'Not Good Enough'

'Not Good Enough'

TECH TRENDS by Janet Leiser | Senior Editor

Florida was recently ranked second in the nation behind Virginia for its creation of technology jobs. But the Sunshine State still lags behind the national average of 51 tech positions for every 1,000 jobs.

Virginia, which added 9,100 technology jobs in 2004, is also No. 1 in the ratio of tech jobs to other employment.

Florida added 6,700 tech jobs in 2004, raising the total to 265,500, the latest year available from AeA, the national technology trade group that released the ninth annual Cyberstates report April 19 .

Maryann Fiala, Florida executive director of AeA, says: "We have a long way to go in Florida in becoming an economically diverse state with high-wage workers. We're 30th in the country; that's not good enough."

Still, economic development officials and others welcomed the report that showed:

• Florida is fourth in the number of high-tech workers, behind first-ranked California, Texas and New York.

• The state was third in the nation with its high-tech exports of $11 billion, which was about 33% of all Florida exports. High-tech exports climbed $1.5 billion between 2004 and 2005, the largest increase in the nation.

• Venture capital investments climbed 23% in Florida in 2005 to $387 million.

• The state's high-tech payroll of $15.6 billion was seventh in the nation.

• Florida's leading high-tech industry sectors are telecommunication services, 66,000 jobs; computer systems design/related services, 51,800; and engineering services, 50,000.

Kathy Baylis, executive director of the Economic Development Corp. of Sarasota County, says the report reflects the strength of the state's economy.

"Florida has a very vibrant and strong economy right now. We're the fastest job-creating state in the nation," she says. "Many of the jobs being created today are IT jobs and communication jobs that require technology."

Andy Hafer, executive director of the Tampa Bay Technology Forum, says: "It's great, interesting news. Any time you get national press like that, outsiders think there must be something good going on. Good news begets good news."

But Fiala, of the AeA, previously known as the American Electronics Association, says she found two statistics especially troubling: Florida's high-tech workers earned an average annual wage of $58,929 in 2004, making the state 30th in the nation in that category; and only 41 of every 1,000 private sector workers were employed by a tech firm, compared to the national average of 51 per 1,000.

She says Florida officials should study Virginia, which is "nipping at Florida's heels," to find out what that state has done to move up so rapidly in the tech sector, and then emulate it.

"What have they been doing differently?" asks Fiala.

"We can't be complacent," she adds. "The governor [Bush] has made it very clear he wants economic diversity. I don't think we have the across-the-board buy-in that we need to make it happen."

She cites a recent AeA event in Tallahassee where 30 Florida legislators were invited. Only two showed up.

"It was disappointing from the standpoint they need to recognize the industry and become partners with trade groups like us," says Fiala, who says it's her job is to ensure the state's technology industry is well protected.

Lack of venture capital is a big problem in Florida, Hafer says. Even though VC investments increased significantly in 2005, the state is 12th in the nation in that category.

"Access to capital is the biggest reason that early stage companies and entrepreneurs can't survive here," Hafer says. "Government should invest in emerging companies a small portion of state pension funds, about ½ of 1%. There are more states doing it than not doing it."

It's important, he says, to foster a business-friendly environment that helps companies grow.

"The way to success is growing companies and spinning companies off," Hafer says. "The classic economic development official tries to get companies to move their headquarters to Florida. Our way [at TBTF] to be successful is to have the small companies become medium companies that become large companies that spin off companies. The grow-your-own mentality."

In addition, Fiala says the state must commit to providing a "world-class education for students," with an emphasis on math and science to ensure Florida high school and college graduates have the skills required for jobs in the technology industry.

Baylis and Hafer agree.

"We have to make sure our future and current work force has the set of skills businesses need," Baylis says, adding that's a top concern for many employers.

"But it's not just endemic to Florida," Baylis says. "It's a bigger issue than the state."

Absolutely we need to focus on that issue."

By the Numbers

U.S. HIGH TECH AVG. EMPLOYMENT

2000 6,583,000

2001 6,529,800

2002 5,917,700

2003 5,584,700

2004 5,540,000

2005* 5,601,000

Source: U.S. Bureau of Labor Statistics and AeA

Cyberstates by High Tech Establishments

State No. of Establishments*

1. California 41,900

2. Texas 22,000

3. Florida 19,800

4. New York 17,800

5. Illinois 15,000

Source: U.S. Bureau of Labor Statistics and AeA. Establishments are defined as a single economic unit such as a factory or store that produces goods or provides services. Most large companies have multiple establishments.

Tech Employment

Growth, 1999-2004

State Jobs added*

1. Virginia 9,900

2. Maryland 8,600

3. District of Columbia 5,100

4. Washington 4,200

5. Florida 3,800

Source: U.S. Bureau of Labor Statistics and AeA

*Net gain includes losses over five years

TOP ELECTRONICS

EXPORTERS IN 2005

United States $199 billion

1. California $47.8 billion

2. Texas $34 billion

3. Florida $11 billion

4. New York $9 billion

5. Massachusetts $8.7 billion

Source: U.S. Census Bureau and AeA

Electronics Exports

by Numeric Growth,

2004-2005

1. Florida $1.5 billion

2. Minnesota $977 million

3. Vermont $952 million

4. Wisconsin $879 million

5. Tennessee $702 million

Source: U.S. Census Bureau and AeA

HIGH-TECH VENTURE CAPITAL VS. OTHER INDUSTRIES, 2005

High-Tech $11.8 billion

Bio-Tech $3.9 billion

Medical Devices

/Equipment $2.1 billion

Media/Entertainment $900 million

Industrial/Energy $700 million

Source: AeA, PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association-MoneyTree SurveySource: U.S. Bureau of Labor Statistics and AeA