On June 24, AeA released Cybercities 2008: An Overview of the High-Technology Industry in the Nation’s Top 60 Cities.  This report examines the high-tech industry in the largest metropolitan areas focusing on high-tech employment, wages, establishments, payroll, employment concentration, and wage differential. The report also delves into the 16 sectors that comprise AeA’s definition of the high-tech industry for these 60 cities.

Cybercities 2008 is a sister publication to AeA’s annual Cyberstates report, which for 11 straight years has examined the high-tech industry across all 50 states, the District of Columbia, and Puerto Rico. AeA has not published a national Cybercities report since 2000, before the high-tech bubble burst.  With the industry experiencing three consecutive years of job growth, we decided it was time again to drill down to see which cybercities are growing and across which sectors.

This is useful for two reasons.  First, many states, most notably California, Florida, and Texas, have multiple high-tech clusters.  Looking at the total number of high-tech jobs in California is informative, but it does not show where within the state those jobs are located.  When we published California Cybercities two years ago, for example, many people were surprised to learn that high-tech jobs were fairly evenly split between Northern and Southern California.

The second reason Cybercities is a useful complement to Cyberstates is that a number of metropolitan areas cross multiple states.  The New York Metro Area, the nation’s largest cybercity, extends across counties in New York, New Jersey, and Pennsylvania.  Washington, DC, the nation’s second largest cybercity, extends across the District of Columbia, as well as counties in Maryland, Virginia, and West Virginia.  While Cyberstates shows Virginia to be the nation’s fifth largest cyberstate, Cybercities shows that much of this is attributable to high-tech jobs located in the suburbs around the nation’s capital.
Both cyber reports rely on data from the U.S. Bureau of Labor Statistics (BLS).  Metropolitan employment, wage, establishment, and payroll data are for 2006, the most recent available at publication.  The metropolitan data in Cybercities 2008 is directly comparable to the 2006 state data in Cyberstates 2008.

Fifty-one of the top 60 cybercities experienced net job growth in 2006.  Seattle added the most jobs at 7,800, followed by the New York Metro Area, which added 6,400 and Washington, DC, which added 6,100.  On a percentage basis, Riverside-San Bernardino saw the fastest job growth in 2006 at 12 percent.

San Jose/Silicon Valley continued to lead the nation with the highest concentration of tech workers, with more than one of every four private sector workers employed in the tech industry. Boulder, Colorado and Huntsville, Alabama had the next highest concentrations of private sector tech industry workers.

The high-tech industry employs highly educated workers and pays them well --- 87 percent more than the average private sector worker nationwide.  Fifty-six cybercities had wage differentials higher than 50 percent and three cybercities --- Austin, San Diego, and Sacramento --- had differentials higher than 100 percent.

Although the U.S. tech industry continues to add jobs, AeA is concerned that future growth is being jeopardized unless the United States prepares itself for a vastly more competitive global marketplace.  It must rededicate itself to the factors that brought us our economic and technological leadership.

In March 2007, AeA released the report, We Are Still Losing the Competitive Advantage: Now Is the Time To Act, building on a similar report we released in 2005.  Both reports warned of an impending slide in U.S. global competitiveness caused by the negligence of our political leaders to improve our education system, invest in research and development (R&D), promote private R&D, allow the best and brightest from around the world to work in the United States, and open foreign markets to U.S. tech goods.

The tech industry has long demonstrated its ability to drive the U.S. economy.  But it will continue to do so only if we as a country address unprecedented global competitiveness challenges as nations around the world open their markets to trade, embrace technology, and invest in research and education.

If Americans are to compete in a global economy that is knowledge-based and driven by technology, the U.S. education system needs to improve dramatically.  Recent international tests show that American 15-year-olds ranked 29th in science and 35th in math compared to their peers in other developed countries.  Skilled workers are critical to the technology industry, and the United States needs to ensure that the American education system from K-12 to our colleges and universities produces enough scientists and engineers to support an industry that is so crucial to our economic prosperity.

Additionally, U.S. federal R&D funding has faltered.  Federal research generated numerous technological breakthroughs in the 20th century, from the Internet to the MRI scanner to GPS --- to name just a few.  The tech industry’s extraordinary success was built, in large part, on R&D investments from 20 to 30 years ago.  But as a percentage of the economy, federal investments in R&D have declined from their peak in the mid-1980s.

Meanwhile, Congress has let the R&D tax credit lapse yet again, the 12th time in the past two decades.  Not having a permanent credit in place creates uncertainty and constrains the ability of U.S.-based companies to plan for long-term R&D projects.  This discourages investment in future innovation in the United States.  Other countries, including China, have attractive R&D tax credits that are permanent.

We also need to support high-skilled immigration.  Tech companies need to be able to recruit the best and the brightest from around the world.  Given the poor state of our education system and the lack of American kids pursuing careers in science and engineering, high-skilled immigration is a critical safety valve for high-tech companies.  Half of all U.S. graduate degrees in engineering go to foreign nationals.  Yet, these people often have to leave the country as soon as they graduate because they can’t get a visa to stay.  We educate them and then tell them to go home. This is absurd.

