IDAHO HIGH-TECH HAD 11TH-FASTEST GROWTH IN 2005 BUT INDUSTRY STILL FACES CHALLENGES, ACCORDING TO CYBERSTATES REPORT

BYLINE: Ken Dey

Idaho had the 11th fastest-growing high-tech industry in the nation in 2005, according to a report released Tuesday.

But the 10th annual Cyberstates report by the American Electronics Association also said Idaho' s lack of venture capital could hold the state back.

"The fact that Idaho received no venture capital investments in 2006 reveals that we have plenty of room for improvement if we are to grow the industry and continue to add jobs in the years to come," Terry Byington, executive director of the trade association's Washington Council, said in a statement. Based in Lynwood, Wash., the Washington Council represents technology companies in Washington, Oregon and Idaho.

Washington ranked fifth for venture capital investments. Utah was 18th and Oregon ranked 19th. Utah had the greatest growth in jobs in the nation with a nearly 7 percent increase in 2005.

Idaho gained 1,100 new tech jobs in 2005 -- a 3 percent gain -- and ranked seventh for its concentration of high-tech jobs with 71 of every 1,000 private-sector employees working in high tech, the association said.

Karl Tueller, executive director of Idaho Commerce and Labor's Office of Science & Technology, said the improved job growth is proof that Idaho is moving in the right direction despite the lack of venture capital.

Idaho continues to encourage angel investors, who are willing to accept more risk than venture capital firms, to put money into Idaho companies, he said. Tueller said the state has supported organizations like the Boise Angel Alliance, which has helped fund local firms and works with companies to find other sources of money, including federal grants.

The number of jobs reflected in the report is lower than the tech jobs reported by Idaho Commerce and Labor.

That agency reported earlier this month that high-tech employment had increased by 2 percent from 2005 to 2006 to nearly 56,000 jobs. From 2004 to 2005 the number of jobs increased 4.2 percent from 52,509 to 54,711.

The association said it takes a more conservative view of what is considered high-tech jobs and excludes certain categories that the government typically classifies as high tech. For example, the association excludes jobs in wholesale and retail trade of high-tech goods and in biotechnology.

"In the 10 years of publishing this report, we have always used a conservative definition of the high-tech industry," William T. Archey, president and CEO of the American Electronics Association, said in a statement. "We probably underestimate the size of the industry to a slight degree."

The report said high tech added 150,000 new jobs nationwide in 2005 for a total of 5.8 million.

To offer story ideas or comments, contact reporter Ken Dey at kdey@idahostatesman.com or 672-6757.