New Technology Alliance Report Measures Growing Impact of Technology-based Industries on the Washington State Economy
Technology sector supports 40% of total jobs; state ranks 2nd nationally in concentration of employment in industries with intensive focus on research and development
SEATTLE – June 30, 2008 — The Technology Alliance today released its latest comprehensive report examining the vital economic contributions of Washington’s technology-based industries and comparing Washington’s concentration of technology employment to the rest of the nation. “The Economic Impact of Technology-Based Industries in Washington State” documents the growing importance of our state’s innovative companies and institutions, which together support 40% of total jobs in Washington.
In 2007, technology-based industries employed 343,371 people in Washington, directly accounting for 11.8% of total covered employment. On a per capita basis, Washington’s concentration of technology-based employment is the fourth highest in the nation. Through multiplier effects, Washington’s technology sector supported more than 1.16 million jobs, or 40% of total employment, last year.
Technology-based industries pay an average of $117,691 in salary and benefits per worker – 117% above the state average. They also export 80% of their sales out-of-state, compared to a state average for all industries of 40%. Washington’s technology-based industries generated a total of $112.6 billion in sales, $29.5 billion in labor income, and more than $1 billion in state business and occupation tax revenues last year. Cumulative direct and indirect impacts of the state’s technology-based industries amounted to $205.3 billion in sales, $71.4 billion in labor income, and $5.7 billion in combined business and occupation and sales tax revenues across the Washington state economy.
Previous economic impact reports produced by the Technology Alliance defined technology-based industries as those with at least 10% of employees engaged in research and development (R&D) occupations. Because industries across the economy are increasingly relying on technology to remain competitive, leading a greater number and variety to meet the 10% threshold, the Technology Alliance revised its definition to differentiate those that drive the creation of new scientific knowledge and technological innovation. Within the industries covered in the latest study, at least 14.6% of the workforce is engaged in R&D occupations, equivalent to twice the state average for all industries.
Aerospace, with more than 78,000 employees, accounts for the largest share of technology-based employment, followed by software publishers with an estimated 47,000 employees. Other key Washington industries covered by the study include computer and electrical equipment manufacturing, scientific research and development, architecture and engineering services, remediation and waste services, and wireless telecommunications.
Washington’s technology-based economy has become more diverse with the rapid expansion of industries outside of the state’s historically strong aerospace sector. While aerospace remains a significant contributor to Washington’s economy, its share of private sector technology-based employment has gone from more than half in 1974 to 23% in 2007. This shift coincides with significant growth in software and other computer services industries during the same period.
The study also examined employment in technology-intensive industries, defined as having 30% or more of employment in R&D. Washington has one of the most technology-intensive economies in the nation, ranking 2nd only to Virginia. Technology-intensive industries in Washington include software publishing (70% of employees engaged in R&D); computer systems design (69%); Internet publishing (45%); and aerospace (37%).
“High tech industries continue to exhibit strong growth relative to other sectors and create prosperity for our state in a competitive global economy,” observed Technology Alliance chair Marty Smith, managing director at MetaJure, Inc.
“Our study clearly illustrates the importance of Washington’s technology sector to our state economy as a whole, and serves as a compelling reminder of why it is essential that we make smart investments in education and research and support the growth of innovative companies in our state.”
The report, which was prepared by William B. Beyers of the University of Washington, is the fifth produced by the Technology Alliance. Previous economic impact reports were issued in 1997, 1998, 2001, and 2005.