These talented individuals do not come here and take American jobs; they create thousands of jobs by developing intellectual property, spawning innovation, and founding companies.  Foreign-born individuals helped found eBay, Google, Intel, Sun Microsystems, and Yahoo! --- to name a very select few.  One quarter of all engineering and technology companies started in the United States between 1995 and 2005 claimed at least one foreign-born founder.

Lastly, opening new markets to trade and expanding existing markets is critical to maintaining American competitiveness in a global marketplace.  Trade contributes greatly to economic growth and prosperity, both domestically and worldwide.  It opens markets to exports that support hundreds of thousands of jobs in the United States.  It saves money for American consumers by allowing in low cost goods from around the world.  Policymakers need to renew our long-held commitment to promoting the opening of new markets and ensuring that American workers are prepared to compete for the jobs that are created by embracing such globalization.

AeA was proud to have been instrumental in promoting legislation that became the America Competes Act, which overwhelmingly passed through both houses of Congress and was signed into law in August 2007.  This Act addresses many of the education and R&D funding issues raised here, though it does not address issues related to high-skilled immigration or trade.  The bill only authorized these measures, but no funding was provided for this legislation.  We call on the President and the Congress to make certain the America Competes Act is fully funded in 2008.

Matthew Kazmierzcak (bio)
Vice President, Research & Industry Analysis

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U.S. Census Bureau Provides Export Controls Committee with Details of New Foreign Trade Regulation: Customs Committee Hears from USTR on Recently Filed Dispute Consultation at WTO In mid-June, the Microsoft Corporation hosted the second quarter meetings of the AeA Customs and Export Controls Committees at their corporate headquarters in Redmond, WA. On Thursday, June 12, Rita Spencer-Rout, Director, Global Trade Solutions, Cymer, and west coast chair of the AeA Export Controls Committee facilitated the quarterly meeting, which was attended by over fifty trade compliance professionals.  Attendees received an update on the recently published mandatory Automated Export System (AES) regulation from William G. Bostic Jr., Division Chief, and Dale Dickerson Kelly, Chief, Regulations, Outreach and Education Branch, Bureau of Census, Foreign Trade Division.  All companies must be compliant with the provisions of this rule by September 30, 2008. Matthew S. Borman, Acting Assistant Secretary for Export Administration, Bureau of Industry and Security, U.S. Department of Commerce, provided a regulatory update including status of the intra-company transfer license exception, expanded entity list, encryption regulation, and Commerce Control List (CCL) review.  Speaker presentations and meeting minutes are available on the following AeA webpage. On Friday, June 13, the AeA Customs Committee, Chaired by Anne Marie Griffin, Deputy Director Global Trade Policy, Microsoft Corporation, heard from Brenda Brockman Smith, Executive Director, Trade Policy and Programs, Office of International Trade, and Kimberly Marsho, Director, Trade Relations, Office of International Affairs and Trade Relations, U.S. Customs and Border Protection (CBP). The CBP officials discussed the seven priority trade issues, mutual recognition of security programs and trade facilitation initiatives. Jason Bernstein, Director for Market Access, Office of Industry, Market Access, and Telecommunications at the Office of the United States Trade Representative informed committee members of the process and next steps for the recently filed dispute consultation in the World Trade Organization with the European Union.  Several AeA members have contributed to the efforts leading up to this action.  Detailed meeting minutes are available on the following AeA webpage. Participation on these committees is free to all AeA members. For more information or to join, contact Ken Montgomery at ken_montgomery@aeanet.org or to learn more about all of AeA’s International committees contact Rob Mulligan at rob_mulligan@aeanet.org. Rob Mulligan (bio) Senior Vice President International Participants in the AeA Customs and Export Controls Committee Meetings held at Microsoft Corporation in Redmond, WA For more information on the International Issues affecting your company, visit: The AeA International Update AeA India High Tech News Report China IT Weekly Europe in a Page back to top   Leading Government Affairs Professionals Gather in Washington, DC at AeA’s Semi-annual State Government Affairs Meeting On June 17, approximately 30 high-tech state government affairs professionals from across the nation gathered in AeA’s David Packard Conference Center to discuss the latest news from state legislative sessions, and to strategize for the 2009 legislative year at the semi-annual AeA State Government Affairs meeting.  The meeting was chaired by Jim Wall, Regional Government Affairs Director, Microsoft, and Monica Mueller, State Government Affairs Manager, Motorola. These semi-annual meetings allow AeA to interact directly with our member companies and discuss important issues surrounding the high-tech industry at the state level.  They are imperative to ensure that AeA's State Government Affairs program will continue to address members’ legislative needs. Between the meetings, AeA hosts regular conference calls on the priority issues, and intelligence is shared on AeA's SGA Information Network - a web-based resource which provides one-of-a-kind information on issues affecting the high-tech industry.  