Massachusetts Innovation Index Reports Shrinking High-Tech Labor Pool in Leading Technology States

The gradual aging of the American workforce and the domestic migration of young workers may be at fault for slow economic growth in many states that have historically been successful in promoting high-tech business, according to this year’s Index of the Massachusetts Innovation Economy. The 10th anniversary edition of the Massachusetts Technology Collaborative (MTC) publication reports that the state shows several signs of recovery from the technology bust of the early 00s, but cites accelerating population loss among 22- to 34-year-olds as a major challenge for high-tech industries. The group warns that if Massachusetts continues to lose skilled younger workers, the state will be ill-equipped to capitalize on advances in emerging technologies, such as renewable energy, nanotechnology and the life sciences.

 

Over the past decade, the Index has monitored key innovation indicators in Massachusetts and other leading technology states. MTC compares the state’s performance in critical technology areas to its peer states, including Virginia, Minnesota, Connecticut, Pennsylvania, Illinois, New Jersey, North Carolina, California, and New York. Last year, the group reported that although Massachusetts technology industries continued to expand, the state faced increasing competition from these technology leaders (see http://www.ssti.org/Digest/2006/011606.htm#MTC). The Index attributed this growing competition to substantial state investment in research and to “cyclical and secular forces” that were unlikely to disappear in the near future. Key among these forces was the out-migration of skilled, educated workers – a loss that was only mitigated by a strong influx of international workers.

 

This year, however, MTC reports that declining international immigration and accelerating population loss have begun to jeopardize the state’s ability to fill high-tech jobs and respond to potential future expansion in the state’s technology industries. Several other leading states tracked by the Massachusetts Index, such as New Jersey, New York, Pennsylvania and California, show similar evidence of a shrinking high-tech labor pool. If these population trends persist, states such as Massachusetts may find themselves lacking the human capital to sustain high-tech growth.

 

The Index also reports that:

• Massachusetts led the country in SBIR awards per capita between 1996 and 2005. SBIR awards in Massachusetts totaled nearly $4 million per 100,000 residents in 2005, nearly three times higher than any other state tracked by the Index.
• Only California has a larger share of U.S. venture investment than Massachusetts, though the state is currently experiencing its third year of decline from a high of 14 percent in 2003.
• Massachusetts leads among its benchmark states in workforce educational attainment levels, but ranks near the bottom of its peer group in producing high school students interested in science and technology majors.

Download the Index of the Massachusetts Innovation Economy at: http://www.masstech.org/institute/the_index.htm

 

Links to this report, past editions of the Index, and more than 4,000 additional TBED-related research reports, strategic plans and other papers can be found at the Tech-based Economic Development (TBED) Resource Center, jointly developed by the Technology Administration and SSTI, at: http://www.tbedresourcecenter.org/