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.

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The tech scene here is on the move. In comparison to other U.S. cities, Seattle has had the largest growth in tech jobs, and has moved up to #9 (from #10) in total number of tech workers. By comparison, Boston ranks #6 in number of jobs gained and #4 in total tech employment.

That’s all according to the American Electronics Association’s “Cybercities 2008″ report that compiled stats from 60 cities. The AEA rankings were based on labor stats from 2006, the most recent data available, and were not normalized to population. In terms of raw number of tech workers, the top five metro areas were New York, Washington DC, San Jose/Silicon Valley, Boston, and Dallas-Fort Worth.

In 2006, the Seattle area had a net gain of 7,800 tech jobs, a 7 percent increase over 2005, for a total of 127,700 jobs. The average wage for those jobs was $96,200 (#5 nationally, compared to $95,100 for Boston—no slouch itself). Seattle ranked first in software publishing (thanks largely to Microsoft) with 42,600 jobs, ninth in telecom with 18,800 jobs, and ninth in manufacturing of measurement and control instruments with 6,400 jobs. The area had a total of 4,900 high-tech establishments—as compared to 8,200 in Boston—according to the survey.

Some (including me) have questioned whether the 2006 growth stats are still relevant in 2008. The experts I’ve talked to say the answer is definitely yes—at least for the Seattle area. “My sense is there has not been a slowdown,” says Seattle-area Web entrepreneur and Xconomist Andy Sack. “I saw the article on the #1 fastest growing… and my thought was, well that explains why recruiting has been and continues to be so difficult.”

A word of caution, though—echoing University of Washington computer scientist Ed Lazowska’s Xconomist post from yesterday. “Future growth depends on our ability to make high-tech careers attractive to our children,” said J. D. Hammerly, a vice president at Battelle Seattle Research Center, in an AEA press release. “We need to spark more excitement and enthusiasm for technology, sciences, and math. These skills are critical to prepare young students for an increasingly technical world, providing them with the foundation to become highly paid tech workers.”

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