Jobs for Non-Natives: Washington Tech Economy Fueled by “Imports”

5/30/13Follow @bromano

[Updated 6/6/13, 3:05 p.m. See below.] Despite chronic underinvestment in education, Washington state’s innovation sector has held its own or even gained ground over the last decade—something business leaders did not predict.

“When we started benchmarking in 2003, we felt sure that our state would not be able to sustain and grow our innovation economy if we didn’t fix our issues with our education system,” said Cheryl Vedoe, chair of the Technology Alliance, at the state trade group’s annual lunch in downtown Seattle Wednesday. “Well, it seems clear we were wrong about that. Ten years later, we have the data that shows that Washington’s high-tech industries continue to grow and thrive.”

Vedoe, who is no idle observer of education as chief executive of digital curriculum provider Apex Learning, presented the latest Technology Alliance report on Washington’s innovation economy. It’s an excellent report and well worth reading in its entirety, and some highlights. [Link added to full report.]

According to the report, using most-recent data from sources including the National Science Foundation, Census Bureau, and National Center for Education Statistics, Washington ranks:

  • 49th in total higher education spending per student in 2012 ($8,215)
  • 37th in bachelor’s degrees per capita; 44th in master’s degrees; and 35th in science and engineering PhDs
  • 46th in the percentage of high school students who enroll directly in college (48.3 percent of those who graduate on time, as depicted in the image above, clipped from Vedoe’s presentation. Note that 77 percent of high school freshmen graduate in four years.)
  • 30th in kindergarten through 12th grade spending per student ($9,497)

(In each of these measures—except for K-12 spending—Washington is at or near the bottom of a group of 12 peer states that compete for innovation funding, talent, and infrastructure.)

Nevertheless, Washington innovation is thriving by several measures. The state ranks:

  • No. 1 in per-capita federal research and development centers; No. 2 in nonprofit R&D; and No. 3 in industrial R&D. [Updated to clarify ranking is for per-capital federal R&D centers, such as Pacific Northwest National Laboratory, rather than federal spending.]
  • No. 4 in 2012 venture capital investment ($932 million)
  • No. 5 in scientists and engineers per 100,000 workers (5,833)
  • No. 5 in per-capita patent activity (70 per 100,000 people)

How does Washington reconcile the tech sector’s continued success with the paltry investment in generating talent, the key input to innovation economies?

Imports.

It’s no secret that Washington has been a leader in attracting smart, entrepreneurial people for generations, from Boeing to Bezos to Barton. It consistently ranks among the top states for in-migration of people with college degrees.

Anecdotal support abounds. In an informal poll of the nearly 800 technology executives in the audience Wednesday, a very large chunk—perhaps half the people in the room—identified themselves as “imports.”

Rich Barton, the serial entrepreneur behind Expedia, Zillow, and GlassDoor, said in an on-stage interview at the event that he too is an import.

“I’m an import by Microsoft, which has been a magnet for such incredible talent to this area,” he says. Barton noted later that it also “has something to do with this being an awesome place to live.”

Tableau Software, which went public two weeks ago and represents the state’s latest tech success story, might have been a Silicon Valley company if its founders hadn’t been attracted by the “mountains and salmon and coffee and rain” of Seattle.

Is this such a bad thing?

On the one hand, you could argue that Washington’s innovation economy is clearly benefitting from the investments made in developing talent in other states and nations. But is that sustainable? Is it right?

Vedoe asked the audience at the end of her presentation whether Washington wants to continue relying on imported talent. Her own answer to that question was clear.

“Don’t we want those children who grow up here in Washington—our own citizens—to have a fair shot at the jobs that we’re creating here? … We still believe it is an economic imperative to equip our citizens to participate in the innovation economy.”

So what’s to be done?

While money isn’t necessarily the only solution, Washington is clearly underfunding education relative to its peer states.

“That’s ridiculous. We’re a high-tech state. We’re a wealthy state. I can’t believe that’s going on, and I don’t really understand why,” Barton said.

But when he expressed his support for a state income tax to fund education, and the audience was asked if they agreed, only a few hands went up.

“Many of the people in this room probably send our kids to private school, and that’s part of the problem,” Barton said, acknowledging that his kids are in private school, too, though he himself attended public schools. In Connecticut.

Benjamin Romano is editor of Xconomy Seattle. Email him at bromano [at] xconomy.com. Follow @bromano

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  • Ruth Ann Mullen

    With all the talk of “sustainable” energy and food supplies, a rational person might think that there’d be more appreciation for “sustainable” work forces.

    Instead, we’re still stuck on this idea that people can be moved around at will, like heads of lettuce in a refrigerator truck, pork bellies in the Chicago Mercantile Exchange, or wheat in the global grain markets.

    What journalists are missing here, though, is that systems designed to treat people like commodities are abhorrent.

    For sure, Washington state has some horrible K12 systems that need to be improved. The “average” Washington state school may be as described. But schools are not well-described by averages. STEM workers are usually not your “average” students. Looking for the best-prepared STEM students in the “average” Washington state school is statistically absurd.

    And yet, the absence of well-prepared students from these “average” schools is used as an excuse to give away some of our best academic slots and technical job opportunities to people from all over the world who may not even be as well-prepared as graduates of some of our own state’s top K12 school systems!

    There are some absolutely world-class K12 systems in Washington state. Neither the state’s post-K12 system for these kids nor the employment systems of our state’s tech companies has a pipeline sufficiently wide to accommodate them.

    The media is missing the entire point. The only reason our society is getting away with allowing so many of our schools to deteriorate so badly is that corporate concerns are continually allowed to open a “safety valve” allowing them to import STEM workers.

    Sadly, it’s increasingly clear that our educational system will continue its dysfunctional service of our students from both ends of the preparation spectrum, until such time as the safety valve is closed and corporations are required to hire locally.

    • Snack

      Word.