Professional, Scientific & Technical Services

 

Retailing, wholesaling, health care and accommodation and food services are industries that have a “face”: most people can easily think of one, or many, establishment(s) in each of them, and they're readily identified as a cohesive group of businesses producing similar types of services. The professional, scientific and technical services industry is a little different. It isn't quite as natural to think of a law office, a testing lab, or an engineering firm as different players in one industry, even though they are.

What's included in professional, scientific & technical services?

Just what are these services, anyway? Establishments in the professional, scientific and technical services industry provide a wide range of services that are usually purchased by other firms (but may also be provided to households). This, together with the fact that these services are provided by professionals who have a high degree of training and specialized expertise, is what ties this large and varied group of establishments together into one industry. It includes firms providing the following types of services:

• Legal advice & representation;
• Accounting, bookkeeping & payroll services;
• Building inspections;
• Architectural & engineering services;
• Interior & graphic design;
• Drafting, surveying & mapping;
• Physical, chemical & other analytical testing laboratories;
• Computer services;
• Consulting & research;
• Advertising;
• Photography;
• Translation & interpretation; and
• Veterinary & other services

Many of the services provided by firms in this industry have been around for years (lawyers, for example, have been giving advice to clients for hundreds, if not thousands, of years). Engineers helped build the Canadian Pacific Railway, the promise of which was instrumental in bringing BC into Canada in 1871. Others, such as computer services, are of a more recent vintage.

What kind of work do firms in this industry do?

In this section we'll take a look at some of the characteristics of the major groups within this industry. It's not possible to cover all of them, because we don't have good data for all types of activities, but this should give you a better idea of the sorts of services provided by establishments in this industry.

Architectural, engineering, design & related services is the biggest employer

Some industries in this group have close ties to the goods sector, with construction, manufacturing or mining being among their most important clients. However, their clients also include governments and other industries in the service sector. Others have a more broadly based clientele, including both businesses and households as their customers. Some are highly export-oriented, generating as much as a quarter of their income from foreign clients. The US typically accounts for more than half of the total export earnings of these firms.

Architectural, engineering, design & related

Architectural services involve planning and designing buildings and structures. In BC, the industry earned revenues of $340 million in 2004. About a quarter of these earnings were from residential building projects, while 64% was derived from non-residential projects such as hospitals, educational institutions, retail buildings, restaurants, hotels and office buildings. Businesses (56%) and governments (27%) were the biggest clients, but 9% of revenues came from sales to private individuals or households. The industry is not as export-oriented as some types of professional services, but still received 8% of its income from foreign clients in 2004.

The engineering services industry applies engineering principles to the design, development and use of machines, instruments, materials, structures, systems or processes. This includes providing advice and plans, as well as technical assistance onsite. Engineering establishments in BC worked on many different types of projects and earned revenues totalling $1.6 billion in 2004. The biggest source of revenue was plant and process engineering projects (30%), especially for the petroleum and petrochemical, and pulp and paper industries. Transportation engineering (building highways, roads, bridges, tunnels and so on) generated 12% of earnings, and 10% came from engineering projects for municipal utilities (such as water, irrigation and sewage systems).

Commercial and institutional building projects (11%) were another important source of revenue. Businesses (59%) and governments (26%) were the main client groups, but 2% of revenues came from services to individuals and households. BC firms earned 14% of their revenues from services provided to foreign clients.

Specialized design and landscape architects are mainly involved in graphic and interior design, but the industry also includes industrial, clothing and jewellery design as well as landscape architecture (planning and designing land use for parks, recreational areas, airports, hospitals, residential areas, commercial developments and so on). Industry revenues in BC were $280 million in 2004. We don't have specific data on the client base for BC, but nationally, about 12% of the industry's revenues come from services to households and individuals, 68% from businesses and 11% from governments. Eight percent of the industry's revenues came from foreign clients.

Drafting, building inspections, surveying and mapping activities, and testing laboratories are usually grouped with architectural and engineering services. We don't have data for all of these activities, but revenues from surveying and mapping services were $151 million in 2004.

