RegionalReport

SUMMARY 11-03 November 2011 U.S. BUREAU OF LABOR STATISTICS

The Massachusetts economy 

and its high-tech industries 

entered the 21st century on a 

downward trend. From 2001–2009, 

total private employment declined by 

about 141,000 or 4.9 percent; and, 

collectively, high-tech industries shed 

47,000 jobs (14.8 percent of total 

high-tech employment). Still, hightech employment remains important 

to the Massachusetts economy as 

nearly 1 of every 5 dollars paid in 

wages in Massachusetts in both 2001 

and 2009 were attributed to the hightech sector. 

This report uses two data series 

from the Bureau of Labor Statistics 

(BLS): the Quarterly Census of 

Employment and Wages (QCEW) 

program to analyze high-tech 

industries and the Occupational 

Employment Statistics (OES) 

program to examine the importance 

of high-tech occupations and their 

contributions to the overall economy 

of Massachusetts. This report 

examines general employment and 

wage trends within the specific 

industries that compose the hightech sector, beginning in 2001. 

The period chosen, 2001–2009, 

captures two economic downturns 

(as defined by the National Bureau 

of Economic Research1) the first 

of which was exacerbated by the 

dot-com bubble2 of 2000 and which 

affected the high-tech industries 

affiliated with the Internet.3 The 

2009 QCEW employment data 

referenced are final, annual average 

data. OES employment and wage 

data are for May 2009. 

For this report, industries have been 

identified as “high tech,” using 

Regional Report November 2011 1

High-tech Industries in Massachusetts: 

Employment and Wage Trends during

the 2001–2009 Period

Authors: 

Cynthia Gillham,

Timothy Consedine,

Denis M. McSweeney

Authors:

Cynthia Gillham, 

Economist, New York Economic

Analysis and Information Office

Timothy Consedine, 

Supervisory Economist, Boston

Regional Office

Denis M. McSweeney,

Regional Commissioner, Boston/

New York Regional Office
of computer and electronics 

manufacturing during the early 

part of the decade.7 Employment 

in high-tech goods-producing 

industries declined 30.5 

percent from 2001 to 2009 in 

Massachusetts and by 23.4 percent 

nationwide.

Two high-tech industries (one 

goods-producing and one serviceproviding), however, were less 

affected. In the pharmaceutical 

and scientific research industries, 

employment grew by more than 

20 percent from 2001 to 2009. 

Despite this specific growth, 

across all 11 high-tech industry 

sectors, employment declined 

14.8 percent. At the same time, 

total private employment declined 

across Massachusetts, as well, 

down 4.9 percent. Over this same 

period nationally, employment 

within high-tech trended down 11.2 

percent. Nationwide, the declines 

were more moderate as total private 

employment declined 2.2 percent.

the 2007 North American Industry 

Classification System (NAICS) 

codes. An industry is considered 

high tech if “technology-oriented 

workers” within an industry, as 

identified by occupational staffing 

patterns, account for approximately 

25 percent or more of total jobs 

within the selected industry.4 

Applying this methodology, BLS 

analysts identified 11 industries 

from QCEW data.5 The term “high 

tech” is also used to describe 

occupations which may be located 

in both high-tech industries and 

non-high-tech industries that 

employ workers in technical 

occupations. This report uses the 

same definition as the one used by 

Daniel Hecker who classifies 71 

specific occupations as high tech in 

a 2005 BLS article.6

Employment trends 

in high tech

From the mid 1990s until 2001, 

Massachusetts experienced rapid 

growth within its Internet and 

computer-related high-tech 

industries. By December 2000, 

however, the dot-com bubble had 

burst nationally, and the negative 

impact on Massachusetts hightech firms–coupled with the onset 

of a national economic recession 

the following year–contributed to 

the beginning of a steady overall 

employment decline that lasted 

until February 2004. Massachusetts 

never was able to fully recoup the 

total job losses of the statewide 

high-tech sector or for total private 

employment at large before 

entering the second economic 

downturn in December 2007, 

which led to further declines. (See 

table 1.)

