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Study: High-Tech Jobs Fuel Area's Economy

The health of the Washington region's economy depends greatly on its ability to keep churning out more technology jobs, according to a study by Wefa Inc., an Eddystone, Pa., consulting firm.

Wefa's analysis shows that across the country, regions with strong technology clusters have led the way in overall job growth this decade, with only a few exceptions, including Orlando and Las Vegas, where entertainment and tourism are booming.

"What the study shows is the tremendous importance of high-tech success in determining the performance of a metro economy," said Wefa senior economist Ross C. DeVol.

Led by Northern Virginia's technology companies, the Washington area sits near the top of Wefa's ranking.

The region's estimated 241,900 technology workers in 1996 gives it the second-highest number of tech workers -- behind Los Angeles -- among the nation's top 100 metropolitan areas.

The Washington region has the fifth-highest concentration of technology workers in its overall work force, behind San Jose in California's Silicon Valley, two technology clusters north and west of Boston, and Austin.

The Washington area had the 25th fastest growth of technology employment between 1990 and 1996, well ahead of that of Los Angeles, Silicon Valley and the Boston area -- all of which ranked in the bottom half of the 100 metro areas for growth.

Since the 1990-91 recession, job growth in technology industries nationwide has been four times as great as job expansion overall, Wefa said.

Virginia has produced one of the most dramatic success stories, Wefa found. Its concentration of tech workers was 38 percent below the national average in 1980, but now is 41 percent above that mark.

Technology jobs account for only about 5 percent of the nation's employment, but a much higher portion of the country's net growth in jobs.

Virginia, which ranks among the nation's leaders in job growth, created 82,400 net new jobs from May 1996 to May 1997. At least 22,500 of those jobs were in technology-based services, according to William F. Mezger, senior economist with the Virginia Employment Commission.

There is an ongoing debate in the region about how much growth will be welcomed in the years ahead and whether the economy is too dependent on high-skilled job creation.

But Wefa's analysis documents the strong economic spinoff that comes from new technology-based jobs, DeVol said. Tech jobs, paying $53,000 on average across the nation, annually generate nearly $6,000 each in spending for business and travel services.

But like competitors in other parts of the country, Washington area technology companies are struggling to find enough workers to maintain their growth.

Companies are stepping up activities to train employees; but to overcome the shortage, the Washington area must compete for high-skilled workers with other parts of the country, DeVol said.

Can the region keep up the pace of technology job growth? "It's not clear," DeVol said.

HIGH-TECH HAVEN

According to Wefa's study, Washington has the fifth highest concentration of technology workers in the overall work force ...

Metro area Concentration of high-tech workers*

1. San Jose 6.34

2. Lowell, Mass. 3.76

3. Fitchburg-

Leominster, Mass. 3.26

4. Austin-San Marcos 2.53

5. Washington 2.27

... and the fastest growth rate in technology employment among metropolitan areas with the most high-tech workers:

Area and number Growth of high-tech workers,

of high-tech workers '90 -- '96

1. Los Angeles-

Long Beach (297,200) 90.79%

2. Washington (241,900) 115.09

3. Boston (240,800) 90.23

4. San Jose (236,600) 97.19

5. Chicago (214,000) 103.21

*Compares the percentage of high-tech workers in each area to the average for the nation.

SOURCE: Wefa Inc.