New Hampshire High Technology: The Future is Now

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New Hampshire High Technology The Future is Now

• NetworkNH
• April 2005

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High Tech NH What we will cover.

• Recent trends with comparisons to other states
  with significant technology concentrations and US
  averages
• Why we should care about high technology
  employment and industries in NH
• Vulnerabilities
• Opportunities
• Areas to focus efforts looking forward

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High Tech in NH Summary Points

• Decline in high technology employment commenced
  in December 2000 in NH and other technology
  states
• The decline in percentage terms was more
  pronounced in NH than other states
• The decline was concentrated in contract and
  commodity-like non-defense related manufacturing
• NH has dropped in rank in high technology
  employment concentration from 1st in mid-1990s to
  3rd in 1998 to 10th among 50 states (American
  Electronics Association)
• Continued strong employment base in
  defense-related high tech industries, in
  particular control and measurement
  instrumentation manufacturing, and high tech
  services
• Technology employment recovery starting in Oct
  2003 has been stronger in NH than most other
  states
• NH has resilient high technology economythe
  future is bright if vulnerabilities are addressed
  and opportunities captured

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High tech decline in NH (in green) and other
states began in Dec 2000. Recovery started Apr
2003 (VA MD), Oct 2003 in NH and Feb 2004 (MA).
NH had greatest percentage decline but has
greatest upturn since Oct 2003
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High Technology Employment Boom, Bust and
Recovery After boom in NH in mid to late-1990s
(15), then sharpest decline (-36), New
Hampshire (9.2) has experienced strongest
recovery in total technology employment. Other
high tech states are experiencing much more
modest percentage gains in high tech employment
with the two leading tech (concentration) states
Mass. and Colorado lagging US recovery
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High technology resiliency (employment change
2003-2004) NH compared to other high tech and
New England States
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Low- and High-lights of High Tech Employment
Change New Hampshire 2000-2004

• Decline in high technology manufacturing without
  recovery of lost jobs
• Semiconductors
• Printed Circuit Boards
• Pronounced retrenchment in some sectors of high
  technology services in the tech bust of early
  2000s
• Wired Tele-Communications Carriers
• Data Processing / Warehousing
• Tele-Communications Resellers
• Software Publishing
• Stable Base of Defense-Related Industry.
  Employment helped state significantly during
  recession and recovery
• Search and detection instrument manufacturing
• One-fifth of all tech jobs now in this one
  defense-related sector
• Without this industry tech employment would have
  declined more than 40 percent
• Resilience in some high technology service
  industries with recovery in last year
• Engineering Services
• Computer Programming
• Computer System Design
• RD Physical, Engineering and Life Sciences

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High tech manufacturing has not experienced a
recovery in US or any technology state New
Hampshires growth rate of 7.5 is after a nearly
50 decline yet return to growth in
manufacturing is noteworthy compared to continued
decline in other tech states
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Concentration in manufacturing within high
technology in NH compared to US average
contributed to pronounced decline, 2/3rds in NH
compared to 1/3rd US average in late 1990s. Now
down to below 60 percent of high technology
employment
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High technology services are recovering in many
technology based statesNew Hampshire (7.4) and
Virginia (9.0) both have growing engineering
service and custom computer programming
employment bases
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New Hampshire Detailed High Technology Sectors
Sectors of Growth and Decline. In NH Jan. 2000
to June 2004 Oct 2003 to June 2004 With growth
in blue, in decline in red, purple with potential
to grow
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Why should we promote high technology industries
in New Hampshire?

• States on the leading edge of technological
  innovation have the highest per capita income in
  the nation.
• High Tech jobs pay 75 higher wages than other
  industries.
• 1/3rd of NH Gross State Product directly or
  indirectly tied to high technology.
• High technology industries are the engine of
  growth. It is the key sector in the research and
  development (RD), innovation and new product
  development base of the states economy

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High positive correlation between high tech
employment concentration and per capita income
across the 50 US states. NH in the elite group
of high tech and high income states
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RD Building on the base..the role of high
technology defense-related industries

• We estimate that high technology DoD contractors
  in the state -- through direct and in-direct
  (through the DoD) RD investments in the state --
  account for greater than one-third of the total
  private sector RD investment in the state.
• Without the defense industry, New Hampshire would
  drop to well below the median in total RD
  spending per capita and the states ability to
  compete and grow in high technology would suffer
  significantly.
• Close to 50 percent of all federal RD funding
  and 90 percent of all federal RD funding of
  industry in New Hampshire is from the DoD.

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Yet, NH (in green) below US average and all New
England states and experiencing a decline in DoD
s in contracts per worker.. (even with BAE
Systems as a constant)
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New Hampshire High Technology The Future is Now

• Building on strengths addressing weaknesses.

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New Hampshire can leverage specific strengths to
sustain a high tech economy
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The Education Advantage Educational Attainment
and High Technology Employment Concentration
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Milken Technology and Science Indicators for
NHThe Main Strengths
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Milken Institute Overall Technology and Science
Index Rank NH ranks 12th ..but behind 3 other New
England states.. and competitor states, e.g.,
Rhode Island, New Mexico and Oregon, catching up
fast.
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Weaknesses
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Largest decline 02-04 in Milken ranks
Vulnerabilities
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Comparing 50 state rankingsNH compared to high
tech states that rank higher in concentration.
Committee for Economic Development (CfED), 2004.
The gaps in rank NH lags on labor pool with
advanced technical education, new companies, Fed
RD, and technology spin-outs. Does well in
general education and technology orientation of
the population .
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Network NH Looking Forward

• Working collaboratively with other groups across
  the state

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New Hampshire High Technology The Future is Now
Key Policy Areas

• Technology Workforce Development with a focus on
  science and engineering education, strengthening
  links between high tech businesses and higher
  education, and creating an internship network
• Address gaps in Financing private angel networks
  and the Archimedes Fund
• Enhance investment in Research Development
  stimulating private investment in the state with
  RD tax credit (HB 466) and National Science
  Foundations Experimental Program to Stimulate
  Competitive Research (EPSCoR)
• Leveraging and growing Defense and Homeland
  Security related industries foster commercial
  spin-offs with increased contracts and
  collaborations among businesses and with
  congressional representatives and state
  government.. Help NH arrest decline in DoD
  contracts relative to US average and rise to and
  above US ave. on DoD contract s per worker and
  as percent of GSP
• Promoting and Branding the State as a destination
  for high technology industries, skilled workers
  and entrepreneurs. Highlight quality of life,
  business climate and economic resiliency