The decline of high-tech manufacturing in the United States

In 2012, Brookings Institution identified three manufacturing sub-sectors employing unusually high concentrations of engineering and science occupations as “very high-tech” manufacturing:

• Computer and electronic products

• Pharmaceuticals & medicine

• Aerospace products and parts

While these sub-sectors don’t capture the entirety of high-tech manufacturing, they do represent a large portion of it. Using 2022 County Business Patterns data from the Census Bureau, I’ve created a map to summarize the current state of high-tech manufacturing employment in the U.S. (Note: I’m adding medical devices—NAICS 339112 surgical and medical instruments—in as well):

I was curious how this landscape has changed, so I went back 35 years to make a version for 1987. Click here to view an animated version. This comparison reveals that while traditional centers like Silicon Valley, Seattle, and Boston’s Route 128 corridor remain important, the intensity of employment has generally decreased across most regions. Some areas have maintained their specializations—aerospace in Seattle and Wichita, pharmaceuticals in New Jersey, and electronics in Silicon Valley—but at lower overall employment levels. Pharmaceuticals and medical devices have increased in relative prominence since 1987.

National employment numbers confirm a large drop in employment in high-tech manufacturing. Since 1990, employment has fallen by nearly 1 million in these sub-sectors. Computers and electronics dropped by 850K while aerospace employment fell by nearly 300K. Only pharmaceuticals and medical devices gained employment, with a net increase of just 189K.

As a proportion of national employment, the decline has been even steeper. High-tech manufacturing employment dropped from 2.8% to 1.3%, a 50% drop in the share of total employment.

High-tech manufacturing’s portion of the economy has also been falling, from 4.8% in 1987 to just 2.6% in 2023.

While the decline of high-tech manufacturing is evident in both employment and output trends, some optimism has been sparked by 2022’s CHIPS and Science Act, which included billions in tax credits to promote semiconductor manufacturing located in the U.S. While the CHIPS Act seems to have led to a boom in factory construction for computer and electronic products, the effect on employment in the industry remains difficult to see. While the act’s employment effects might not be visible due to the fact that the semiconductor fabrication facilities have not opened yet, delays in opening due to workforce issues at TSMC’s Pheonix plant suggest potential staffing problems. President Trump’s funding freeze and preference for tarriffs over subsidies could throw even more uncertainty into the mix. Regardless, estimates of the employment effect of the CHIPS Act have ranged from just 36,300 to 56,000 jobs, which would offset just 4-6% of the total declines over the past 35 years.

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