Technology Alliance Announces Findings of Latest Study Benchmarking Washington's Competitiveness Among High Tech States
Data indicates Washington is strong in entrepreneurship and innovative workforce; state is also competitive in most categories of research, but underperforming in education
SEATTLE, WA – May 1, 2009 — The Technology Alliance (TA) today announced findings from its latest study benchmarking Washington State's competitiveness in selected indicators of a successful innovation economy. The study compared Washington's performance to that of nine other technology-intensive states, examining metrics relating to educational attainment, workforce, research capacity and entrepreneurial climate. The states selected as peers for comparison with Washington were California, Colorado, Connecticut, Maryland, Massachusetts, New Jersey, New York, Utah, and Virginia. Study highlights were shared by TA Chair Jeremy Jaech during the organization's annual State of Technology Luncheon in downtown Seattle.
One key indicator of competitiveness is the intensity of the science and engineering workforce compared to overall employment. Washington excels in this category, ranking 4th among the peers and in the nation. In engineering, specifically, Washington climbed rapidly in the standings in the span of six years: it moved up from 9th to 3rd place nationally and is currently second only to Massachusetts among the peers in this metric.
"We have been a magnet for top talent because of the world class companies present here today," observed Jaech. "Of all the indicators, this one truly shows our state's competitive strength."
The same can not be said for K-12 math or reading achievement or high school graduation rates, where Washington ranks in the bottom third of peer states. In higher education, Washington is 36th in the nation in overall bachelor's degree production, calculated as a percentage of the state's 18-24 year old population. Washington is 8th among its peers in this metric, and 7th in science and engineering bachelor's production.
Said Jaech, "I know we faced a tough budget year and higher education took its share of the hit. But a few years ago, our state made degree production in fields that are essential to our future economy a priority; I hope we get back on track because our state needs this, and our students really need this."
Washington fares even worse in graduate education. While the state has high-quality, top-ranked programs, total graduate education in science and engineering is relatively small for the size of the state compared to other high tech states and, in fact, the rest of the nation. Washington is 46th out of 50 states on a per capita basis in graduate enrollment in science and engineering and last among the peers in PhDs awarded in science and engineering. This limits opportunity for Washington residents, but it also has a sizeable economic impact, as it is people with this profile who typically start and grow high tech companies.
"Creating more opportunity in our science and engineering graduate schools, particularly with an entrepreneurial faculty to encourage students, would do more to strengthen Washington's competitiveness long-term than almost anything else," said Jaech.
The effect of Washington's relatively small graduate education enterprise shows up in the amount of academic research performed in Washington compared to its peers. In expenditures on academic research, Massachusetts, with both Harvard and MIT, has the most academic research per capita. Washingtonians often note with pride the enormous research powerhouse that is University of Washington, but for its population size, Washington is actually 8th out of 10 peer states and 25th in the country in this metric.
"Because we do not have a private research university in this state it makes it even more critical for us to support UW and WSU," commented Jaech.
In other areas of research Washington compares more favorably. On a per capita basis, the state is among the top five in the nation, and at or near the top of its peer group, in federal laboratory research, largely due to the Pacific Northwest National Laboratory operated by Battelle; in research conducted by non-profit institutions, owing to the activities of organizations such as the Fred Hutchinson Cancer Research Center and others; and in industry research and development. In terms of scale, industry R&D dwarfs the other categories; companies like Microsoft, Boeing, Amgen, Amazon, Google and a host of others invest a combined $10 billion annually in R&D activities in Washington.
Another bright spot for Washington is its level of venture capital investment. Although California and Massachusetts consistently capture the majority of venture capital in the U.S. - together, these two accounted for more than 60% of total VC investment in 2008 - Washington stacks up well against the rest of the high tech states. Last year, it ranked 4th among peers, just behind New York, with 3.4%. When calculated per $1,000 of state gross domestic product, Washington came in 3rd in the nation, based on 2006 data, after California and Massachusetts.
"That 3.4% statistic may seem like a small number," said Jaech, "but it translated into nearly a billion dollars invested in Washington companies in 2008 and puts us 5th out of 50 states."
Venture capital investment may be declining nationally, but the level of angel investment through the TA's Alliance of Angels program indicates continuing support for innovative young companies in the state. Alliance of Angels members invested approximately $6.4 million in 36 early stage companies last year, the second-highest yearly total in the program's 11-year history. AoA investors also counted five successful exits last year, through the acquisitions of CleverSet, Insitu, Shelfari, SNAPin, and The Coffee Equipment Company. This is the highest number of successful exits of all the members of the Angel Capital Association, the national association of angel organizations. All five acquiring companies retained operations and staff in Washington.
"Washington definitely has a green light when it comes to three essential ingredients: our highly talented workforce, our active and robust investor community, and strong research at our federal and private institutions and our innovative companies," Jaech concluded. "These strengths keep us in the top tier, and we hope they can sustain us while we as a state address those areas where we need to make improvements to compete in the future innovation economy."
Contact
- Kristin Osborne
- (206) 389-7320