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High-Tech Growth: Technology Jobs Increase in R.I., But State Still Lags Region

Posted on: Thursday, 20 April 2006, 12:00 CDT

By Andrea L. Stape, The Providence Journal, R.I.

Apr. 20--Rhode Island made strides in strengthening and growing its technology industry, but the state's tech sector continues to lag behind the nation and several of its New England counterparts.

Between 1999 and 2004, Rhode Island grew its technology employment by 17 percent to 18,890 employees, while high-tech employment nationally and in the other five New England states slipped, according to Cyberstates 2006, an analysis of the nation's technology industry by the AeA, an industry trade group, formerly known as the American Electronics Association, in Washington D.C. Its most recent state-by-state employment numbers are from 2004.

Rhode Island also increased the number of technology employers and significantly increased the amount of venture capital dollars flowing into local technology companies, according to the study. As a result, the state's national ranking, based on technology employees, has inched up three spots over the five years, according to the study.

However, Rhode Island still ranks 42nd nationally in terms of high-tech employment, according to the study. Massachusetts ranked 6th and Connecticut 24th. The AeA does not include life sciences or biotechnology jobs or employers in its study.

"I'm not surprised by the rankings. On an absolute scale, I know we're not top 10," said Jeff Seemann, dean of the College of Environmental and Life Sciences at the University of Rhode Island and co-chair of the Rhode Island Science and Technology Advisory Committee.

When it comes to the other New England states, Rhode Island remains at the middle or bottom of the pack in terms of technology employment, number of technology companies and high-tech wages, according to the Cyberstates ranking.

For example, 46 out of every 1,000 Rhode Island workers were employed by a high-tech firm in 2004, according to the study, and 19 percent of the state's exports were high-tech. While Vermont ranked 45th nationally when it comes to high-tech employment, the state has 60 out of every 1,000 employees working at high-tech companies and its high-tech exports were 84 percent of total exports in 2004.

Also, while the average high-technology wage in Rhode Island in 2004 was $67,139, New Hampshire's average high-tech wage in the same year was $71,202, according to the study.

Still, Rhode Island did increase technology employment during the five-year period while Massachusetts' technology employment dropped 11 percent.

"One of the reasons we're doing better is that we didn't lose that much to begin with," compared with neighboring states during the dot-com crash and the ensuing technology downturn, said Katherine O'Dea, executive director of the Tech Collective, a Rhode Island nonprofit organization representing the technology industry. "The bad news is that we weren't at the same high level as them to begin with."

In some areas, though, Rhode Island has seen significant growth, according to the study. Over the past five years, local technology companies have attracted increasing levels of venture capital investment, raising the level of investment brought into the state from $33.1 million in 2000 to $77.2 million in 2005. The influx grew in 2005, even though investment in technology companies nationally fell, according to the study. In addition, Rhode Island is the 10th-highest-ranking state in the country when it comes to per capita expenditures on research and development.

Nationally, the four years before 2005 were tough for the technology industry overall, according to the AeA. In 2005, the industry added 61,000 jobs nationally, according to the study, after four years of declines. Total high-tech employment in 2005 was 5.6 million workers. In addition, the jobless rate for most technology professions dropped in 2005, with unemployment for electrical engineers at a three-year low, according to the study.

"This growth is an important first step in the turnaround of the high-tech industry," the AeA said in a statement yesterday.

To Seemann, Rhode Island's upward climb in the rankings is a sign of the state's potential. He co-chairs the Rhode Island Science and Technology Advisory Committee, which was established by Governor Carcieri last year to study the state's science and technology industries in comparison with other states and to come up with a strategic plan for retaining scientists, encouraging company creation, attracting companies and fostering innovation. The council's most recent recommendations, ranging from offering tax breaks to entrepreneurs to supporting the creation of a wireless network across Rhode Island, were introduced last week as bills in the legislature or incorporated into the governor's budget proposal for next year.

"We have the advantage of being small and very nimble. Can we take advantage of the opportunities we have? Yes, absolutely," said Seemann. "STAC is trying to say, 'Here's a few key critical investments at a time when there isn't a lot of money but they are key to moving us up the list.' "

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Copyright (c) 2006, The Providence Journal, R.I.

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Source: Providence Journal

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