Emurse

Wage and salary employment in the computer and electronic product manufacturing industry is expected to decline by 7 percent between 2004 and 2014, compared with a projected increase of 14 percent in all industries. Although the output of this industry is projected to increase more rapidly than that of any other industry, employment will still decline as a result of continued rapid productivity growth—the ability of the industry to produce more and better products with fewer employees. Employment also will be adversely affected by continued increases in imports of electronic and computer products and by a more recent trend: outsourcing of some professional functions, such as computer programming and engineering, to lower wage countries. While much of the design of computer and electronic products are done domestically, most of the mass manufacturing of these products occur abroad. Despite the overall projected decrease in employment, 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, should continue to provide many employment opportunities in the industry, especially in research and development. The products of this industry—especially powerful computer chips—will continue to enhance productivity in all areas of the economy.

The projected change in employment over the 2004–14 period varies by industry segment (table 3). Although demand for computers should remain relatively strong worldwide, employment is expected to decline 17 percent in computers and peripheral equipment and 12 percent in semiconductor and other electronic component manufacturing, due to both the introduction of new technology and automated manufacturing processes and a slowdown in the growth of output in these segments from previously high levels. Further, these segments will continue to face strong import competition. Employment in navigational, measuring, electromedical, and control instruments manufacturing is expected to increase 4 percent, due to recent heavy investments in defense electronics. In addition, employment in audio and video equipment manufacturing is expected to decrease by 22 percent, due largely to continued import competition as well as improvements in productivity. Employment in communications equipment manufacturing is also expected to decrease by 10 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 less than 1 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 most other occupations in the computer and electronic product manufacturing industry. However, the use of the Internet and other new forms of communication makes it possible for engineers and similar professionals working in other countries work that previously was done in this country. Some of these workers are directly employed by U.S. companies, while and others work for contractors hired by foreign companies. Because the earnings of professional workers in many countries are much less than earnings in the United States, the trend toward hiring foreign workers will accelerate, especially as companies gain more experience and confidence in the use of these workers. While this trend undoubtedly will have a detrimental impact on U.S. professional worker employment, there still will be numerous jobs in this country that cannot be exported.

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, imports, 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. Such uncertainties can be expected to continue. In addition, the intensity of foreign competition and the future role of imports remain difficult to project. Import 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.

Because defense expenditures are expected to increase, sales of military electronics, an important segment of the industry, will likely pick up. Furthermore, firms will continue to develop new products, creating large new markets, as they have in the past. 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. 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, will continue to create new opportunities.