As noted, in the aftermath of 

the 2001 recession, the majority 

of high-tech manufacturing 

industries saw significant 

employment declines. Such 

large drops were caused partly 

by the increasing globalization 

2 Regional Report November 2011

Table 1. Total private employment by high-tech industry, Massachusetts and U.S., 2001 and 2009

2007

NAICS Industry Massachusetts employment United States employment

2001 2009 Net change 

2001–2009

Percent 

change

2001–2009

2001 2009 Net change 

2001–2009

Percent 

change 

2001–2009

Total private 2,861,824 2,720,758 –141,066 –4.9 109,304,802 106,947,104 –2,357,698 –2.2

high-tech industries 320,186 272,695 –47,491 –14.8 7,374,323 6,550,623 –823,700 –11.2

3254 Pharmaceuticals 7,794 9,706 1,912 24.5 280,665 283,731 3,066 1.1

3341 Computer equipment 

mfg. 21,632 12,947 –8,685 –40.1 286,233 167,764 –118,469 –41.4

3342 Communications 

equipment mfg. 15,535 3,354 –12,181 –78.4 236,908 119,537 –117,371 –49.5

3344 Semiconductor mfg. 27,185 17,615 –9,570 –35.2 643,352 377,063 –266,289 –41.4

3345 Electronic instrument mfg. 32,706 26,487 –6,219 –19.0 471,717 417,669 –54,048 –11.5

3364 Aerospace 13,411 12,133 –1,278 –9.5 506,002 491,595 –14,407 –2.8

5112 Software publishers 24,540 22,006 –2,534 –10.3 271,263 255,417 –15,846 –5.8

5413 Architecture 39,807 39,324 –483 –1.2 1,268,354 1,318,139 49,785 3.9

5415 Computer systems design 60,146 55,218 –4,928 –8.2 1,278,831 1,413,022 134,191 10.5

5417 Scientific research 33,319 44,151 10,832 32.5 530,832 611,599 80,767 15.2

(1) Internet, 

telecommunications, and 

data processing

44,111 29,754 –14,357 –32.5 1,600,166 1,095,087 –505,079 –31.6

Source: U.S. Bureau of Labor Statistics.

1

 The conversion to North American Industry Classification System (NAICS) 2007 resulted in minor definitional changes within telecommunications. A detailed 

explanation on series affected by the update is in endnote 5 at the end of the report.
annual high-tech wages averaged 

$100,208, compared with wages 

of $56,659 for all sectors. In this 

case, high-tech wages were 77 

percent above the average.

(See table 2.)

In Massachusetts, average wages 

in the high-tech industries increased by 29.6 percent from 

2001 to 2009, while private sector employment saw an increase 

of 24.4 percent. Given the degree 

of difficulty and the large human 

capital investment needed to attain the skills necessary to work 

in the high-tech sector, the notable increase of high-tech wages 

could be attributed to a highskilled labor shortage or an increase in labor demand.9

 Over the 

period, the largest wage increases 

were seen in industries where 

advanced education and training are required—the scientific 

research industry, where wages 

increased 45.0 percent, and in the 

aerospace industry, where wages 

increased 38.7 percent.

Although the high-tech sector 

of Massachusetts represents a 

relatively small share of the state’s 

workforce, the higher-than-average 

wages associated with high-tech 

industries affected the state’s economy. For example, the overall share 

of high-tech employment decreased 

from 11.2 percent in 2001 to 10.0 

percent in 2009, while the share of 

gross total wages paid remained 

constant (at approximately 18 percent of total private gross wages). 

Despite the difficult economic climate, gross total high-tech wages 

increased from $24.6 billion in 2001 

to $27.6 billion in 2009—a rise of 

12.2 percent. 

