Technology Alliance Releases Findings of Latest Study Measuring the Impact of Innovation Employment on the Washington Economy
Technology employment tops 434,000; innovative industries support a total of 1.4 million jobs
SEATTLE, WA – May 22, 2012 — The Technology Alliance today announced the results of its latest economic impact study, measuring the contributions of Washington’s technology-based sectors to the overall state economy through employment, wages, exports, and tax revenues. Technology Alliance Chair Jeremy Jaech shared highlights with 700 business and community leaders during the organization’s annual State of Technology Luncheon in downtown Seattle.
Using employment data from the first half of 2011, the Technology Alliance found that 396,818 people are directly employed by Washington’s innovative companies and institutions – 15,272 more jobs than reported in its last study released in 2010. For the first time, the Technology Alliance also counted self-employment in industries covered by the study, putting the total number of technology-based jobs in the state at 434,343 – equivalent to 13.6% of total state employment – with a combined payroll of more than $41 billion.
“This report is the seventh study we have conducted since 1997 on the magnitude of employment, business activity, and income related to Washington’s technology-based industries,” noted Technology Alliance Executive Director Susannah Malarkey. “While not surprising considering all the recent headlines about tech jobs, it is very heartening to see the continued growth and economic impact of tech-based industries across our state.”
Technology-based jobs generated over one million jobs in other sectors, meaning technology-based industries supported a total of 1.4 million jobs and nearly $86 billion in payroll throughout Washington’s economy last year. This represents 45% of total state employment.
“Aside from the sheer size of the technology work force, which continues to grow, the impact on the rest of our economy is growing, too,” observed Technology Alliance Chair Jeremy Jaech. “Technology-based industries outperform other sectors when it comes to job creation, compensation, and exports.”
Among the major findings of the study:
- Wages and benefits in technology-based industries average $94,531 per job, compared to $49,829 for all other industries. The high level of compensation in technology-based industries is a significant factor in their multiplier effect on other parts of the economy.
- Technology-based industries generated $231 billion in sales last year. Seventy-six percent of sales by technology-based industries are outside of the state, compared to 27% for all other industries.
- Technology-based industries directly generated $770 million in business and occupation taxes; the total state and local revenue impact of technology-based economic activity, after factoring in multiplier effects such as sales taxes generated by employee spending, exceeds $6 billion.
Aerospace is the single-largest technology-based industry, with 84,831 jobs. The combined computer services industries, which encompasses software publishing, data processing, computer systems design and other information services, employed 98,280 people in direct-hire positions – an increase of 815% since 1988.*
“Innovation drives our economy, there is no doubt about that,” concluded Malarkey. “We are truly fortunate to have such a diverse base of robust, technology-based industries here in Washington.”
While calling the study results a “good-news story,” Jaech advised the luncheon audience that Washington will have to shore up its competitiveness if it to continue to be a center of innovation employment.
“We’re going to have to engineer our own future. And I mean that literally – we need engineers, and lots of them,” he said.
“As the competition for talent heats up and goes global, we’re going to have to be both smart and scrappy if we want to be the preferred place to innovate.”
About the Economic Impact Study:
The analysis was conducted for the Technology Alliance by William B. Beyers, Professor Emeritus at University of Washington. The study defines technology-based industries as those industries in the North American Industry Classification System (NAICS) that have at least 16.2% of their workforce in research and development occupations, as defined by the Federal Bureau of Labor Statistics. This threshold is twice the state average for all industries. Two industries that did not meet the minimum employment threshold for 2011 were included in the study: electronic shopping, and waste treatment & remediation. These industries also were included in the Technology Alliance’s 2010 study.