Dayton ranks third in high-tech job growth

Top 5 metro areas for high-tech job growth, 2010-11

Source: Bay Area Council Economic Institute

Ohio’s “New Economy” rankings

Source: Information Technology and Innovation Foundation

Two studies issued Thursday show that the Dayton area is among the top metros in the nation for high-technology job growth, but Ohio lags other states in its ability to thrive in the so-called “new economy.”

The Dayton area saw a 24.2 percent increase in the number of high-tech jobs created from 2010 to 2011, the nation’s third-largest increase behind Greensboro, N.C. and Columbia, S.C., according to Technology Works: Patterns of High-Technology Employment and Wages in the U.S.

Dayton added nearly 3,500 high-tech jobs during this period, the report said.

Ohio’s average growth in technology jobs from 2010 to 2011 was 4.6 percent, nearly twice the national average of 2.6 percent, the study said.

But Ohio ranks 32nd for having the necessary economic structure to adapt to a global economy that is increasingly dependent on knowledge and innovation for growth, according to the 2012 State New Economy Index.

Scott Koorndyk, the Dayton Development Coalition’s executive vice president of economic development and operations, agreed with the second study’s findings. He said the Dayton region “has to develop an innovation ecosystem” to meet the challenges of globalization and the digital economy.

However, Dayton is better positioned to succeed than other parts of the state because of its many research and technology assets, Koorndyk said.

“We’ve got the building blocks to resolve some of these challenges much quicker and in a much more effective way than others … statewide or across the nation,” he said.

Dayton has an above-average concentration of 18,000 high-tech workers, according to the Technology Works study by the Bay Area Council Economic Council, a public-private partnership based in San Francisco that produces analyses on economic policy issues.

The average salary last year for a Dayton-area high-tech worker was $77,638, the report said.

High-tech industries are defined as having a high proportion of scientists, engineers and technicians; a high proportion of research and development employment; production of high-tech products; and the use of high-tech production methods, according to the report.

Koorndyk said Dayton is home to 7 percent of Ohio’s overall workforce, but 12 percent of the state’s high-tech workers.

“We’ve got this massive research and development engine, Wright-Patterson Air Force Base. Five of the 10 Air Force Research Laboratory directorates are run out of Dayton,” Koorndyk said.

AFRL spends $2.2 billion annually on research and development, according to Koorndyk. “That infuses the culture of Dayton,” he said.

Other local technology assets include the University of Dayton and Wright State University research institutes, as well as large information technology firms such as LexisNexis, Teradata and Sogeti USA.

The Dayton Development Coalition projects a local technology industry growth rate of about 9 percent over the next few years, compared to 7 percent growth nationally.

“We believe we will grow at a faster pace. We believe we are developing and attracting that knowledge work force that we need,” Koorndyk said.

Ohio’s “knowledge jobs” ranking has dropped significantly over the last two years, according to the State New Economy Index. That report ranked Ohio 28th in the nation, down from 16th in 2010.

The index, which benchmarked the innovative capacity of all 50 states, was published by the Information Technology and Innovation Foundation, a non-partisan research and education institute headquartered in Washington, D.C. The nonprofit group’s mission is to formulate and promote public policies to advance technological innovation and productivity. It has published six such reports since 1999.

The ITIF study measures the economic structure of states, not their economic performance or policies. The report uses 26 indicators, divided into five categories that best capture what is new about the “new economy:” Knowledge jobs; Globalization; Economic dynamism; Digital economy; and Innovation capacity.

“Ohio fell in every indicator, but some to a greater extent than others,” said Luke Stewart, an ITIF economic analyst. The two biggest declines were in the immigration of knowledge workers from other countries or states, and manufacturing value added, which is the sum of unit profit, depreciation cost and labor cost, he said.

State officials were skeptical about the ITIF report’s findings.

“Traditionally these types of reports do not reflect the total picture of Ohio’s industries,” said Katie Sabatino, a spokeswoman for the Ohio Development Services Agency. “While Development appreciates the work that goes into them, recognize the evaluation lens used by its authors may be different from those who work more closely with Ohio’s economy,” she said.

The Development Services Agency, formerly known as the Ohio Department of Development, houses the Ohio Third Frontier, a $2.3 billion initiative designed to boost the state’s economy through investments in targeted innovation and technology.

Koorndyk said the ITIF report identified “things that we know are challenges for this region.” To meet those challenges, the Dayton area needs to align its research and development with local industry, increase its global fluency and transform its skilled workforce, he said.