Posted on Mon, Dec. 22, 2008
last updated: March 15, 2013 11:58:40 AM
WASHINGTON — The U.S. economy is sinking deeper into recession and companies are shedding hundreds of thousands of jobs, but the technology firms that Santa Fe, N.M., venture capitalist Trevor Loy invests in haven't stopped growing.
In fact, they're still adding to their payrolls, and they plan to continue doing so next year. The firms that Loy is funding are developing products such as state-of-the-art water purification systems and the next generation of construction site surveying cameras.
They're part of a select swath of the U.S. economy that's been protected — so far — from the bad economic weather. They're schools and health-care providers, information-technology firms and green energy start-ups and other firms that, while not thriving, are at least still hiring.
"The end markets they serve are not shrinking," Loy said of some of the more than two-dozen companies he funds.
"The world's need for clean water, for clean energy, especially if there's infrastructure stimulus, will be growing, and companies working with new technology can act more quickly than traditional companies can."
Such start-up firms also generally don't depend on the short-term financing that large companies need, which means they haven't been hit as hard by the shriveling of credit markets, Loy said.
U.S. Labor Department statistics show the growth is happening despite the overall negative numbers. The education and health-care industries added about 140,000 jobs to their payrolls from July to November, while the natural resource and mining sector added 23,000 jobs in the same period, according to the data, which are adjusted for seasonal hiring patterns.
That contrasts with the loss of nearly 1.4 million nonfarm sector jobs during those five months, with the heaviest losses hitting professional and business services, which includes accounting, temporary employment agencies and waste management, the Labor Department figures show.
Education and health services historically have been resistant to economic downturns because they're often the last items on local government and household budgets to be axed, said Gary Burtless, a labor economist at the Brookings Institution, a center-left policy research organization in Washington.
Demand for education also is growing as unemployed workers go back to school to beef up their resumes, Burtless said.
"State and local governments just think it's unavoidable to pay these education expenses," Burtless said. "And you're not going to postpone your surgery just because the economy's bad."
Also growing are jobs that help companies ramp up sales or cut employees to survive the bad economic times.
For example, sales representatives, followed by account/customer support professionals, topped the list of 25 most recession-proof jobs compiled by the online employment search site Jobfox.
"In this environment, sales needs are huge," said Jobfox spokesman Barry Lawrence. "You can't get out of this situation unless you sell goods and services."
The big hope for job seekers is that the incoming Obama administration makes good on its promises to launch a multibillion-dollar economic stimulus and financial regulation plans that will spur new employment.
If that happens, Jobfox predicts big staffing boosts in civil, electrical and mechanical engineering, construction management and compliance accounting, among other fields.
Lawrence said the biggest area of job growth remains in information technology, especially for small- and medium-sized companies that can adapt more nimbly to changing economic realities.
In recent weeks, technology giants such as Yahoo and Sun Microsystems have slashed staff to make up for dropping revenue.
"(Information technology) is just embedded in every company and nonprofit," Lawrence said. "It's a huge important role that every business has to have."
At No. 5 on the Jobfox list are software designers and developers. Nurses are in eighth place and higher education faculty is 22nd. Jobfox compiled the list by analyzing a random sample of more than 4,000 job listings from 2,000 employers over a 120-day period ending Oct. 28.
Loy, the venture capitalist, sees growth for tech companies that help other firms cut back on staffing and energy costs.
One of the companies that his Flywheel Ventures is funding, for example, called Tred Displays, has developed display signs that use much less power and require less maintenance than standard LED signs.
"Other companies are in the race to save costs, and something like Tred can help do that," Loy said. "Most of the doom and gloom is for the projects themselves. Companies that are helping those projects reduce costs are fine."
President-elect Barack Obama's championing of alternative energy also bodes well for firms researching and developing such innovations, even if the results take years to hit the market, said Emily Mendell, the vice president of strategic affairs for the National Venture Capital Association.
Burtless, of Brookings, said that a broader recovery likely wouldn't happen until spring at the earliest. In the meantime, even those industries that so far have been spared massive job losses could take a hit.
"Things can turn very fast," Burtless said. "A lot of people who might have held a pretty good job in the financial services industry in April are now unemployed."
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