Technology Alliance Announces Findings of Latest Study Examining the Economic Impact of Washington’s Technology-based Industries
Technology sector employs more than 343,000 and supports 38% of total jobs in Washington; state ranks 2nd nationally in concentration of employment in industries with intensive focus on research and development
SEATTLE – May 9, 2008 — The Technology Alliance today released the results of a new study of the size and impact of technology-based industries in Washington State. Chair Marty Smith shared highlights with the more than 800 participants in the organization’s 2008 State of Technology Luncheon in downtown Seattle.
The study was conducted by William B. Beyers of the University of Washington and is the fifth such study produced by the Technology Alliance measuring the contributions of the technology sector to the statewide economy and the strength of technology-based employment in Washington compared to that of other states.
In 2007, technology-based industries employed 343,371 people in Washington, or 11.8% of total covered employment in the state. Through multiplier effects, the sector created an additional 759,712 jobs, thereby supporting in excess of 1.1 million jobs in the state. This is approximately 38% of total Washington employment. With an average salary of $117,691 – 117% above the state average – and 77% of sales out of state, Washington’s technology-based industries represent the largest share of employment, business activity and labor income of any major sector.
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. When analyzing the data for the current report, the Technology Alliance discovered that a large number of industries now meet the 10% threshold, demonstrating the extent to which industries across the economy have increased their reliance on technology to remain competitive. In order to differentiate those industries that are primarily driven by research and development (R&D), the Technology Alliance revised its definition of technology-based industry to 14.6% of employees engaged in R&D, or twice the state average for all industries. Under the new definition Washington ranks 4th in the nation for its concentration of technology-based employment.
“It was time to raise the bar in identifying those industries that truly define our technology-based economy with a significant portion of employment in R&D occupations,” noted Smith.
“Since almost every industry is using technology to be more competitive, we wanted to understand the impact of those industries that create new scientific knowledge and technological innovation, not those who simply use it to get their work done more productively.”
The study also examined employment in technology-intensive industries, which are those having 30% or more of their workforce engaged in R&D occupations. Washington has one of the most technology-intensive economies in the nation, ranking 2nd only to Virginia for its concentration of employment in such industries. In Washington, industries meeting the criterion for classification as technology-intensive include software publishing, with approximately 70% of employees engaged in R&D; computer systems design, with 69%; Internet publishing, with 45%; and aerospace, with 37%.
Looking at the changing complexion of Washington’s technology-based employment over time, the Technology Alliance observed a shift from manufacturing to services-based employment since the release of its first economic impact report more than a decade ago. The latter category, which includes industries that produce intellectual property-based goods such as software, now accounts for 68% of Washington’s technology-based employment, compared to 39% in 1995.
Washington’s technology-based economy has also become more diverse with the rapid expansion of industries outside of the state’s historically strong aerospace sector. While aerospace manufacturing remains a significant contributor to Washington’s economy, other industries have increased their share of total technology-based employment. In 1974, aerospace accounted for over half of private-sector technology employment in the state; today, its share is less than one quarter, coinciding with significant growth in software and other computer services industries.
“High tech industries continue to exhibit strong growth relative to other sectors and create prosperity for our state in a competitive global economy,” Smith concluded.
“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.”
For hard copy of the brochure highlighting key findings of the study, contact Kristin Osborne at kristino@technology-alliance.com or (206) 389-7320.