Latest Research Shows Positive Trends in Northeast Ohio’s High Tech Economy Between 2004 and 2007

3/12/2009

NorTech and Center for Economic Development at Cleveland State University today released the Northeast Ohio High-Tech Economy Report, following a preview of selected findings released in December 2008. The annual report monitors Northeast Ohio’s high tech economy compared to the Midwest and U.S. from the perspective of employment, output, productivity and wages in high-tech industries.

“Between 2004 and 2007, Northeast Ohio experienced high tech employment growth in the midst of an overall decline in employment, an increase in productivity (faster than the Midwest and U.S.) and an increase in academic R&D expenditures. While we still need to create more high tech jobs to be on par with the Midwest and U.S., the data shows encouraging signs that Northeast Ohio’s high tech economy is moving in the right direction,” said Ziona Austrian, Ph.D., director of the Center for Economic Development at Cleveland State’s Levin College of Urban Affairs.

“These data tell us that over time, Northeast Ohio is making the transition to a more high-tech, globally competitive economy. But we now find ourselves in a very serious, global economic crisis and its impact on our region’s high tech economy is unknown. We remain confident that the seeds planted by long term investments in Northeast Ohio’s technology research and development base will bear fruit as the economy recovers,” Dorothy Baunach, president and chief executive officer of NorTech.

Major highlights from the most recent analysis are:

In 2007, the High Tech Sector in Northeast Ohio Represents 170,602 Jobs or 8.5% of the Region’s Economy. In 2007, total employment in Northeast Ohio stood at 1,999,668, with 170,602 jobs credited to the high-tech sector, representing 8.5% of our regional economy. The high-tech sector in the Midwest and U.S., represent 9.0% and 9.5%, respectively, of the total economy.

Between 2004 and 2007, Employment in the High Tech Sector in Northeast Ohio is up 2.7% While Overall Employment is Down 0.2%. Employment in Northeast Ohio’s high-tech sector is up 2.7% since 2004, even as the region saw an overall decline of 0.2% in employ¬ment across all industries during the same period. In absolute terms, Northeast Ohio added 4,436 jobs in the high-tech sector between 2004 and 2007 while losing 3,162 jobs overall.

The High Tech Sector in Northeast Ohio Leads the Midwest and the U.S. in Productivity Gains Between 2004 and 2007. While the absolute level of productivity in Northeast Ohio lags the U.S. and is slightly behind the Midwest, between 2004 and 2007 productivity in the region grew 7½ times faster than in the Midwest and 2 times faster than in the U.S.

NEO Universities Posted 39% Growth Rate in Research Expenditures from 2000 to 2006, Outpacing the U.S. and the Midwest. Between 2000 and 2006, academic research expenditures increased 39% in Northeast Ohio, leading the state of Ohio and far surpassing the Midwest and the U.S. Estimates of R&D activity conducted by industry between 2000 and 2006 showed that industry in Northeast Ohio increased spending by 9% while the Midwest and the U.S. posted overall decreases.

High Tech Employment Growth Rate in Northeast Ohio Falls Short of Midwest and U.S. Although high-tech employment in Northeast Ohio was up 2.7% between 2004 and 2007, high-tech employment was up 3.6% in the Midwest and 6.6% in the U.S, over the same period.

The Cleveland State research team used a definition of high tech industries and occupations developed by Daniel Hecker, an economist at the U.S. Bureau of Labor Statistics. This definition was used to study Northeast Ohio’s 21-county area consisting of six metropolitan regions (Cleveland-Elyria-Mentor, Akron, Canton-Massillon, Mansfield, Sandusky, and Youngstown-Warren-Boardman) and eight non-metropolitan counties.

For additional information about this study, please call Dave Karpinski at 216-533-3725, or Dr. Ziona Austrian at 216-687-3988. Copies of the final report will be available for download at www.nortech.org and www.urban.csuohio.edu/economicdevelopment/publications.html.

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