The AeA Information Network was designed to allow members to easily obtain information regarding state government affairs activities that impact their companies. AeA is currently following these policy issues in the states: e-commerce, education workforce, emerging technologies, environment, tax, procurement, and other state-specific issues. For more information about AeA’s State Government Affairs grogram, please visit www.aeanet/.org/sga. Roxanne Gould (bio) Senior Vice President, State Government Affairs Chris Hansen, President & CEO, AeA; SGA Chairman Jim Wall, Microsoft; SGA Vice-Chair Monica Mueller, Motorola; and Roxanne Gould, SVP, State Government Affairs, AeA (L-R) Policy experts from AeA member companies discuss recent policy developments around the U.S.   Deb Calevro, Director, Procurement, AeA, and Andrew Wise, Microsoft (L-R) For more information on State Government Affairs (SGA) issues affecting your company, visit: The AeA SGA Information Network AeA Online Legislative Tracking Tool AeA State Government Affairs Newsletters back to top Steve Ballmer Delivers Keynote at the 2008 AeA Technology for Government Dinner On June 3, 2008, AeA hosted its annual Technology for Government Dinner, the premier Washington, DC networking event which brought together over 700 industry, congressional, and government leaders at one venue.  In attendance were Chief Information Officers and procurement officials from countless federal agencies, Members of Congress and their staff, officials from the Bush Administration, and CEOs and senior executives representing high-tech companies. Steve Ballmer, Chief Executive Officer, Microsoft Corporation, honored the attendees with a spirited keynote address that discussed the future of computing and the Internet.  Following the keynote, Mr. Ballmer also answered questions from countless industry and government executives in the room.  “Microsoft Public Sector is honored to participate with our CEO, Steve Ballmer, in AeA’s 2008 Annual Technology for Government Dinner,” said Teresa Carlson, General Manager, U.S. Civilian Government & International Global Organizations at Microsoft.  “Steve’s keynote address allows Microsoft and AeA to jointly address how information technology continues to innovate, rapidly enabling businesses and government leaders to solve the mission critical real time situations they face as they serve citizens of the United States and our overseas partners.” AeA would like to thank all of our sponsors for this event for their commitment to the association, the 100+ government guests that attended, and the countless more that work tirelessly to advance the business of technology.  Watch Steve Ballmer's 2008 AeA Technology for Government Dinner Keynote For more information on the dinner and other business development opportunities with-in AeA's Government & Commercial Markets Group, please contact Goldy Kamali at 202.682.4432.   Steve Ballmer, CEO, Microsoft   Steve Ballmer & Chris Hansen, President & CEO, AeA (L-R)       Goldy Kamali, Executive Director, AeA's Government & Commercial Markets Group; Karen Evans, Administrator of E-Government and Information Technology, Office of Management and Budget, Executive Office of the President; & Greg Poersch, Acting Chief Operating Officer, AeA (L-R)   Nigel Ballard, Federal Marketing Manager, Intel, and Chair of AeA's Marketing for Government Business Steering Committee; Jim Cane, SSCI; and Adair Martinez, Deputy Chief Information Officer, Veterans Affairs (L-R)       Diana Gowen, Senior Vice President & General Manager, Qwest; Jackie Everett, Vice President & Deputy Chief Marketing Officer, SI International; Marty Wagner, Deputy Commissioner, GSA; Casey Colemen, Chief Information Officer, GSA (L-R)   Jack Neal, SafeNet; Charlie Armstrong, Deputy Chief Information Officer, Dept. of Homeland Security; and Chris Munley, Booz Allen Hamilton (L-R) back to top Save Time and Money with the AeA Preferred Credit Union Look no further than KeyPoint Credit Union for innovative programs to help you save time and money, and improve your quality of life.  Current opportunities include: Worldwide ATM rebates Unlimited check writing On-call telephone service Online real-time banking, bill pay, express statements and more To learn more about ways to save go to www.keypointcu.com or to learn more about additional AeA member company discounts for the KeyPoint Credit Union visit www.aeanet.org/keypoint.   back to top November 2-5, 2008 Manchester Grand Hyatt In San Diego, California Exclusively Showcasing Publicly Traded AeA Member Companies  With a Market Cap or Revenues Between $100M - $4B Moving back to San Diego this year, the AeA Classic Financial Conference continues to provide it's member companies with an unbiased, time and cost effective forum to promote investor interest.   Since 1971, more than 1600 member companies and 6000+ investors have leveraged the Classic to identify successful business relationships. New for 2008: The AeA Classic will feature a special track focused on Alternative Energy and Green Tech Companies. Additionally, companies traded on foreign exchanges, that meet all other AeA requirements, will be invited to present at the conference. Access 500+ investors and executives from 150+ companies in one location Leverage the small group break out sessions to exchange information and identify new investors Network with fellow executives and the financial community in a casual setting Presenting company invitations have been sent. To register or for more information, visit