationally). Overall growth in the IT industries between 2002 and 2012 was very modest in the U.S. (1.3%), but somewhat stronger in North Carolina (7.9%) (T3c).

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