State lost 400 tech jobs in '02, survey says

By Sean Hao
Advertiser Staff Writer

Hawai'i lost 400 technology jobs, or 3 percent of its overall high-tech workforce in 2002, according to a survey released yesterday.

The decline was far less than the average 8 percent dip in technology jobs nationwide, according to AeA's annual Cyberstates survey. AeA is a trade group formerly known as the American Electronics Association

However, Hawai'i also had one of the smallest technology sectors in the country — ranking 47th among the 50 states with 13,353 technology jobs.

The decline in Hawai'i's tech employment came despite the availability of one of the nation's most generous technology industry tax incentives — Act 221.

Through fiscal years 2002 and 2003, the controversial program's estimated cost to the taxpayers amounted to $70.3 million.

At the same time, the study supports the notion that technology jobs are highly lucrative, averaging $53,767 in annual wages. That was enough to rank Hawai'i 26th among the states in terms of average high tech wages.

Still, the study shows that Hawai'i has a long way to go in terms of establishing a vibrant technology industry. In addition to ranking low in terms of technology industry employment, Hawai'i ranked 41st in per capita research and development spending and 47th in venture-capital investments.

Bill Spencer, president of the Hawai'i Venture Capital Association, said the impact of Act 221, which took effect in 2001, would not be immediate because any seed capital raised through the program would be used on startup costs. Significant hiring would come a few years later.

"Hence, I think it is way premature to expect 221-stimulated job growth to show up before 2004 for most 221-funded companies," Spencer said.

Hawai'i's high-tech job losses came at a time when the technology and telecommunications industries nationwide continued to struggle.

Overall, the nation's high-tech industry lost 540,000 jobs in 2002, with total employment dropping to 6.0 million.

Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.