October 30, 2006
North-Central West Virginia’s
Technology Industry:
A Pathway Through the
21st Century
Prepared by:
Scott D. Watkins, Consultant
Caroline M. Sallee, Senior Analyst
Executive Editor:
Patrick L. Anderson, Principal and CEO
Anderson Economic Group, LLC
1555 Watertower Place, Suite 100
East Lansing, Michigan 48823
Tel: (517) 333-6984
Fax: (517) 333-7058
http://www.AndersonEconomicGroup.com
© 2006, Anderson Economic Group, LLC
Permissions for reproduction granted given proper citation
Table of Contents
I. Executive Summary............................................ 1
Report Purpose and Overview ........................................ 1
The West Virginia Economy: Historical Perspective ..... 3
Emergence of the Technology Industry .......................... 3
Technology Industry Today ............................................ 4
Benefits of the Technology Industry ............................... 5
Other Technology Activities ........................................... 6
Looking Forward ............................................................. 7
II. West Virginia’s Economy: Historical
Perspective............................................................ 8
Employment by Industry ................................................. 8
Labor Force ................................................................... 11
Income Data .................................................................. 15
III. Emergence of the Technology Industry ......... 16
The Federal Anchors ..................................................... 17
IV. North-Central West Virginia’s Technology
Industry Today..................................................... 21
Defining the Technology Industry ................................ 21
Technology Employment: The Big Picture .................. 24
Technology Industry Clusters ....................................... 26
V. Economic Benefits of the Technology
Industry ............................................................... 28
Definition of Economic Impact ..................................... 28
Technology Industry Economic Impacts ...................... 29
Socioeconomic Benefits ................................................ 31
Economic Impact Methodology .................................... 33
VI. Other Technology Industry Activities ............ 36
Science and Engineering Graduate Students ................ 36
University Research and Development ......................... 36
Small Business Innovation Research (SBIR) Awards .. 40
Industry Advocacy ........................................................ 41
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Table of Contents
VII. In Focus: North-Central West Virginia
Technology Firms................................................ 45
Electronic Warfare Associates, Inc. .............................. 45
National Biometric Security Project ............................. 45
Azimuth ......................................................................... 46
Information Research Corporation ................................ 47
FMW Composite Systems Inc. ..................................... 47
Global Science & Technology ...................................... 48
Touchstone Research .................................................... 48
VIII. Looking Forward ........................................ 50
Appendix A: Technology Industry Definition
Methodology ......................................................A-1
Review of Existing Definitions ....................................... 1
Selecting NAICS to Include: First Cut ........................... 2
Selecting NAICS to Include: Second and Third Cuts ..... 2
Finalizing the Definition ................................................. 3
Technology Cluster Classifications ................................ 3
Appendix B: Other Definitions of the Technology
Industry ..............................................................B-1
American Electronics Association (AeA) ....................... 1
The Pittsburgh Technology Council ............................... 1
Carnegie Mellon and SSTI .............................................. 2
Daniel Hecker, United States Bureau of Labor Statistics 2
Anderson Economic Group (2001) ................................. 2
Appendix C: Technology Industry Data............ C-1
About the Data ................................................................ 1
Appendix D: Demographic and Economic
Data .................................................................. D-1
Appendix E: Economic Impact Data Sheets ......E-1
Appendix F: Bibliography..................................F-1
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Table of Contents
Appendix G: Project Team................................ G-1
Patrick L. Anderson ........................................................ 1
Scott D. Watkins ............................................................. 1
Caroline M. Sallee ........................................................... 2
Other Contributors .......................................................... 2
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Executive Summary
I. Executive Summary
REPORT PURPOSE
AND OVERVIEW
Purpose. This report provides a comprehensive assessment of the technology
industry in north-central West Virginia, including the I-79 Technology Corridor.
The assessment provides businesses, government officials, educational institutions, and residents of West Virginia with a deeper understanding of the breadth
of the technology industry in the region, and the economic impacts that are associated with it.
Report Overview. Following this executive summary, we provide a brief look at
West Virginia’s economy during the later years of the 20th century. We then
explore the emergence of the technology industry that began in the late 1980s in
north-central West Virginia.
After establishing how the technology industry became rooted in the region, we
turn our focus on quantifying the scope of the industry today. For this, we estimate the number of jobs and the average wage in the industry; profile selected
technology employers to illustrate the advances they are making; and then estimate the economic impacts that the region’s technology industry has on the
state. We also estimate the economic impact that has stemmed from construction associated with the I-79 Technology Park and the new WVHTC Foundation
Research Center.
