WTC Newsletter

Washington's technology scorecard released

WTC's third annual Index of Innovation and Technology for Washington State is out. The 2003 report looks through a lens of 40 indicators to paint an objective picture of the underlying health of the innovation economy in the state. It assesses growth, financial capacity, human potential, competitiveness, quality of life, and innovation capacity.

Some of the findings:
Despite our faltering economy, Washington still emerges as a state with a very innovative and entrepreneurial economy. The state continues to lead the nation in the creation rate of new companies and has the second highest growth rate for employment in startup firms. Also on the positive side, the growth of non-aircraft technology sectors has steadily increased.

While venture investment in Washington companies declined almost 60 percent during the years covered by the Index, that's not as rapid as in most other technology regions. Washington remains among the top regions of the country for venture investment, ranking ninth overall. Silicon Valley continues to attract an exceptionally large share of investment—15 to 20 times more venture capital than Washington State.

The Index does raise some reasons for concern. Washington State retains the dubious honor of having the highest percentage of business closings in the country. Investors are tentative. "Money makes these companies go around," said Lee Cheatham, WTC's Executive Director. "And they're having a tough time finding enough of it right now. Investors are still expecting higher returns than are available, so many are sitting on the sidelines."

The Index also points out the slow rate of increase in elementary and secondary students passing math proficiency—a key element for participating in the innovation economy.

But overall, the third Index of Innovation and Technology shows that, even in these shaky economic times, the foundations of innovation remain strong in Washington State. People with new ideas keep right on inventing. And strong companies continue to do well. This year's report has two added features—regional measures and benchmark measurements against Washington's Strategy for the Innovation Economy. The entire report and executive summary are available online at www.watechcenter.org/techindex/.