Innovation & Technology Index Gives State Good Marks – and Some Areas for Concern

Washington State leads the nation in the creation rate of new high-tech companies and in the growth of technology employment...

“Washington State leads the nation in the creation rate of new high-tech companies and in the growth of technology employment by these startup firms, according to a new report.The state also leads in the loss of businesses, the report has found.According to the report, The Index of Innovation and Technology for Washington State, Washington’s rate of new company creation is over 20 percent higher than that of California, the state ranking second on the index. Washington’s rate is more than twice that of the median rate for all states, according to the index created by the Washington Technology Center. Washington also has the highest annual percentage of all states of company closures – about 20 percent of businesses here cease operations each year.Additional highlights of the report just released by the WTC include: – Washington has 12 technology-based sectors that are above the national average in industry dominance. – The aircraft industry still employs the majority of technology workers here, but that percentage has decreased from 59 percent of total technology employment to 39 percent. Software has increased to 23 percent. – Northwest venture capital investment, an indicator of future business growth, is highest in software and telecommunications. – Venture capital investment has increased by 99 percent from third quarter 1997 to third quarter 1999. This increase, however, has not kept pace with demand. The data emphasizes the need to support small technology companies since they have been the engine for growth and diversification in Washington’s high-tech industries, said Lee Cheatham, WTC executive director and co-author of the report. The state has a role to play through direct investment in technology and education and by creating an environment that helps attract outside investment. The role of the state is underscored by Martha Choe, director of Washington State Department of Community, Trade and Economic Development, which provides funding for the technology center. Understanding the impact technology has on Washington’s economy it central to CTED’s plan to foster economic growth statewide, Choe said. WTC’s work on this report, and in its core mission of helping Washington’s companies develop technology, helps take us to the next level in that effort. The index is said to be the first of its kind for the state and provides comparative data from more than 30 different sources, which help to establish a benchmark for assessing the state’s progress in growing a technology-based economy. The report is co-authored by Paul Sommers, senior research fellow with the UW Northwest Policy Center and a member of Governor Gary Locke’s Council of Economic Advisors. The decision on which economic indicators to track was made in consultation with an advisory committee comprised of members of Washington’s industry and government. The complete report is available online at www.watechcenter.org, accessible through the Links section of www.tacomadailyindex.com.”

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