We conclude with a discussion of other technology related activities taking
place in the industry, such as the growing enrollment of science and engineering
students at West Virginia University, SBIR funding for businesses, and R&D
projects being conducted at universities and colleges throughout the region. The
section also discusses important industry advocates, like the West Virginia High
Technology Consortium (WVHTC) Foundation, the Polymer Alliance Zone,
and the I-79 Development Council.
At the end of the document we provide supporting materials and more detailed
data sets. Appendix A describes our methodology used in defining the technology industry, and Appendix B looks at how others have defined the industry. In
Appendix C we discuss our employment estimation technique. We then present
more detailed data sets, with demographic and historical economic data covered
in Appendix D, and our economic impact data detailed in Appendix E. Appendix F features a bibliography, and Appendix G offers biographical information
on this report’s project team.
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North-Central West Virginia
77
Weirton
71
71
99
Wheeling
70
76
PENNSYLVANIA
70
70
OHIO
Morgantown
68
Fairmont
Martinsburg
MARYLAND
270
Clarksburg
Parkersburg
79
79
66
77
WEST VIRGINIA
64
Huntington
81
81
Charleston
95
64
KENTUCKY
64
Beckley
64
VIRGINIA
North-Central West Virginia
I-79 Technology Corridor
I-79 Technology Park
Created By: Anderson Economic Group, LLC
Data Source: ESRI
August 2006
Miles 0
50
100
Executive Summary
THE WEST VIRGINIA
ECONOMY:
HISTORICAL
PERSPECTIVE
For much of the twentieth century West Virginia relied on coal mining and basic
manufacturing for jobs and income. When these traditional blue-collar industries prospered, so did the people of West Virginia. This lack of industry diversification, however, meant that when core industries faced hard economic times,
the people of West Virginia also suffered.
Over time, the traditional, blue-collar jobs in mining and basic manufacturing
have disappeared, and jobs in service industries have grown in the state. This
transition to a service economy has not been painless. High-paying jobs in service-producing industries often require more education and skills, which are
often harder for older workers to acquire. As noted in later sections, lower
income and high unemployment was common in the early years of West Virginia’s transition from coal mining and manufacturing and into the service
industries.
EMERGENCE OF THE
TECHNOLOGY
INDUSTRY
Two West Virginians, Senator Robert C. Byrd and Congressman Alan B. Mollohan, saw the aformentioned economic struggles as an opportunity to pursue further development of a technology industry in West Virginia. Through their
efforts, and those of many others, north-central West Virginia’s technology
industry took shape. Notable milestones in the emergence of the region’s technology industry include:
• The location of federal anchors in the region. Technology in north-central West
Virginia is well rooted by federal technology anchors. The Department of
Energy’s National Energy Technology Laboratory (NETL) was the first federal
agency in the region. A significant period of growth occurred in the early 1990’s
when NASA opened the IV & V Facility, and Senator Byrd began negotiations
for the arrival of the FBI’s Criminal Justice Information Services Division. In
1996, the National Institute for Occupational Safety and Health opened three
divisions in Morgantown, and today the Department of Defense’s Biometrics
Fusion Center is expanding in Clarksburg.
• The formation of the West Virginia High Technology Consortium (WVHTC). In
1990, the WVHTC began as a loose affiliation of six companies with a common
goal to encourage the growth of technology throughout West Virginia. Established as the WVHTC Foundation in 1993, today the organization provides
valuable resources to start-up companies, and manages initiatives such as the I79 technology park, and the Global Grid Exchange.
• Programs established to help small companies grow in the region. In 1990 the
WVHTC began a mentor-protégé program, where larger companies like Electronic Warfare Associates (EWA), Mantech, and Lockheed Martin, served as
mentors to smaller, upcoming technology companies. The first “Teaming to
Win” conference, which provides local businesses an opportunity to explore
collaborative opportunities with large firms, was also held in 1990.
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Executive Summary
TECHNOLOGY
INDUSTRY TODAY
Years of investment and work to establish a technology industry in north-central
West Virginia have yielded a solid foundation. Today the industry is diverse,
well rooted, and a significant source of employment and income. At the core is
the I-79 Technology Corridor, which includes Harrison, Marion, and Monongalia counties. Over half of the region’s technology industry jobs are within the
corridor, as are the federal technology anchors.
