Tuesday, December 20, 2005

 

San Diego Tech Jobs Sluggish

From Union Tribune

As the San Diego economy boomed in the late 1990s, technology companies supplied much of the rocket fuel, with biotech and telecommunications leading the way.

Yet over the past four years, technology employment has been stuck in neutral, according to statistics from the California Employment Development Department. Jobs at biotech, software and electronics companies are down 8 percent from January 2002 through October 2005.

While electronics manufacturing has been hardest hit – dropping 2,600 jobs – it's not alone in dragging down local tech employment. Software publishers employ 700 fewer workers. Pharmaceutical and medical manufacturing has dipped by 1,040 jobs.

For many industry experts, the statistics are surprising and, frankly, hard to believe. Technology was a savior of the region's economy after the defense and aerospace bust of the early 1990s, creating many of the county's new jobs and now accounting for 10 percent of the region's total employment.

The rise of companies such as Qualcomm led some to speculate that San Diego could emerge as a technology hub akin to Silicon Valley. The San Diego Regional Economic Development Corp. dubbed the region "Technology's Perfect Climate."

While the local economy overall has been strong over the past four years, with continued job growth and unemployment rates below the national average, most tech companies haven't been big contributors.

Instead, construction, real estate, tourism and retail have created most of the county's new jobs. [construction and real estate are tightly related, real estate and retail are related in equity has been used to increase purchasing power]

Technology could be on the verge of an awakening. Many local companies have dozens – even hundreds – of openings. Some are having a hard time filling positions. Websense, a San Diego-based Web filtering provider, hired 33 workers in the third quarter and has 40 positions open now.

"Staffing continues to be a challenge across the board, from very technical people to non-technical people," said Susan Brown, senior vice president of human resources for Websense, which has 570 employees.

Yet up until now, the recovery in the local technology landscape has been uneven. For every Qualcomm, which has 500 openings, there is a Kyocera, which cut 900 jobs in San Diego this year. For every ViaSat, which has about 60 openings in Carlsbad, there is an Intel, which moved 169 jobs from San Diego to Portland, Ore., in June. For every Invitrogen, which has more than 110 position available in California, there is a Merck, which eliminated 109 jobs at its La Jolla facility last summer.

When Josh Rabinovitz, 30, moved from Gainesville, Fla., to San Diego in October, he sent out résumés in response to hundreds of jobs listed on tech-focused job boards on the Internet. Rabinovitz has six years of experience in information technology, a master's degree in information science and an undergraduate degree in finance.

Rabinovitz has found the job market mixed. He has gotten plenty of responses. He turned down one job with a small company because the pay was too low. He has a couple of leads for other positions. But none is in information technology management, where he would like to work.

"The technology world has become kind of tricky," Rabinovitz said. "There are two types of people. There's someone like me, who is a jack-of-all-trades, or there's somebody who's very highly specialized with a particular programming language or two. What I've found is there are a lot of jobs out there for the specialized people.

"It's not that I couldn't learn it. But there's a very big premium put on experience, more so than education, in the job market right now."

While some tech industry experts say a recent hiring surge by local tech companies soon may turn around the overall employment statistics, others are skeptical. More biotech and electronics companies are outsourcing lower-level jobs that used to be done in-house.

In biotech, some upstart companies are going virtual, outsourcing much of the initial animal research and chemistry work to firms overseas.

As a result, they don't need to establish an expensive lab in San Diego and staff it with high-paid scientists. Local venture capital firm Enterprise Partners has funded two virtual biotech startups recently, Celladon Corp. and Ascenta Therapeutics, said Drew Senyei, a partner in the firm.

"In China, a chemist will make one-third of what a chemist makes here," Senyei said. [Are San Diego chemists three times better?]

Some virtual biotechs have used outsourcing firm WuXi PharmaTech of Shanghai for medical chemistry work "with excellent results," Senyei said.

In addition to outsourcing, many technology companies expect permanent programmers, engineers and scientists to do more and have higher skills than was the case during the dot-com boom years.

"Someone who is doing Web development also is expected to do a little more hard-core programming – systems programming, database programming," said Brett Humphrey of Fairway Technologies, a San Diego outsourcing firm which provides contract software programmers to clients.

Technology and biotech jobs in San Diego, including aerospace, totaled 126,140 at the end of October, according to the California Employment Development Department.

While state statistics are good at pinpointing certain categories of tech jobs, they are not perfect. They tend to under-report overall technology employment. Tech workers employed by Manpower, Robert Half and other outsourcing companies are not separated from all other, nontechnical temporary workers. Therefore, they are not included in the tech jobs estimate. Other technology jobs are buried in employment categories that include professions such as architects, so they also aren't included.

Still, job data in tech-oriented categories show a jagged job market since January 2002. This year, tech companies have laid off more than 3,000 workers, according to filings under the Worker Adjustment and Retraining Notification, or WARN, Act.

Part of the decline stems from a tech recovery that hasn't treated all technologies equally, said Matthew Kazmierczak, vice president of research for the AeA, formerly the American Electronics Association. With the exception of wireless, telecommunications remains down locally and nationally.[Everybody who wants a cell phone has one by now. The focus now is on commoditizing technology, not design.] Electronics manufacturing nationwide has added jobs recently but is nowhere near employment levels seen during the boom years.

"There has been a pickup in 2005, but it's not huge, and it's mostly confined to the services side," Kazmierczak said.[Aren't these service jobs low-paying?]

Although local technology jobs haven't increased, the county is still adding workers overall. The jobs have been most plentiful in tourism, retail and real estate, said Alan Gin, an economist with the University of San Diego. [The quoted statistic is that 40% of new jobs in the last 10 years are related to real estate. ]

"The thing that's concerning about the (tech job statistics) is those are high-paying jobs," Gin said. "If we're not getting growth there, it's a little bit worrisome given the high cost of living in San Diego."

For San Diego companies trying to recruit workers, it's still a struggle to find people with the qualifications they want. Steve Estes, vice president of human resources for satellite communications maker ViaSat, said software engineers with security clearance to work on the company's military contracts are a particular need. At Websense, Internet security programmers are in high demand.

On Monster.com, a Web site for job seekers, almost 300 information technology openings have been posted in San Diego in the past 30 days. Nearly 145 openings were available in biotech.

"There's really no shortage of jobs," said Humphrey of Fairway Technologies, the outsourcing firm. "So the problem for us has never been finding the work but finding the right people." [He means the "right people" at the RIGHT PRICE! ]

Phil Blair, a co-owner of Manpower in San Diego, said getting skilled tech workers to move to high-priced San Diego remains a challenge. More companies are paying signing bonuses and providing other incentives.

"The reason Qualcomm has 500 job openings here in San Diego is they can't get people to move here," Blair said. "It's not the quality of life. It's the cost of living."

Blair worries that tech companies in lower-cost cities will begin exploiting housing affordability to recruit local workers.[He should be making this statement in the past tense since it's already happened and is happening. ]

"The danger is a company sitting in Cincinnati needs 20 high-tech people, they come to San Diego and can say, 'Your quality of life will double. Yes, the weather is a pain. But here's the quality of the schools. This is the type of house you can buy for the same price,' " he said. "So I'm concerned about people being sucked out of San Diego [It's already happened and is happening. ]

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