Computer systems design services include computer programming as well as systems design. Total revenues of BC establishments were $1.8 billion in 2004. The biggest source of revenue was information technology (IT) consulting services, accounting for nearly a quarter (23%) of total earnings. Customization and integration of packaged software (15%), custom application design (10%), computer systems design (10%) and software publishing (10%) were other important sources of revenue. Businesses (43%) and governments and public institutions (32%) were the industry's main client groups. The computer services industry is highly export-oriented. A quarter of total revenues came from foreign clients. The US and Europe have traditionally been the biggest importers of these services (primarily computer systems design) from BC.

BC's accounting & bookkeeping services industry earned $1.1 billion dollars in revenues in 2004. Auditing, accounting and bookkeeping services generated 54% of the revenues, with another 30% coming from tax-related services. Five percent of their earnings came from providing consulting services, and 6% from handling insolvencies and receiverships, with the remainder generated by other types of services.

The management, scientific & technical consulting industry provides advice and assistance to other businesses on various issues, including organizational planning, budgeting, marketing and personnel management. Management consulting is the main activity, but the industry also provides environmental consulting, and other types of scientific and technical consulting services. The industry earned revenues of $872 million in 2003.

BC's advertising industry, which is engaged in creating and placing advertising campaigns in various types of media, took in $1.5 billion in revenues in 2003. Nationally, retail businesses accounted for 21% of total advertising revenues. Other businesses (61%) and governments (11%) were also important sources of revenue. About 7% of revenues came from foreign clients.

What's happened since 1990?

Employment and GDP in professional, scientific and technical services has grown faster than the average for all industries, nearly doubling during the period from 1990 to 2005. The industry's contribution to GDP has increased from just over 3% to 4%. Its share of total employment has risen from 6% to nearly 8%. Of the seven major groups within this industry only two recorded slower-than-average job growth during the fifteen year period.

About 8% of BC's workforce is employed in this industry

Employment in computer systems design has quadrupled since 1990

A number of factors have contributed to the job gains in this industry. Many large establishments used to maintain departments that provided legal, accounting, engineering, human resources or other similar services. However, specialized departments are no longer as common as they once were. A growing number of organizations have opted to purchase these services from other firms rather than maintaining staff with specific expertise in these areas.

The computer systems design industry has experienced particularly strong growth, with employment more than quadrupling between 1990 and 2005. One reason for the extremely strong job growth in computer systems design is the computer revolution that took place during the 1990s, when computers moved from being tools used mainly by researchers and some types of businesses to being a standard piece of equipment found in many homes, and most types of businesses. With the widespread adoption of computer technology, and rapid changes in the types of things it can do, came an increased demand for the services of those who could produce or design computer software and systems. This strong growth came to an end when the high-tech bubble burst in 2001, but the industry has begun to pick up speed again.

Computer systems design isn't the only industry that's seen strong growth. The number of people working in management, scientific and technical services has tripled, and other components of the industry have also registered significant employment growth.

What are the most common occupations?

The occupational mix in this industry reflects the technical nature of the services that are offered. Thirty-seven percent or workers are in natural and applied science occupations. These include various types of engineers, architects, computer programmers, software engineers, web designers and developers, and other systems analysts as well as a number of technical workers such as engineering, drafting, user support and systems technicians.

The second-biggest occupational group in this industry is business, finance and administration, accounting for about a third of the jobs. Financial auditors, bookkeepers, legal secretaries, accounting clerks and other business management occupations are the main types of jobs.

More than a third of the jobs are in natural & applied science occupations

Eleven percent of the jobs are in social sciences and related occupations. Most of these workers are lawyers, paralegals or economic development officers. More than half of the workers in art, culture and related occupations are graphic or interior designers, or photographers.

How many people work in professional, scientific & technical services, and how much do they earn?

Professional, scientific and technical services employed 163,600 British Columbians in 2005. Twenty-seven percent of them worked in architectural, engineering and design services, 20% were employed in computer systems design and 15% in accounting and tax preparation services.