In 2009, the industries contributing the most to gross total 

high-tech wages were computer 

systems design ($6.4 billion or 23 

percent), scientific research ($4.9 

While the private and high-tech 

sectors in Massachusetts saw 

employment declines from 2001 

to 2009, the overall concentration of 

high-tech employment, as measured 

by a location quotient 8 (LQ), 

remained above the U.S. average, 

declining minimally from a LQ of 

1.97 in 2001 to 1.64 in 2009. With 

the exception of aerospace (LQ 

= 0.97), each of the 11 high-tech 

industries were concentrated more in 

Massachusetts than in the nation, in 

both 2001 and 2009. (See chart 1.)

High tech = High wage

High-tech jobs require high-level 

skills to perform technologyoriented work. In 2001, the annual 

wage of a high-tech worker in 

Massachusetts averaged $77,314. 

Compared with the average wage 

of private industry workers in 

the state, $45,561, high-tech 

wages were 70 percent higher. 

The same was true in 2009 when 

Regional Report November 2011 3
billion or 18 percent), and architecture ($3.3 

billion or 

12 percent). 

Employment 

declines withstanding, together these three 

industries comprised half of all 

high-tech wages (52.7 percent) and 

were responsible for 9.4 percent 

of all private sector wages earned 

in Massachusetts private industry. 

The three smallest high-tech industries together contributed more 

than $2.5 billion in gross total 

wages paid to employees in Massachusetts. (See table 2.) These 

industries—pharmaceuticals, aerospace, and communications equipment manufacturing—made up 

3.6, 4.4, and 1.2 percent, respectively, of total high-tech employment in Massachusetts.

Employment gains over the 

decade; Scientific research

Bucking the overall trend, from 2001 

to 2009, employment in the scientific 

research sector grew by 32.5 percent 

in Massachusetts and 15.2 percent 

nationally. Additionally, Massachusetts was one of the seven states 

which together account for more than 

half of all scientific research employment for the nation.10 In 2001, the 

LQ for scientific research in Massachusetts was 2.40; and in 2009, it

had increased to 2.84.

Currently, scientific research is one 

of the strongest high-tech industries 

in Massachusetts. From 2001 to 

2009, average pay increased by 

45 percent (the largest increase 

across all Massachusetts high-tech 

industries). Including employment 

increases over the decade, scientific 

research comprised 16 percent of 

high-tech employment in the state 

by 2009, compared with 10 percent 

in 2001. Additionally, the industry 

is expected to grow nationwide 

at an annual average rate of 2.3 

percent, outpacing the average for 

all industries, 1.0 percent, through 

2018.

11

Employment losses over the 

decade; Computer systems 

design

The positive effect of the 

Massachusetts high-tech wage 

4 Regional Report November 2011

1.64

1.34

3.03

1.10

1.84

2.49

0.97

3.39

1.17

1.54

2.84

1.07

1.97

1.06

2.89

2.50

1.61

2.65

1.01

3.46

1.20

1.80

2.40

1.06

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00

Total high-tech industries

Pharmaceuticals

Computer equipment

manufacturing

Communications equipment

manufacturing

Semiconductor

manufacturing

Control instrument

manufacturing

Aerospace

Software publishers

Architecture

Computer systems design

Scientific research

Internet, telecommunications,

and data processing

Location quotient

Chart 1. Location quotients for high-tech industries, Massachusetts, 2001 and 2009 

2009

2001

Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages.
Regional Report November 2011 5

premium was explicit in the 

computer systems design 

industry, the largest high-tech 

industry in Massachusetts, 

employing 60,146 workers in 

2001, at an average salary of 

$90,236. As such, more than 

$5.4 billion was paid from the 

computer systems design industry 

in gross total wages (4.1 percent 

of total private wages) that year. 

Unlike employment in scientific 

research, employment in 

computer systems design 

declined by 8.2 percent from 

2001 to 2009, a loss of 4,928 

jobs. However, over the same 

period, workers’ average wages 

increased by 27.8 percent to 

$115,353; and, correspondingly, 

gross total wages paid reached 

$6.4 billion in 2009. In the 

computer systems design 

industry, fewer employees earned 

more in gross total wages, in 

2009, than a larger workforce 

did a decade earlier. Seven of the 

11 high-tech industries showed 

increases in gross total wages 

over the period. Of these, five 

industries, including computer 

systems design, saw employment 

declines.

