As recently as 2001, a study by the industry organization American Electronics Association (AEA) had ranked Georgia ahead of all other states in growth of this industry sector. High-tech jobs are important economically because of their generally high wages.

"Georgia did well in adding high-tech jobs in the boom years of the 1990s," says researcher Philip Shapira, a professor in Georgia Tech's School of Public Policy. "But, following a peak at the end of 2000, Georgia's high-tech jobs total has declined in every subsequent quarter."

Despite losing high-tech jobs overall at a rate faster than the nation, several sectors within the technology segment have actually gained employment. Jobs in engineering and architectural services, research and testing services, and drug manufacturing grew in Georgia between 2000 and 2002.

"Georgia has special capabilities in these areas," notes Jan Youtie, a researcher in Georgia Tech's Economic Development Institute who co-authored the study with Shapira and Public Policy Doctoral Student Jue Wang. "We have a critical mass of engineering capabilities and research capabilities; it's the third-largest sector with over 31,000 jobs in 2002."

The Georgia Tech study indicates that Georgia's competitive advantage lies in research- and service-related technology sectors. Three service industries make up more than 70 percent of Georgia's high-tech sector: telecommunications services, computer and data processing services, and engineering services.

In 2002, high-technology firms employed nearly seven percent of Georgia's workforce, or 222,000 employees.

The Georgia Tech study also demonstrates that high-tech services is a larger employment sector in Georgia than high-tech manufacturing, with services accounting for approximately 177,000 jobs and manufacturing accounting for approximately 44,000 jobs. The services sector also accounts for higher wages than high-tech manufacturing.

Georgia's specialty is in knowledge-intensive high-tech services rather than manufacturing, according to Youtie. "High-tech services in Georgia are often overlooked despite outperforming high-tech manufacturing in employment scale and average wages."

Overall, Georgia's high-tech industries paid very well compared to the average private sector firm. Average weekly wages for employees in Georgia high-tech establishments in 2001 were $1,192, compared to $684 for all private-sector employees. That has magnified the economic impact of the job losses, Shapira notes.

"These are much higher wage jobs, so it's nice when they go up. But when they go down it takes a disproportionately greater amount of money out of local economies," he says.

While national employment levels in high-tech sectors stabilized during the second quarter of 2002, Georgia's high-tech employment levels continued to drop, according to the study. Georgia's decline began one quarter before national employment levels began to drop and continued to fall by 1.6 percent between the first and second quarters of 2002 - even as high-tech employment stabilized nationally.