Technology employment is far from absent in the rest of north-central West Virginia. With over 18,000 technology jobs that pay, on average, $53,325 a year,
9% of the jobs in the region are technology industry jobs. Perhaps even more
significant is that these jobs account for 16% of all wages paid in the region, a
clear indication that industry offers higher wages than others do.1
Also significant is the diverse scope of the technology industry in north-central
West Virginia. As shown in Figure 1, technology employment across industry
segments (clusters) is quite balanced. No single cluster accounts for more than
25% of technology employment (chemical and material has 24.4%), and no
cluster represents less than 15% of technology employment (advanced manufacturing has 15.9%).
Further, we found significant evidence of collaboration across clusters. For
example, two advanced manufacturing firms that we visited (Touchstone
Research and FMW Composites) integrate chemical and material expertise and
information technology expertise in their product development and research.
FIGURE 1.
Technology Industry Employment by Cluster, 2006
Technology employment in the region is well distributed across all five sectors, providing opportunity for collaboration across sectors.
1. U.S. Census County Business Pattern data shows the average wage across all industries was
$27,449 for West Virginia, and $36,967 for the United States, in 2004.
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Executive Summary
BENEFITS OF THE
TECHNOLOGY
INDUSTRY
While more than 18,000 jobs with average wages of $53,000 is impressive, the
true economic benefit stemming from north-central West Virginia’s technology
industry reaches much deeper.
Our analysis provides an estimate of the economic impact that north-central
West Virginia’s technology industry has on the state. We follow a rigorous
methodology designed to provide a conservative, and realistic, economic impact
assessment. We only account for net new economic activity, activity that would
not be in the state if not for the technology industry in north-central West Virginia. We exclude out-of-state expenditures and intra-industry transfers, such as
one firm purchasing computer programming services from another. Further, we
assume that some replacement economic activity, estimated to be 20% of the
operating expenditures of the technology industry, would still occur if the technology industry were not present.
Economic Impact from Industry Operating Expenditures. Every day technology
firms in north-central West Virginia spend money on office supplies, accounting
services, advertising, wages, and other normal operating items. Each of these
expenditures has a direct economic impact on the state, but only if it is made instate to an employee or a business that is not a part of the technology industry.
Using U.S. Census Bureau data, industry-specific financial ratios, and our own
first-hand information about the region and industry, we estimate that, in 2006,
the north-central West Virginia technology industry will have a total economic
impact of $5.2 billion on the State of West Virginia.
TABLE 1. Economic Impact on the State of West Virginia from Annual
Operating Expenditures by Tech Firms in North-Central West Virginia (2006)
Direct Economic Impact from Payroll Expenditures
Direct Economic Impact from Other Operating Expenditures
Indirect Economic Impact from Payroll Expenditures
Indirect Economic Impact from Other Operating Expenditures
Total Economic Impact
$769,635,702
$2,331,137,727
$275,864,373
$1,799,867,476
$5,176,505,278
Source: Anderson Economic Group, LLC
Economic Impact from Construction (I-79 Technology Park). Growth in the tech-
nology industry has also resulted in significant construction activity throughout
the region. While the total construction activity that has occurred due to the
growing technology industry is too wide-spread to fully evaluate, we were able
to obtain data on construction projects in the I-79 Technology Park, located in
Fairmont, WV. From this data, we determined that 62% of all the construction
expenditures associated with the park was spent in West Virginia. In total, this
yields a direct economic impact of more than $111 million, and indirect economic impacts of over $200 million.
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Executive Summary
TABLE 2. Economic
Impact on the State of West Virginia from I-79 Technology
Park Construction (2006 dollars)
Direct Economic Impact
$111,269,431
Indirect Economic Impact: Industry Output
$122,396,374
Indirect Economic Impact: Earnings
Total Economic Impact
$77,888,602
$311,554,407
Source: Anderson Economic Group, LLC
Other Benefits. Aside from quantifiable economic impacts, the growth of the
technology industry has also had other benefits. For example, data is available
to show that education attainment in north-central West Virginia is above state
averages, and income in the I-79 Corridor is growing at a faster rate than the rest
of the state and nation. Also, the I-79 Technology Corridor has had lower unemployment than the state of West Virginia since the end of 1997. It is impossible
to determine the full impact of the growing technology industry on these factors,
but there is most certainly some level of benefit.
OTHER TECHNOLOGY
ACTIVITIES
In addition to the employment and economic impact data summarized above,
there are important variables, such as public-sector research activities and funding, to consider when assessing a region’s technology economy. Such information, is presented in “Other Technology Industry Activities” on page 36. Some
of the more significant findings from this section include:
• West Virginia University had 1,761 science & engineering graduate students in
2003, up from 1,457 in 2001. The University consistently ranks among the top
20% of the nation’s universities for research and development expenditures in
science and engineering.
