The Economic Impact of Technology-Based Industries in

Washington State 2000

William B. Beyers &

David P. Lindahl

Department of Geography

University of Washington

Background

• Two prior TA sponsored studies - benchmarked against 1995 and 1997

• The current study is benchmarked against 1999/2000

• Goal in the current study: an analysis as similar as possible, to foster comparisons of results

• Results are broadly comparable, but not in their entirety

Overview of Research Project

• Defining Technology-based Industry

• Trends in Washington State Technology Employment and Comparison of Washington to Other U.S. States

• Economic Impact Analysis

• Conclusions

Defining Technology-Based Industry

• Arbitrary considerations of industries (AEA)

• Intensity of R&D expenditures

• Share of labor force in R&D activities

• Mixtures of the above

• This TA study: Using consistent definition from U.S. Bureau of Labor Statistics and WA Dept. of Employment Security

• This definition differs slightly from the two previous studies, expanding covered

employment by about 1.4% in 2000

Examples of R&D Occupations

Engineering, Mathematical & Natural Science Managers

Industrial Production Managers

Engineers (all categories)

Architects, except landscape and marine

Civil Engineering Technicians and Technologists

Physical Scientists (all categories)

Life Scientists (all categories)

Computer Programmers

Data Base Administrators

Mathematical Scientists & related workers (all categories)

Social Scientists (all categories)

R&D Activity in Washington State

Performer & Sources of Funds $ Millions1998

WA Rank1993

WA RankUnited States Sources: Total Used 8,465 8 11A. Federal Government: Total Used (1) 184 17 21B. Industry: Total Used (2) 7,476 7 9 Federal Sources (D) (D) 8 Industry Sources (3) (D) (D) 10C. Universities & Colleges: Total Used (4) 534 13 14 Federal Sources 384 10 10 Nonfederal Government Sources 13 35 32 Industry Sources 42 12 14 University and College Sources 77 23 25 Non-Profits 19 23 27D Non-Profits: Total Used (5) 271 3 5

Engineering,Commercial Research,

and Consulting Services18.4%

Software and OtherComputer Services

21.0%

Federal and UniversityResearch

3.8%

Services2.7%

Bio-Technology/Bio-Medical

Manufacturing2.8%

Chemical Productionand Petroleum Refining

2.0%

Specialized Instrumentsand Devices

2.9%

Computers andElectronics

8.3%

Aerospace32.6%

Manufacturing54.1%

Services45.9%

Total Employment:285,835

Motor Vehiclesand Machinery

5.5%

Aerospace

Other Technology Based Industries

-

50,000

100,000

150,000

200,000

250,000

300,000

1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Employment Trend - Technology Based Industries-Washington State 1974-2000

Change in Concentration in Washington State

1985 LQ 1995 LQ 1997 LQ ManufacturingAerospace 5.48 9.30 10.69

Computers & Electronic Machinery 0.39 0.53 0.92Machinery & Motor Vehicles 0.30 0.66 0.43Chemicals & Petroleum 1.89 0.30 0.43

Specialized Instruments & Devices 1.21 0.80 0.83Biomedical/BiochemicalManufacturing

0.43 0.72 0.77

ServicesEngineering, Research, andManagement Consulting Services 0.98 1.18 1.09Software and other Computer Services 0.87 1.35 1.39TOTAL TECHNOLOGY INDUSTRIES 1.10 1.39 1.42

.73 - .86

.86 - .98

.98 – 1.13

1.13 – 1.42

Location Quotients

.28 - .73

1.42

Concentration ofTechnology-Based Employment

.56 - .69

.69 - .93

.93 – 1.27

1.27 – 1.94

Location Quotients

.35 - .56

1.42

1.94

Concentration ofTechnology-Intensive Employment

Concentration of Non-Aerospace Technology Based Employment

.77 - .90

.90 – 1.01

1.01 – 1.17

1.17 – 1.47

Location Quotients

.30 - .77

0.94

Technology Based Employment in Washington

Counties

51 - 200

201 - 680

681 – 3,600

3,600 – 176,097

1 - 50

0

176,097

42,046

DirectHigh TechActivity

Out-of-State Sales Revenues

Purchases OutsideState

IndirectActivity

In-S

tate

Pur

chas

es

Results:

• Output

• Jobs

• Labor Income

• Tax Revenues

Economic Impact Model Framework

Impact Analysis Results

Direct Impacts: % Change 1997-2000

Sales Revenue: $71.3 billion 17.6%Employment 285,835 7.3%Labor Income $17.5 billion 26.1%Taxes $.6 billion 26.2%

Total Impacts:Sales Revenue $127.4 billion 20.6%Employment 1,013,677 13.2%Labor Income $39.0 billion 27.8%Taxes $2.8 billion -1.7%

Total and Direct Impacts by Industry

+ =

DirectJobs

IndirectJobs

Total JobsImpact

TradeOther Industries

Services

HighTech

Mfg.

285,835

727,842

1,013,677

Direct

Indirect

Job Multipliers by Industry

0 1 2 3 4 5 6

Aerospace

Computers & Electronics

Motor vehicles & Machinery

Specialized Instruments

Chemicals & Petroleum

Softw are & Computer Services

Arch., Eng., R& D., Consulting

Biotech manufacturing

University & Federal Research

All High Tech

Conclusions• Technology-based industry now accounts for 38%

of all jobs in Washington State• Economic impacts are relatively high due to high

wages (87% above average in 2000)• Technology-based industries have grown rapidly,

expanding from 6.7% to 10.4% of state employment between 1974 and 2000

• Washington’s concentration of these industries has remained high compared to the nation

• R&D activity in Washington State is high relative to the size of our population