Technology Economy Still in Washington State's Future

Washington State remains poised to capture more benefits from its technology-driven economy, according to the Index of Innovation and Technology released last month by the Washington Technology Center (WTC). As the state's lead organization to support science and technology, WTC publishes the Index to provide the state's decision makers with annual benchmarks for setting policy and  public investments to promote technology-based economic development.

The fourth annual provides analysis of more than 40 statewide measures and 12 regional indicators for evaluating the state’s economic growth with respect to technology industries. Innovation capacity, new company creation, company closings, patent generation, top technology patent areas, patents by industry, federal funds for research and development, and research and development (R&D) expenditures are all assessed.

Young companies and emerging technologies continue to be primary drivers of Washington's potential, the report shows. The state ranks eighth nationally in innovation capacity. Patent generation also continues to be strong, up 10 percent from the previous year across all technology sectors.

For the third consecutive year, Washington led the nation in new company launches -- more than 16 percent above the second-ranked state, Colorado. Along with this ranking comes a high rate of company closures. Twenty percent of Washington businesses are said to cease operations each year, making it the second highest in the nation.

R&D investments are growing in Washington but, relative to other states, not as quickly as anticipated. The report shows R&D expenditures have been continually on the rise, up nearly 227 percent since 1989, from $3.22 billion to $10.52 billion. Since 1997, however, Washington has slipped from eighth nationally to 17th overall in federal R&D funding.

In addition, strains from the recession are still visible in financial markets, the report contends. Since 2002, there has been a continued downturn in the rate of investment to technology sectors. Capital investment is still being made, but not as enthusiastically. Washington remains among the top regions in the country for venture investment, but has slipped from ninth to 10th position among the 11 largest capital markets.

The Washington Index of Innovation and Technology is available on the WTC website at: http://www.watechcenter.org/techindex/index.html