• West Virginia University, Fairmont State University, Glenville State College,
West Liberty State College, and Wheeling Jesuit University are all involved in
research projects and technology initiatives that have been awarded grants by
national organizations or federal agencies.
• Small Business Innovation Research (SBIR) awards granted to businesses in
West Virginia have steadily increased over the past decade. In 2004, West Virginia businesses received 22 SBIR awards, totaling more than $8 million. 13 of
West Virginia’s 22 SBIR awards in 2004 were granted to three firms in northcentral West Virginia.
• The region has an extensive network of advocates and resources for the technology industry, including the WVHTC Foundation, the Polymer Alliance Zone of
West Virginia, and the I-79 Development Council.
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Executive Summary
LOOKING FORWARD
The progress made towards growing the technology industry in north-central
West Virginia in recent years is readily apparent. From the I-79 Technology
Park, to the 18,000+ employees in the region’s technology sector who are earning above-average wages and helping to support local retailers, charities, restaurants, and other businesses, one can see that the region has a flourishing
technology industry.
There is also an active and organized base of support for the technology industry in north-central West Virginia. Groups such as the WVHTC Foundation, the
Polymer Alliance Zone, and the I-79 Development Council continue to promote
the region to businesses from across the country and around the world as a center for technology. They also actively promote the industry at home by providing business assistance programs, and by raising awareness in schools and
communities to let the next generation of West Virginians know that exciting
opportunities are available in the technology industry.
Despite the progress already made, the potential remains for even more
advancement in coming years. However, without further concentrated efforts,
the momentum in place may not be enough to carry the industry forward. Fortunately, leadership in the region appears committed to the industry and future
efforts to facilitate its growth. Assuming this effort continues, the people of
West Virginia can expect to further benefit from a growing technology industry
for years to come.
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West Virginia’s Economy: Historical Perspective
II. West Virginia’s Economy: Historical
Perspective
The West Virginia economy—its labor force and industry mixture—has
changed substantially in the last sixty years. Once dependent upon blue-collar
industries such as coal mining and basic manufacturing for jobs, the state has
seen these industries decline and employment in service industries grow. This
transition has not been painless. Here we review the state’s early concentration
on manufacturing and coal mining, and see why diversifying to service sector
and other industry sectors, including technology, was an important step.
Statewide Industry Employment 1940-1989
EMPLOYMENT BY
INDUSTRY
The story of West Virginia’s economy is one of reliance on coal mining, construction, and manufacturing. When these industries prospered, so too did the
people of West Virginia. But during hard economic times, the lack of a diversified economic base meant that when goods-producing industries suffered, total
employment and population in the state fell too.
In the 1940s, most of West Virginia’s labor force was employed by goods-producing industries. Just under 30% of West Virginia’s non-farm employment
was in mining. These traditional, blue-collar jobs began to disappear in the
1950s. Between 1940 and 1960, goods-producing industries lost 30,000 jobs.
An additional 53,000 goods-producing jobs were lost by 1989. See Table 3.
TABLE 3. Employment
(in thousands) in Non-Agricultural Industries in West Virginia, 1940-1989a
Industry
Mining
Construction
1940
1950
118
123
1960
1970
56
50
1980
66
1989
Change
(1940-89)
33
-85
11
20
18
29
36
25
+14
100
131
125
127
117
88
-12
229
274
199
205
219
146
-83
Transportation, Communications, Utilities
39
54
44
42
43
37
-2
Trade
54
83
85
92
129
145
+91
8
10
13
16
22
24
+16
Services
28
44
51
67
100
138
+110
Government
43
60
68
96
133
126
+83
171
251
261
312
427
469
+296
400
524
460
517
646
615
+215
Manufacturing
Goods-Producing Industries Total
Finance, Insurance, and Real Estate
Service-Producing Industries Total
Total Nonfarm Employment
Base Data: U.S. Bureau of Labor Statistics; Source: Workforce West Virginia, Department of Commerce
a. Industry classification based on the Standard Industrial Classification (SIC) system.
Anderson Economic Group, LLC
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West Virginia’s Economy: Historical Perspective
While traditional blue-collar jobs have been lost, service industry employment
has steadily grown in the state. In 1940, 43% of West Virginia’s labor force held
a service sector job. By the end of the 1980s, this share had increased to 62%.
Between 1940 and 1960, service-providing industries, such as wholesale trade,
hospitality, and real estate, created more jobs (90,000) than were lost in goodsproducing industries. See Table 3 as well as Appendix Table D-1 for details.
