The Changing Nature of Technology-Based Industry in Washington State: Perspectives from 7 Technology Alliance Sponsored Studies

1
The Changing Nature of Technology-Based Industry
in Washington State Perspectives from 7
Technology Alliance Sponsored Studies

• William B. Beyers
• Department of Geography
• University of Washington
• Seattle, WA 98195
• beyers_at_uw.edu
• Seattle Economists Club June 13, 2012

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Outline

• Defining Technology-Based Industry
• The Changing Nature of RD WA vs. Other States
• Current Employment
• Trends in Employment
• The Changing Geography of Tech-Based Industry
• Changes in Economic Impacts

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The Technology Alliance Technology-Based Industry
Economic Impact Studies

• Studies have been benchmarked against the years
  1995, 1997, 2000, 2003, 2007, 2009, and 2011
• They have tried to use a consistent methodology
• Changes in underlying data sources have made this
  difficult
• We are unaware of any similar legacy of studies
  of this type

4
Defining Technology-Based Industry

• Many definitions of high tech
• Some are based on of sales related to RD, some
  based on arbitrary definitions of industries
  included, some based on of RD related
  occupations
• Early Technology Alliance economic impact studies
  defined technology-based industries as those with
  at least 10 of their workforce in RD related
  occupations
• Starting in 2008, we defined tech-based industry
  as those with double the state average in RD
  employment for all industries. In the current
  study, that threshold is 16.2 (up from 15.6 in
  2010).
• This definition 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)
• After careful inspection of occupational
  structure, we included two industries with less
  than 16.2 RD related occupations (electronic
  shopping waste treatment/disposal)

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RD Related Jobs are very important in
technology-based industry
Source Calculated From Washington State
Employment Security Department 2010
industry-x-occupation matrix
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Technology-Based Industries in 2011 Study
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Examples of RD Intensive Occupationsin SOC 15,
17, and 19
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Washington RD by Users of Funds
Source NSF 2012 D data not disclosed NA
data not available for this year Indexed ranks
are against Gross State Product, which controls
size of state economies
9
1995 Study Employment Mix
10
1997 Study Employment Mix
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2000 Study Employment Mix
12
Employment Mix 2003 After the shift from SIC to
NAICS
13
Employment Mix 2007
14
Employment Mix 2009
15
Employment Mix - 2011
Manufacturing 28
Data for 2011
Total 434,343
Services 72
Includes Self-Employed for the first time
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Changing Mix of Technology-Based Industry
Employment
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History of Technology-Based Employment in
Washington State
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(No Transcript)
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Boeing Employment Fluctuations
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Boeings Long-Run Trend towards Outsourcing
Regional Purchases are about 7 of total, mostly
services Source Washington State Input-Output
Tables
21
Concentration of Technology-Based Employment in
Washington State
Nonemployer 9.4 of County Business Patterns
Employment
22
Location Quotients - 1993
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Location Quotients All Hi Tech 2009
1.465
1.16
1.20
1.27
0.90
1.12
1.41
1.06
1.19
1.12
1.10
1.468
1.17
Washington Ranks 2nd. - Peer States Black/White
Numbers Other High Location Quotients - Red
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1993 Location Quotients Less Aerospace
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Location Quotients Less Aerospace
1.31
1.19
1.24
1.31
0.93
1.00
1.46
1.05
1.17
1.10
1.14
1.52
1.22
Washington Ranks 3rd - Peer States Black/White
Numbers Other High Location Quotients - Red
26
1993 Location Quotients- Tech Intensive
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Location Quotients Tech-Intensive
1.93
1.37
0.92
1.11
1.44
1.97
1.22
1.24
2.20
1.55
1.17
1.27
Washington Ranks 3rd - Peer States Black/White
Numbers Other High Location Quotients Red
28
Location Quotient Trend Washington State
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Washington County Employment 1997
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Direct County Tech-Based Employment 2011
52,918
52,918
233,475
11,929
233,475
11,929
15,048
15,048
18,739
18,739
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Economic Impact Analysis
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Employment Impacts 1997
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Total Direct and Indirect Employment Impacts 2011
1,441,721
Indirect
1,007,378
Services
Other Industries
434,343
Trade
Mfg.
Hi Tech
Direct
2010 Report 381,546
826,644 1,208,189
34
Direct Total Impacts
BO tax only
BO and Sales Tax
35
Multiplier History
36
Historic Trend in Technology-Based Industry
Employment and Impacts
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Concluding Comments

• Washington has strong technology-based industry,
  but it has changed over time
• The occupational foundation for defining
  technology-based industry continues to rise
• Our RD position relative to other states has
  also risen
• Service industry components of technology-based
  industry have continued to expand
• While these industries are strongly concentrated
  in the Puget Sound region, there has been
  geographical spread to other parts of the state
• Growth of technology-based industry has been
  faster than the state average, leading to growth
  in economic impacts that have also gradually
  risen.
• Thanks to the Technology Alliance for supporting
  this unique set of portraits of technology-based
  industry in Washington State