1. The Economic Impact of Technology-Based Industries in Washington State - 2007
William B. Beyers
Department of Geography
University of Washington
Seattle, WA 98195
May 2008

2. Overview I. Introduction II. Defining Technology Base Industry
and R&D in the Washington economy
III. Trends in Washington Technology- based Industry and a U.S. comparison
IV. Economic impacts
V. Concluding Comments

3. I. Introduction
This is the 5th estimate of technology-based industry prepared for the Technology Alliance (Prior studies published in 1997, 1998, 2001, and 2005)
We have attempted to have them be consistent in their scope and methodology
This has been complicated by changes in how economic activity is measured in the U.S., what industries have been deemed technology-based, and due to changes in the economic impact models

4. II. Defining Technology-Based Industry
Many definitions of “high tech”
Some are based on % of sales related to R&D, some based on arbitrary definitions of industries included, some based on % of R&D related occupations
Prior Technology Alliance studies defined technology-based industries as those with at least 10% of their workforce in R&D related occupations
The current study raises this share to 14.6%, which is double the average for the Washington economy of those employed in R&D related occupations.
This decision leads to some changes in industries included in the study, but other factors also lead to changes to industry inclusion (shift to NAICS, occupational structural change)

5. R&D Related Jobs are very important in technology-based industry
Source: WA State
Employment
Security
Department

6. Technology-Based Industries in Current Study

7. Examples of R&D Intensive Occupations in SOC 15, 17, and 19

8. Washington R&D by Users of Funds
Source: NSF 2007

9. III. Employment and Trends in Technology Based Industry In WA & Other States
Data for 2007
Data for 2007

10. History of Technology-Based Employment in Washington State

11. Concentration of Technology-Based Employment in Washington State
Nonemployer = 11.2% of County Business Patterns Employment

12. Location Quotients – Technology Based Employment
1.35
1.06
1.21
1.18
1.39
1.01
1.08
Washington ranks 4th

13. Location Quotients – Less Aerospace
1.17
1.48
1.09
1.33
1.19
1.18
1.43
1.00
1.07
Washington ranks 10th

14. Location Quotients – Very High Tech
1.96
1.65
1.07
1.70
1.44
1.35
2.07
0.93
1.06
Washington ranks 2nd

15. Direct County Employment in Technology-Based Industry
45,265
203,664
12,602
12,337
13,026
10,189
10,109

16. IV. Economic Impact Analysis

17. Total Direct and Indirect Employment Impacts
1,163,423
Services
820,052
Indirect
Other
Industries
343,371
Trade
Mfg. + =
High
Tech
Direct

18. Direct & Total Impacts Modest Change Why this downturn in
2004
1.77
3.80
1.9
Why this
downturn in
The employment
multipliers?

19. Employment Multipliers
State Average

20. Output Multipliers – Technology Based Industries
3 on diagonal
3 higher in 2002
6 lower in 2002

21. Labor Income Per Job

22. Tech-Based
industry
is strongly
export oriented,
and tends to
have slightly
lower local
linkages than
all Washington

23. Shifts in the State Economy
Washington State has a rich history of input-output models based on survey data
No other state in the U.S. this data base
Here is one slide that depicts structural change from the legacy of these models – here the changing composition of output
Technology-based industry has become more important over this history
More information on these trends will be available from OFM in the coming months

25. Concluding Comments
Technology based industry continues to drive the Washington economy
The nature of activity has changed over time; this is a dynamic part of our economy
There has been a clear shift from tech-based manufacturing to tech-based services over time, and this reflects the larger shift of the economy towards services
Technology-based sectors are strongly oriented to markets outside Washington State, contributing to our economic base.
Their contribution is rooted in high levels of R&D activity and the concentration of R&D-related employment
Thanks to the Technology Alliance for asking me to re-estimate these impacts