Statewide Industry Employment 1990-2005
West Virginia has experienced the same employment patterns in the last 15
years as it experienced in the previous 50 years. In 2005, employment in manufacturing and mining was lower than it was in 1990, while employment in service-providing industries was higher. Most recently, mining employment has
grown slightly, but the overall decline in goods-producing industries has continued. See Table 4 below and Appendix Table D-2.
TABLE 4. Employment
(in thousands) in Non-Agricultural Industries in West Virginia, 1990-2005a
Industry
1990
1995
2000
2005
Change
(1990-2005)
Mining
34
28
21
26
Construction
28
33
34
37
+9
1.8%
Manufacturing
82
78
76
62
-20
-1.9%
144
139
131
125
-19
-1.0%
Goods-Producing Industries Total
Trade, Transportation, Utilities
-8
Annual %
Change,
1990-2005
-1.8%
136
144
145
139
+3
0.2%
Information
12
12
14
11.6
-0.4
-0.2%
Finance, Insurance, and Real Estate
26
28
31
30
+4
0.6%
Servicesb
185
228
271
298
+113
3.2%
Government
127
136
143
144
+17
0.8%
486
549
605
622
+136
1.7%
630
688
736
747
+117
1.1%
Service-Producing Industries Total
Total Nonfarm Employment
Base Data: U.S. Bureau of Labor Statistics; Source: WorkForce West Virginia, Department of Commerce
a. Employment numbers are based on the North American Industrial Classification System (NAICS). NAICS classification of industries differs slightly from the previous SIC system. For this reason, we present historical SIC employment data separately (see Table 3) from the NAICS employment data.
b. “Services” includes employment in four service categories: Professional and Business; Education and Health; Leisure and Hospitality; and Other.
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West Virginia’s Economy: Historical Perspective
Coal Mining
As Figure 2 illustrates, the total number of people employed in the mining
industry has steadily declined since the late 1940s. This trend reversed briefly
during the energy crisis of the 1970s, but the steady decline resumed in the
1980s. By 2005, less than 4% of West Virginia’s labor force worked in coal
mines.
Despite declines in employment, the coal industry has remained competitive
and has seen output of coal increase steadily since the late 1970s. After World
War II, mining machines, conveyor belts, and other advances improved productivity and increased tonnage. This increased productivity meant that more coal
could be extracted with fewer workers.
The loss of these mining jobs has caused hardship for many West Virginians.
Good-paying jobs in service-producing industries often require more education
and skills; these are often harder for older workers to acquire. As noted in later
sections, lower income and higher unemployment was the result for many as
West Virginia’s economy transitioned away from mining and into service industries.
FIGURE 2.
Coal Production and Employment in West Virginia
As shown by Figure 2, coal production in West Virginia has remained fairly consistent over time,
but productivity gains mean far fewer employees are now needed to extract just as much coal.
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West Virginia’s Economy: Historical Perspective
LABOR FORCE
Population Trends. West Virginia’s population has historically been tied to
employment in the coal mining industry. West Virginia’s population peaked in
1950 at a little over 2 million. Between 1950 and 1960 when employment in
coal mining fell by 60%, the state’s total population also fell by 7.2%. State population climbed 11.8% during the energy crisis of the early-to-mid 1970s when
employment in coal mining increased, but declined again during the recession
of the early 1980s. In 2004, 1.8 million Americans called West Virginia home.
FIGURE 3.
Population by Decade, West Virginia, 1900-2000
West Virginia’s population grew rapidly in the early part of the century, and peaked around
1950. Since that time, population trends have closely followed employment in the mining industry
(as shown in Figure 2).
During the contraction of goods-producing industries, the less experienced, and
often younger, workers were the first to lose their jobs.2 Many of these workers
left the state to find a new job. College-educated young adults have also left the
state in search of employment. As a result, West Virginia has seen its share of
elderly population rise steadily since World War II. In 1940, 5% of the population was over 64 years. In 2000, 15% of the population was in this age demographic. Meanwhile, the percentage of persons under the age of 15 has declined
during this same time period (see Figure 4).
2. Dilger, Robert Jay, and Tom Stuart Witt [ed]. West Virginia in the 1990s: Opportunities for
Economic Progress. West Virginia University Press, 1994, p. 59.
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West Virginia’s Economy: Historical Perspective
In 2000, 66% of West Virginia’s population was between the ages of 15 and 64
years. Labor force participation (employed persons as a percentage of the civilian population 16 years +) was 55% in 2004, well below the national average.
