The real story behind high-tech jobs

We’ve all heard the damning indictment - technology destroys jobs. While it is true that the digital revolution disrupts the workplace - just as the Industrial Revolution swept away many artisan professions such as weavers - a new report by University of Leuven researchers tells a fascinating story of how the high tech revolution is, surprisingly, creating an explosion in non-high tech jobs in Europe. Indeed, for every one high-tech job created, more than four additional non-high tech jobs are created in the same region.

That’s not the only good news, either. Across the European economy, the high-tech sector is showing impressive signs of growth. The new research shows that high-tech employment grew 20 percent in the EU-27 between 2000-2011, while total employment increased by just eight percent.

Growth in high-tech jobs also has a positive spillover effect in local economies. The presence of high-tech workers in a region is likely to create additional work for a wide range of occupations - from lawyers, doctors and school teachers to taxi drivers, waiters and technicians.

This spillover is not limited to Europe’s biggest economies. While Germany contributed the most to total high-tech employment in Europe, it is relatively unexpected regions in Europe that saw the fastest growth in high-tech jobs. For example, Bratislava, Slovakia is one of the fastest growing regions for high-tech employment, growing at nearly 56 percent from 2000-2011. This contributes to the region’s high level of per-capita income and contrasts with assumptions that high-tech jobs are only in traditional hubs.

Not only is the high-tech sector outperforming other sectors in total employment growth, but its workers enjoy high rates of employment, a substantial wage premium (over 65% in some countries, like Portugual and Romania) and higher wage growth. With many economies struggling with stagnant wages, a vibrant high-tech sector makes a strong contribution to these countries.

So what lessons should we take from these findings?

First, that the EU’s pursuit of high-tech and digital job growth is worthwhile. The Europe 2020 strategy and recent agreements at the European Digital Council provide the opportunity to build on the success of the past ten years to support this vibrant part of the economy.

Second, we know that supporting high-tech jobs will benefit the wider economy. The high-tech sector is generating faster, higher-paying job growth across the EU-27, the knock-on effect of which is positive across the economy.

Third, investing in high-tech and digital skills will pay dividends. The difference in wages between STEM (science, technology, engineering and math) jobs and non-STEM jobs is high right across Europe. And with the high-tech jobs multiplier, supporting skills development in high-tech fields should create benefits beyond traditional high-tech industries.

As these jobs spread across the continent, it is clear that supporting high-tech industries will benefit the whole economy and make a substantial contribution to resolving the unemployment crisis facing many economies.