Idaho told it must invest in tech industry: Governor's advisers say tech wages are down 20%, but figures are challenged

BYLINE: Ken Dey, The Idaho Statesman, Boise

Apr. 4--TWIN FALLS -- Experts said Tuesday that expanding Idaho's high-tech industry may require something Gov. Butch Otter and legislators don't like to do: spend a lot of taxpayer money.

On Tuesday, Otter's advisory council painted a bleak picture of Idaho's high-tech industry.

Meeting with the council in Twin Falls, Otter was told that average wages for high-tech workers plummeted by more than 20 percent last year, while the number of tech jobs has yet to make it back to the 2001 levels.

But the lower-wage data, provided by Idaho Commerce and Labor's Office of Science and Technology, was quickly challenged by a Commerce and Labor spokesman in Boise. Bob Fick, who read an online version of this story, said Commerce and Labor's labor-data division reports that tech-sector wages last year actually went up, not down. The conflicting report was not delivered to council members Tuesday.

The Office of Science and Technology said tech workers averaged $28.69 an hour in 2005, but only $22.81 in 2006, according to preliminary data. The office said the drop in wages was probably caused by higher-paid tech workers leaving the work force and being replaced by lower-wage workers. The labor-data division said preliminary data show tech wages averaged $30.38.

Karl Tueller, executive director of the Office of Science and Technology, said he would investigate the discrepancy and notify the council of any errors.

There were just over 56,000 tech jobs in Idaho in 2006, down from more than 57,000 in 2001, the office said.

The office's wage data triggered numerous comments by council members and Otter.

"Because of the reduced number and amount of investments we've made in this state in promoting and growing technology, I think we're finally starting to see the first canary in the coal mine," said Jason Crawforth, CEO and president of TreeTop Technology in Boise,.

Otter said he hadn't been made aware of any decline and said he would have to look at the data closer to determine whether it was the beginning of a problem.

"I think I hear partially a guess," Otter said. "It's either caused by high-paying jobs leaving the state or low-paying jobs coming into the state."

Otter said he's not averse to investing in Idaho's tech industry and said he welcomed hearing about what other states were doing to see whether there were steps Idaho could duplicate. But he added that he would have to be convinced that any investment Idaho makes would have a positive return.

"I could come up with a few horror stories and huge investments made that didn't result in the results states were looking for," he said. "We need to be very careful and pick only those that will lead to success."

Otter also said he preferred helping Idaho's existing companies, not trying to compete with other states with deeper pockets to lure companies to Idaho.

Council member Bob Kustra, president of Boise State University, said he shared Otter's desire to help Idaho's existing companies, but said it would require a level of investment that he fears state leaders aren't ready to make.

Kustra said Idaho's universities lack the infrastructure they need to attract the intellectual capital and research that would lead to the next generation of science and technology companies and workers. Kustra said state leaders need to move away from the "pay-as-you-go" mentality and be willing to borrow the money needed to make a significant impact.

"It's going to take a capital program the likes of which Idaho has never seriously entertained," Kustra said.

Over the last three years, the council worked to develop a package of funding and incentives to help expand the state's tech industry, but none of the specific recommendations in a $50 million package presented this year to the governor and the Legislature were adopted.

Kustra said Idaho has barely touched its borrowing capacity and needs to learn from successful business people.

"The stories of success in Boise are about people who borrowed, they borrowed to the hilt, and companies do it every day," he said. "My No. 1 frustration with where we are right now is that Idaho doesn't understand the importance of borrowing to create opportunity and how that debt retirement can be easily paid back with jobs, the capital and the discovery and invention you bring down the road."

Otter admitted that that state leaders, including him, are averse to debt.

"We always have been, but perhaps it's time for us to take a look at the costs versus benefits," Otter said.

Reach reporter Ken Dey at kdey@idahostatesman.com or 672-6757.

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