FIGURE 4.
Population Growth by Age Group in West Virginia, 1940-2000
As shown by Figure 4, West Virginia’s population has aged since 1940. A larger share of the
state’s population was over the age of 64 years in 2000 than in 1940.
Unemployment. The unemployment rate in West Virginia has historically been
higher than that of the nation. During the recession of the early 1980s, when
West Virginia lost over 63,000 jobs, the unemployment rate reached as high as
17.4%. During the early 1990s, the unemployment rate in West Virginia was
consistently four percentage points higher than the national level.
In recent years, the unemployment rate difference between West Virginia and
the U.S. has narrowed. In fact, West Virginia in some months has had a lower
unemployment rate than the nation.
The I-79 Technology Corridor has consistently had lower unemployment than
the state of West Virginia since the end of 1997. The unemployment rate has
continued to fall in this region resulting in the Technology Corridor having a
substantially lower unemployment rate than the nation, state, and north-central
region. See Figure 5.
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West Virginia’s Economy: Historical Perspective
FIGURE 5.
Unemployment Rate Comparison
As shown by Figure 5, the unemployment rate in the I-79 Tech Corridor has fallen steadily in the past 10 years. Unemployment
in the Tech Corridor is well below that of the state, nation, and region.
Educational Attainment. Historically, West Virginia’s population has had
lower levels of educational attainment than the national average. The share of
the nation’s and West Virginia’s population that have completed a high school
degree has steadily grown since 1940. In recent years, the gap in educational
attainment between the nation and West Virginia has narrowed.
A more unsettling finding is that for the state as a whole, the percentage of
adults 25 years and older who have completed a bachelor’s or higher degree is
well below the national level. The gap between the U.S. and the state of West
Virginia has grown in recent years. Part of the lower educational attainment in
West Virginia can be explained by its greater number of persons over the age of
65 years who entered the workforce at a time when a college education was less
common. Even so, lower educational attainment in the state is problematic as
high-paying jobs in today’s economy often require more education.
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West Virginia’s Economy: Historical Perspective
FIGURE 6.
Percent of Population 25 Years + with a High School Diploma or More
FIGURE 7.
Percent of Population 25 Years + with a Bachelor’s Degree or More
As shown in the two charts above, West Virginia has followed the national trend of a rise in educational attainment. However, educational attainment in West Virginia remains below the
national average.
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West Virginia’s Economy: Historical Perspective
INCOME DATA
Along with lower educational attainment and higher rates of unemployment,
West Virginia has had lower real per capita income than the nation. The difference in real per capita income widened in the 1980s and continues today.
Nationally, per capita income was $34,586 in 2005, while in West Virginia it
was $27,215.
FIGURE 8.
Real Per Capita Personal Income, West Virginia v. United States
As shown above, real per capita income is lower in West Virginia than nationally. The difference
in real per capita income widened in the 1980s, and persists today.
Not surprisingly, West Virginia’s poverty rate has been higher than the national
level. The loss of high-paying jobs in coal mining pushed many more families
into poverty in the 1960s and 1980s. During periods of high demand for coal,
jobs were more plentiful and the poverty rate fell, but it remained significantly
higher than the national poverty rate.
TABLE 5. Poverty
Rate in West Virginia v. United States, 1969-2004
1969
1979
1989
1999
2004
West Virginia
22.2%
15.6%
19.7%
16.3%
16.1%
United States
13.7%
12.4%
13.1%
11.9%
12.4%
Source: U.S. Census Bureau
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Emergence of the Technology Industry
III. Emergence of the Technology Industry
The need to diversify the West Virginia economy had become readily apparent
by the end of the 1980s. Traditional manufacturing jobs were rapidly declining
as productivity enhancing technologies meant fewer workers were needed, and
the state’s traditionally blue collar, labor intensive workforce was struggling to
find new employment. Concurrently, the nation was on the verge of a period of
rapid technological advancement. Advances in computer science, engineering,
and medicine were about to transform “business as usual,” and offered significant opportunities to those on the leading edge of technology.
Two West Virginians, Senator Robert C. Byrd and Congressman Alan B. Mollohan, saw the aformentioned economic struggles as an opportunity to aggressively pursue the development of the technology industry in West Virginia.
Over the years, their efforts, combined with the work and investment of many
others, has culminated in the creation of an impressive hub of technological
activity in north-central West Virginia.
