Technology Alliance Tallies Up Economic Impact of Washington’s Tech Industry

7/1/08Follow @gthuang

We’re Number Four. That is, in terms of concentration of technology-based employment and R&D activity in the state, Washington ranks fourth in the nation (after Massachusetts, New Jersey, and Virginia), largely on the strength of its aerospace and software publishing industries. The concentration is defined as the number of jobs in a given sector relative to all jobs.

This stat, and many others, come courtesy of the Technology Alliance, a statewide organization of tech and business leaders based in Seattle. Yesterday the organization released the final version of its 51-page “economic impact” report—its first since 2005 and fifth overall documenting the impact of the tech industry on the state’s economy. The report was prepared by William Beyers of the Department of Geography at the University of Washington.

Before we get to the rest of the stats, I found it interesting how the survey defined the “tech industry” in the first place. For a sector to be considered high-tech, at least 14.6 percent of its workforce had to be engaged in R&D occupations—double the percentage for the state’s overall workforce.

This seems arbitrary to me (though well-defined), and it raises the question of what “tech” even means anymore. It’s getting harder to draw the line, as almost every business uses technologies such as computers and the Internet to develop or push its products. But the survey’s focus on R&D speaks to the importance of driving the next generation of technologies, and the criterion leads to such familiar tech sectors as the following (with Washington-state workforce size in 2007):

—Aerospace (78,667 employees)
—Software publishing and computer systems design (75,638)
—Business services (82,519)
—Computer and electrical equipment manufacturing (26,862)
—Internet publishers, service providers, and wireless (19,128)
—Scientific R&D (18,765)

A few more highlights, based on the 2007 stats:

—There were a total of 343,371 tech jobs, representing 11.8 percent of all employment in the state.

—The income, measured in salary and benefits, per job in technology industries averaged $117,691, as compared to the state average of $54,097.

—The tech industry generated $112.6 billion in sales, and 80 percent of those sales came from out of state (versus 40 percent of sales from all businesses).

—Taking into account “indirect impacts,” such as the purchases of goods and services related to the industry, the tech sector helped support some 40 percent of all jobs in the state.

—In terms of “technology-intensive” industries, defined as those in which more than 30 percent of employment is in R&D (e.g., aerospace and software here), Washington ranked second in the nation after Virginia. Just goes to show how arbitrary rankings can be.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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