Rankings by occupation

Workers in high-tech occupations are correlated with scientific skills and technology-oriented 

work. Such workers may be located in both high-tech industries 

and non-high-tech industries that 

employ workers in technical occupations. High-tech occupations 

are scientific, leading-edge, and 

often reduce human involvement, 

regarding processes. To name a 

few, computer and information 

systems managers, biological 

Table 2. Average annual wages and total wages by industry, Massachusetts, 2001 and 2009

2007

NAICS Industry Total wages (in thousands of dollars) Average annual wages (dollars)

2001 2009

Percent 

change

2001–2009

2001 2009

Percent 

change

2001–2009

Total private 130,387,642 154,154,567 18.2 45,561 56,659 24.4

High-tech industries 24,598,594 27,604,007 12.2 77,314 100,208 29.6

3254 Pharmaceuticals 663,523 987,965 48.9 85,130 101,792 19.6

3341 Computer equipment mfg. 2,070,893 1,527,601 –26.2 95,732 117,992 23.3

3342 Communications equipment mfg. 1,150,544 310,243 –73.0 74,063 92,509 24.9

3344 Semiconductor mfg. 1,692,871 1,391,740 –17.8 62,272 79,008 26.9

3345 Electronic instrument mfg. 2,258,912 2,492,189 10.3 69,066 94,090 36.2

3364 Aerospace 961,992 1,207,248 25.5 71,729 99,504 38.7

5112 Software publishers 2,333,218 2,626,246 12.6 95,077 119,345 25.5

5413 Architecture 2,645,021 3,319,630 25.5 66,446 84,416 27.0

5415 Computer systems design 5,427,292 6,369,607 17.4 90,236 115,353 27.8

5417 Scientific research 2,526,038 4,854,645 92.2 75,815 109,957 45.0

11th1 Internet, telecommunications, and 

data processing 2,868,290 2,516,893 –12.3 64,885 88,321 36.1

Source: U.S. Bureau of Labor Statistics 1

 The conversion to North American Industry Classification (NAICS) 2007 resulted in minor definitional changes within telecommunications. A detailed explanation on 

series affected by the update can be found at the end of the report.
6 Regional Report November 2011

technicians, actuaries, and chemical engineers, work in high-tech 

occupations. In Massachusetts, occupational data show high-tech occupations are both highly paid and 

heavily concentrated across all industries.

Across states nationally, Massachusetts had the third highest average hourly high-tech occupational 

wage ($42.74), behind California 

and New Jersey. In Massachusetts, 

high-tech occupational employment represented 7.4 percent of total employment, a larger percentage 

of employment than in California 

(5.6 percent) or New Jersey (5.8 

percent). In Virginia, 7.6 percent 

of total occupational employment 

was in high tech, but average hourly wages in the sector were lower 

($41.71). In 2009, Massachusetts 

had the highest high-tech occupational wage among states, with a 

high-tech occupational concentration of 7.0 percent or greater. (See 

chart 2.) Across states, the share 

of high-tech employment in Massachusetts was among the highest, 

and such workers were among the 

highest paid across states nationally. 

Conclusion

During the first decade of the 21st

century, Massachusetts suffered 

huge job losses in private sector 

employment and an even larger 

percentage decline in high-tech 

jobs. While high-tech jobs accounted for only 1 of 10 workers, nearly 

20 percent of all wages in the state 

were attributed to high tech. In 

2009, with the exception of aerospace, each of the high-tech industries were concentrated more in 

Massachusetts than found nationally. 

The importance of high-tech occupations in Massachusetts is underscored by their higher wages. 

In 2009, the average high-tech occupational wage in Massachusetts 

was $42.74, more than a dollar 

above the average high-tech wage 

in the most occupationally concentrated state, Virginia. 

Finally, as the overall economy—

as well as the high-tech industries—shift from manufacturing to 

services, the two largest high-tech 

industries in Massachusetts are 

well-positioned service-providing industries—scientific research 

and computer systems design. 