In the late 1970’s Senator Byrd initiated the Software Valley movement, one of
West Virginia’s first coalitions for economic development. In 1987, Congressman Mollohan began to identify federal and commercial opportunities for West
Virginia’s small businesses and created the First Congressional District Procurement Team. During their first conference in 1990, Congressman Mollohan personally attended, and invited a number of high ranking NASA officials and 37
large prime contractors from Washington D.C. This marked the beginning of the
“Teaming to Win” Conference, an annual event designed to promote the growth
and development of small companies throughout West Virginia.3
Byrd and Mollohan continued to pursue efforts to promote West Virginia as a
center for federal technology projects and a home for established and newly
started private sector technology firms. There was a clear need for an organization that could help West Virginia’s technology businesses with commercializing their research and development, and to better leverage opportunities with the
region’s federal technology centers such as the FBI, the Department of Energy,
and NASA. This led to the creation of the West Virginia High Technology Consortium (WVHTC) in 1990. The Consortium began as a loose affiliation of six
companies with a common goal of encouraging the growth of the technology
industry throughout West Virginia. As part of the Department of Defense’s
Mentor-protégé Program, larger companies like Electronic Warfare Associates
(EWA), Mantech, and Lockheed Martin, served as mentors to smaller, upcoming technology companies in the region.4
3. “The First Decade” Synopsis of the History of Teaming to Win, www.teamingtowin.org
4. Department of Defense Office of Small Business Programs, Mentor protégé Program web site.
Available at: http://www.acq.osd.mil/osbp/mentor_protege.
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Emergence of the Technology Industry
In 1993, the WVHTC Foundation was established to administer grants and
funds for various projects undertaken by the Consortium. In the same year, the
NASA IV & V facility opened. By the time the Consortium and Foundation
merged in 1996, they had an official headquarters in the Alan B. Mollohan Innovation Center, and over 100 affiliate members. By 2000, the WVHTC Foundation had reached 150 affiliate members and was strategically re-organizing to
provide business assistance to start-up technology companies.5
THE FEDERAL
ANCHORS
From the beginning, and throughout the continued growth of the technology
industry in north-central West Virginia, the relationship between small and large
businesses has played an important role in technological innovation and development. Additionally, several federal agencies have served as “anchors” for the
region by providing jobs, resources, partnerships, and cutting-edge research. A
closer look at these agencies follows.
National Energy Technology Laboratory. The National Energy Technology
Laboratory (NETL) site is located on the northern edge of Morgantown, West
Virginia. The Morgantown lab is one of only five Department of Energy NETL
labs throughout the United States. NETL sites serve a unique role compared to
other DOE labs: they function as insight science and technology research centers and as the administrators of nearly 1,400 contracts with external organizations.
The lab in Morgantown was the first NETL lab. In 1954 the Morgantown NETL
facility was referred to as the Appalachian Experiment Station, originally a part
of the Department of Interior. In 1976, after the Department of Energy was
formed, the facility expanded to become an “Energy Research Center.” In 1999
the Center was elevated to National lab status and officially renamed the
National Energy Technology Laboratory.
NETL’s Morgantown location has been a leading research center for cleaner
coal technology (CCT) since the early 1990’s. Regionally, NETL provides support for initiatives including clean and affordable energy, high technology, small
businesses, education, and community support and improvement.6 In 2000, the
Morgantown NETL received a $150 million dollar expansion in their budget for
the research and development of cleaner coal technology.7
5. The State Journal: Technically Speaking, Dec. 15, 2005.
6. U.S. Department of Energy, Office of Fossil Energy, National Energy Technology Laboratory:
Regional facts.
7. United Mine Worker’s Journal, March-April, 2001.
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Emergence of the Technology Industry
Federal Bureau of Investigation, Criminal Justice Information Services
Division. In January 1991, the FBI purchased 986 acres of land in Clarksburg,
West Virginia. In 1995, this became home to the FBI’s Criminal Justice Information Services Division (CJIS). The main building of the CJIS complex is
500,000 square feet, 100,000 of which houses a computer center. The CJIS is
the central repository for criminal justice information services in the FBI and is
the largest division within the FBI. The CJIS is home to several of the FBI’s
information systems, including the National Crime Information Center, and the
Integrated Automated Fingerprint Identification System (IAFIS).8
The CJIS is not only an asset to criminal justice and law enforcement agencies
throughout the U.S., but it also has made its mark on the region. The CJIS has
been a valuable asset for West Virginia University’s program for forensic sciences.9 In 2000, the CJIS contracted Lockheed Martin to provide automated
identification and information technology operations and maintenance services.
