Washington State’s small communities poised for growth in technology jobs, investment

According to the Washington Technology Center’s 2004 Washington Index of Innovation and Technology, a new trend in our state could spell out big potential for Washington’s smaller communities. Released in April, the Index is an in-depth, comprehensive statistical tool for measuring the economic potential of Washington’s technology industries. The report objectively analyzes 40 statewide and 12 regional measures and groups them into six core indicators: innovation, competitiveness, growth, financial capacity, workforce potential and quality of life.

2004 Index coverWhile much of the 2004 Index reinforces trends from 2003, an interesting shift emerged that could have significant impact on the state’s economic landscape—an outcropping of technology growth in regions throughout the state. Seattle is still a force to be reckoned with, leading the way in many key measures including patents generated, company birth rate, technology employment and wages per capita, and investment potential. However, statistics show that technology job growth and angel investment potential grew significantly in communities outside the largest metropolitan areas—opening these areas up as promising commercial centers for technology companies.

“It’s clear that technology is a leading driver in Washington’s economy,” states Tab Wilkins, Regional & Technical Services director for the Washington Technology Center. “What’s interesting is the emergence of new technology ‘bright spots’ outside what has traditionally been considered hubs for these industries,” Wilkins notes.

Seattle, Spokane, Olympia, Vancouver all saw declines in technology employment for the first time in four years. But Bremerton, Tri-Cities, North Central, Tacoma, Yakima and Bellingham all saw significant increases in job growth in the major technology sectors in the last two years. Bremerton showed the highest percent in change in the state—over 15%—in all three of their top major technology sectors. North Central captured the number two spot, behind Seattle, for greatest angel investment potential, followed by Bellingham and Vancouver.

How did Washington fare overall? A snapshot of the six core indicators shows the following trends:

* Young companies remain the engine of growth for the state’s economy. Technology continues to employ over 12% of the workforce and Washington remains the top-ranked state nationally in new company creation for the third year in a row. Patenting remains strong in diverse technology areas, up 10% from the previous year.

* Washington’s export strength remains a competitive advantage, with the state ranking fourth nationally and first on a per capita basis for total value of exports.

* Technology employment decreased for the first time in four years. Much of this decline is related to the overall economic downturn that hit the country late in 2001 continuing into 2002 and 2003. Technology jobs as a percent of employment overall remained stable and Washington continues to lead the country in tech wages.

* Lingering effects of the recession resulted in decreased financial investment, with our state’s decline following national trends. Capital and venture investment in Washington companies suffers from the general decline in capital markets experienced over the last two years. Washington moved from ninth to tenth for venture investment overall.

* Washington retains a highly educated workforce, critical to the tech industry, ranking 12th for states with residents who have higher education degrees. The state’s four-year institutions granted 4,500 science and technology degrees and Washington ranks number one nationally in percentage of residents with high school diplomas and success on SATs.

* Quality of life that remains high, primarily due to the appeal of the region’s natural resources and cultural environment. Traffic congestion and high home prices in Puget Sound metropolitan areas continue to pose threats to the state’s quality of life indicator. Even with a slight increase from last year, crime rates remain low and relatively stable.

Go to the Index page for the full and abridged versions.
http://www.watechcenter.org/techindex/index.html

© 2004 Washington Technology Center