Percent employed in technology-oriented occupations

Chart 2. High-tech wages by state, 2009 

Source: U.S. Bureau of Labor Statistics, Occupational Employment Statistics

7.4, $42.74

20.00

25.00

30.00

35.00

40.00

$45.00

2.0 3.0 4.0 5.0 6.0 7.0 8.0

Weighted mean hourly wage

All states MA VA CA NJ Linear (All states)
Collectively, high-tech industries, 

as well as high-tech occupations, 

should continue to remain significant contributors to the Massachusetts economy.

Regional Report November 2011 7
Notes

1 The NBER’s Business Cycle Dating Committee maintains a chronology of alternating peaks and troughs of economic activity for the U.S. business cycle. The committee 

defines the period between a peak and a trough as recessionary or nonrecessionary, by examining and comparing the behavior of various measures of broad economic activity, and applies its judgment when defining recessions. The first recession, in the period considered, began in March 2001 and lasted through November 2001. The second 

began in December 2007 and lasted through June 2009. (See "US Business Cycle Expansions and Contractions" http://www.nber.org/cycles/) 

2 A bubble is a situation in which the price of an asset differs from its fundamental market value. See Frederic Mishkin, The Economics of Money, Banking, and Financial 

Markets, Boston, MA, Addison Wesley, 2003, p. 712.

3 Between 1990 and the peak in mid-2000, U.S. equity prices increased nearly five-fold, known as the “dot-com” bubble. This episode ended with a sharp downward adjustment that started later in 2000. See NBER Working Paper Series, 2005, The Dot-Com Bubble, The Bush Deficits and The U.S. Current Account. Cambridge, MA, National 

Bureau of Economic Research, p. 2.

4 Daniel Hecker, “High-technology employment: a NAICS-based update,” Monthly Labor Review, July 2005, pp. 57–72.

5 Due to minor definitional changes in the conversion to NAICS 2007, for this report employees in telecommunications have been aggregated under one industrial classification, called “Internet, telecommunications, and data processing.” The aggregated industry includes data for NAICS codes 516, 5173, and 5175 from the previous classification system and 51913 from the 2007 classification system. These codes were affected by the NAICS update. The aggregate high-tech industry category also includes data 

from NAICS codes 5171, 5179, and 518, which were not affected.

6 Hecker, “High-technology employment, 2005.”

7 William Lazonic, University of Massachusetts professor and director of the Center for Industrial Competitiveness, and Steven Quimby, chief information technology officer at the University of Massachusetts, Transitions of a Displaced High-Tech Labor Force. Lowell, MA, University of Massachusetts Press, 2006, p. 113.

8 Location quotient analysis is a statistical measure using ratios that compare the concentration of employment in an industry in a defined area with that of a larger area or 

base. In this report, location quotients are used to compare the proportion of the Massachusetts workforce employed in high-tech private industry with the proportion of the 

national workforce employed in high-tech private industry. A high-tech industry with an LQ greater than 1.0 employs a greater concentration of workers in Massachusetts 

relative to the national share.

9

Alicia Sasser Modestino, Mismatch in the Labor Market: Measuring the Supply of and Demand for Skilled Labor in New England, Federal Reserve Bank of Boston, 

November 2010, pp. 6–9.

10 Just seven states—California, New York, Massachusetts, Illinois, Maryland, Pennsylvania, and New Jersey—account for more than half of all employment in the industry. 

See Career Guide to Industries, 2010–11 Edition, “Scientific Research and Development Services,” http://www.bls.gov/oco/cg/.

11 Occupational Outlook Quarterly, A special issue: Charting the projections: 2008–18, Winter 2009–10, p. 42.

Bureau of Labor Statistics

National Office

Postal Square Building, Rm. 2850

2 Massachusetts Avenue, NE

Washington, DC 20212

U.S. Bureau of Labor Statistics

San Francisco Regional Office

90 7th Street, Suite 14-100

San Francisco, CA 94103

8 Regional Report November 2011

Bureau of Labor Statistics

Boston/ New York Regional Office

JFK Federal Building, Room E-310 

Boston, MA 02203