Management, scientific and technical consulting and legal services employed similar numbers (14% each) of the total workforce in the industry, with the remainder working for advertising companies and other professional establishments.

The average hourly wage rate was 26% higher than the all-industry average, at $24.30 in 2005. However, not all workers in the industry are as well paid.

Workers in the computer industry earned the highest wages, averaging $27 an hour in 2005, about a dollar an hour more than in architectural, engineering, design and related services ($26). People who worked in the legal services industry received an average wage of $24 an hour, about the same as the earnings of workers in management, scientific and technical services.

Workers in accounting and tax preparation ($21), advertising ($18) and other professional services ($17) were at the lower end of the pay scale in this industry. It's important to keep in mind that these wage rates represent the average of wages paid to all workers, from the clerical staff to the company director.

Workers spent an average of 38 hours on the job each week, which is longer than the usual work week in the service sector (35 hours) but shorter than the average work week in the goods industries (40 hours).

What are the characteristics of the workforce?

Most (84%) of the people who work in this industry have full-time jobs. Part-time work arrangements are less common than in most other service-sector industries. Twenty-four percent of all workers in the service sector have part-time jobs. In professional, scientific and technical services, just 16% are employed part-time.

Very few workers in this industry have union coverage. At 7% of the workforce, the rate is lower than in any other major industry, and about a fifth of the all-industry average.

Fifty-five percent of the workers are male, compared to 53% for the economy as a whole.

Unemployment rates in this industry are low, averaging 4.3% during the period from 1990 to 2005. The average for all industries was nearly twice as high, at 8.4%, and in the service sector as a whole, the jobless rate averaged 5.1% during this period.

Given the highly technical skills of many of the people who work in this industry, it's possible for an individual to set up shop as an independent consultant or owner-operator of a small business, and self-employment is much more common than in the economy as a whole. Two out of every five workers are self-employed, which is double the average for all industries.

Self-employment rates are high in all industries within this group, but there is quite a bit of variation. Rates range from 27% in computer systems design to more than double that (58%) in management, scientific and technical services. About half (51%) of the people working in accounting and tax preparation are their own bosses, as are 45% of those with jobs in advertising and related services. In all three of these industries, the incidence of self-employment is more than double the provincial average.

Self-employment is common in these industries…

Many establishments in this industry are small businesses. Legal, accounting, advertising, engineering or architectural firms are often small operations where one or more professionals work with a small staff of clerical workers or other types of assistants.

Similarly, consulting and computer programming firms don't necessarily require a lot of support staff.

…and establishments tend to be smaller than in other industries

The success of home-based businesses in the computer industry has been well documented in the media. A number of successful computer corporations have grown out of small offices in basements or garages.

Nearly half of the people working in this industry work in offices or labs with fewer than 20 co-workers. Another 31% are employed at establishments with 20-99 workers. However there are also large establishments in the industry: 6% of workers have jobs at establishments with at least 500 employees.

Where are the jobs located?

Many business service establishments are located in the Vancouver area, where their potential clients are most likely to be located. Corporate headquarters are usually found in large population centres such as Vancouver, and professional, scientific and technical service establishments that have a presence there may be more likely to make contact with potential clients who are located in other parts of the province.

Seven out of ten workers are located in the Lower Mainland

In addition, the demand for some specialized services is probably greater in the province's business capital. Firms that are marketing their services around the world may also have more opportunities to connect with foreign clients if they operate in a larger centre.

However, there's also a demand for many types of services in smaller centres, and establishments in this industry are located all over the province.

What's the outlook to 2014?

GDP is expected to grow faster than the average for all industries, while job growth will keep pace with the rest of the economy

During the next few years, employment growth in this industry is expected to continue to keep pace with gains in the economy as a whole. The industry is forecast to employ just over 7% of the workforce by 2014, about the same share as in 2004. However, GDP is forecast to grow faster than in the rest of the economy, and the industry's share of total GDP is expected to rise to 6%.