Drivers for a Successful Technology-Based Economy: Benchmarking Washington's Performance
A Snapshot of the 2006 Report
The technology-based industry in Washington state continues its important role in the growth and development of the state economy. Technology industries, based on innovation in information technology, bio-science, nanotechnology, and other fields, generate new companies with products and services that are gaining domestic and foreign markets, generating many high-wage jobs, and creating significant wealth. These industries have a bright future in Washington if the appropriate conditions are created or improved.
Leaders in states and regions throughout this country recognize the immediate and long-term benefits of having a robust technology sector and the high-paying jobs that go with it. Many states and regions are competing aggressively to create an environment that attracts, nurtures, and keeps technology-based businesses and the people who establish and grow them. Numerous studies have demonstrated that technology-based businesses do well in states with these characteristics:
- education systems that stress math, science, and engineering at all levels, resulting in a strong and technologically sophisticated workforce;
- dynamic research programs yielding commercializable technology ideas; and,
- a history of entrepreneurial activity and the financial capacity to support technology startups.
The complete report provides benchmarks for Washington's performance relative to peer states on more than 40 indicators that fall under three key drivers - Education, Research Capacity, and Entrepreneurial Climate. What follows is a snapshot of a selection of those indicators and a brief assessment of Washington's performance on each of those indicators by means of a letter grade. Please note that letter grades have been assigned to provide a quick visual of Washington's performance on a particular indicator. The complete report provides greater detail for each of the following indicators--and many others--and should be taken into account in order to fully evaluate Washington's performance in each of the three drivers.
EDUCATION: K-12 Education
How well is Washington's K-12 education system getting our children college and work ready?
1. Washington's public high school graduation rate was just 72% in 2002 (ranking 31st nationally), but an improvement from 68% in 2000 (32nd nationally). The top peer* state (Michigan) graduated 78% and the top state in the nation (New Jersey) graduated 89%. GRADE: C-
2. Washington's 8th graders who scored “at or above proficient” in mathematics on the National Assessment of Educational Progress (NAEP) exam was just 36% in 2005, but improved in national rank from 16th in 2003 to 6th in 2005. GRADE: D
3. Washington's 8th graders who scored “at or above proficient” in science on the NAEP exam was just 33% in 2005 and ranked 18th nationally. GRADE: C-
4. The percentage of Washington's 8th graders who reported taking Algebra 1 was just 20% in 2003 (ranking 36th nationally), down from 26% in 1996 (21st nationally). GRADE: F
5. The number of AP exams taken per 1,000 11th and 12th grade students in Washington was 194 in 2005, 24th in the nation and next to last among peer states, but has trended upwards over the past several years. Students in Maryland and Virginia took more than double that of Washington's students. GRADE: D
6. The percentage of AP exams on which Washington's students scored 3 or above was 61.9% in 2005, placing the state 27th nationally and fifth among peers. Washington's percentage was 63% in 2003. GRADE: C-
7. Per-pupil expenditures in Washington's elementary and secondary public schools was only 90% of the national average in 2003 (32nd nationally), down from 93.9% in 1999 (25th nationally). GRADE: F
8. Per-pupil expenditures as a percentage of per capita income was only 21.8%, ranking the state 45th nationally. Washington has the 12th highest personal income per capita in the nation. GRADE: F
EDUCATION: Higher Education
How well is Washington's higher education system producing skilled and knowledgeable workers to meet the needs of our technology-based businesses?
1. In 2003, Washington's higher education institutions granted bachelor’s degrees to 4.13% of 18-24 year old residents. Although the absolute number of bachelor's degrees produced increased, the state ranking fell from 35th to 36th nationally. GRADE: D+
2. Washington's higher education institutions granted bachelor's degrees in an engineering or natural sciences field to 0.68% of 18-24 year old residents in 2003, ranking the state 37th nationally and 7th among peers. The absolute number of degrees granted increased but the state ranking fell from 35th in 2001. GRADE: D
3. In 2004, Washington's universities produced 477 science and engineering doctorates, or 55.52 per 100,000 25-34 year olds, ranking the state 28th nationally, an improvement from 31st in 2003. However, Massachusetts' universities produced 1,481 doctorates, more than triple that of Washington, and Maryland almost double our production. GRADE: D
How well is Washington competing in R&D activity? How well is Washington investing in R&D activity?
1. Washington's federal R&D activity improved in rank from 21st in 1999 to 14th in 2003 (dollars per capita). GRADE: C-
2. Washington's industry R&D activity maintained a strong national ranking at 5th in 2003, slipping slightly from 4th in 1999. GRADE: B+
3. Washington's level of R&D activity in federally funded research and development centers ranked the state first among peers and 4th nationally in 2003, an improvement from 7th nationally in 1999. GRADE: A
4. Washington's academic R&D activity declined in rank slightly from 20th in 1999 to 21st in 2003. GRADE: C+
5. Washington's non-profit R&D activity ranked 5th in the nation and 3rd among peers in 2003. GRADE: B
6. Washington's continued low state funding for university and college R&D dropped the state's rank from 46th in 1999 to 47th in 2003. GRADE: F
7. Washington ranked 11th nationally for the number of patents issued to patent-holders in 2004, an improvement from 15th in 2001. GRADE: C+
How well is Washington doing at attracting the workforce and financial resources necessary to build a competitive high-tech workforce?
1. Washington's share of the U.S. total of venture capital investment increased from 2.7% in 2002 to 3.5% in 2005, placing us 4th among our peers, behind Texas, Massachusetts, and California (the latter two accounting for nearly 60% of all investments). GRADE: B
2. Washington's share of the U.S. total of venture capital investment in biotech increased from 1.3% in 2002 to 3.5% in 2005, placing us 4th among our peers. GRADE: B
3. The number of scientists and engineers per 100,000 workers in Washington improved in rank from 9th nationally in 1999 to 5th in 2003. GRADE: B+
4. The number of computer and information scientists per 100,000 workers improved in rank from 6th nationally in 2001 to 5th in 2003. GRADE: C+
5. The number of life and physical scientists per 100,000 workers in Washington improved from 9th nationally in 2001 to 5th in 2003. GRADE: B+
*Peer states: California, Colorado, Georgia, Maryland, Massachusetts, Michigan, Texas, and Virginia. Selection of peer states is based on a calculation of location quotients (LQ), which are used by regional economists to identify the relative importance of an industry in a region compared to a benchmark region (states' technology-based industry and the nation, in this case). For specific details on the selection of Washington's peer states, please refer to the complete benchmarking report.