To support the CJIS personnel with the new information technology, Lockheed
Martin teamed up with companies in north-central West Virginia such as SAIC,
DN America, and Azimuth.10
National Aeronautics and Space Administration (NASA). Fairmont West
Virginia is home to the NASA Independent Verification and Validation (IV&V)
Facility. The IV&V Facility was established in 1993 as part of an agency-wide
strategy to provide the highest achievable levels of safety and cost-effectiveness
for mission critical software. Since its beginning, the Facility’s efforts have contributed to NASA’s improved safety record and recently took part in NASA’s
Mars Exploration Rover (MER) project.11 The facility’s main objectives are to
provide IV&V services, research, and outreach. The facility provides NASA
with cutting-edge safety critical software, while the facility’s research improves
software and assurance methods, practices, and tools. The facility undertakes
research to expand IV&V’s research presence in practical and applied initiatives. Lastly, the IV&V facility is committed to community outreach through its
commitment to inspire, inform, and pursue collaborations throughout the community, and West Virginia as a whole.
NASA has also established several educational initiatives within the region. In
1991, NASA established the West Virginia Space Grant Consortium, whose
mission is to promote research in science and engineering, along with high-tech
8. CJIS web site, available at: http://www.fbi.gov/hq/cjisd/about.htm.
9. West Virginia University forensics program web site; available at: http://www.wvu.edu/
~forensic/.
10.Lockheed Martin Press Releases, Nov. 9, 2000.
11. “Mars Exploration Rover and Independent Verification and Validation,” Journal of Innovation, Spring/Summer, 2004.
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Emergence of the Technology Industry
industries and workforce development throughout the State. The Consortium is
made up of five universities and six colleges in the State, as well as the WVHTC
Foundation and the WV Development office.12 NASA also has two prominent
centers at Wheeling Jesuit University. The National Technology Transfer Center
(NTTC) began in 1989, and helps to coordinate and optimize development
opportunities for U.S. industries, federal labs, and universities. The National
Technology Transfer Center and the Center for Educational Technologies (CET)
opened in 1994, with a main mission to enhance the teaching and learning of
math, science, and technology.
The National Institute for Occupational Safety and Health (NIOSH).
NIOSH is the federal agency responsible for conducting research and making
recommendations for the prevention of work-related injury and illness. NIOSH
has maintained a research presence in Morgantown since the Institute's creation
under the Occupational Safety and Health Act of 1970.
Today there are three NIOSH divisions based in Morgantown: the Division of
Respiratory Disease Studies, the Division of Safety Research, and the Health
Effects Laboratory Division. These divisions conduct research to prevent workrelated lung diseases, to prevent work-related injuries, and to prevent adverse
work-related health effects through advanced research. The NIOSH research in
Morgantown is performed in conjunction with complementary research at other
NIOSH locations, and as part of NIOSH's strategic research initiatives, including the National Occupational Research Agenda and Research to Practice.
NIOSH is part of the U.S. Centers for Disease Control and Prevention. Some
NIOSH/Morgantown research programs, such as research to prevent coal workers pneumoconiosis, have deep roots in programs conducted in Morgantown
prior to 1970 by NIOSH's predecessor health agencies.
One of the most significant undertakings of the Division of Respiratory Disease
Studies is administering the Coal Workers Health Surveillance Program. The
Health Effects Laboratory Division (HELD) uses high-tech solutions to conduct
biological research, control workplace hazards, and conduct health communications studies.13
Department of Defense, Biometrics Fusion Center. The Biometrics Fusion
Center (BFC) is a division of the Department of Defense’s Biometrics Management Office (BMO). The Center is currently in a temporary location in Clarksburg area, but will move into its 100,000 square foot permanent facility in
Clarksburg within the next few years.
12.“Space Grant Consortium Offers Workforce Development Opportunities,” Journal of Innovation, Winter/Spring, 2005.
13.The NIOSH web site is available at: http://www.cdc.gov/niosh.
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Emergence of the Technology Industry
The BFC is responsible for researching, developing, and administering various
biometrics programs that are applied toward international, national, and commercial security. The Department of Defense uses biometrics such as finger
prints, iris scans, and facial imagery to positively identify people. Some of their
largest biometric systems are the Biometric Identification System for Access
(BISA) and Automated Biometric Identification System (ABIS). The BISA system was developed in partnership with Computer Sciences Corporation, SRA,
and Azimuth Inc. Together with the Department of Defense, these West Virginia
companies designed a biometric “badging system” for use in hiring and screening Iraqi nationals working in protected camps.14 The ABIS system helps coordinate biometric data collected from enemy combatants to ensure that threats to
national security are positively and promptly identified.
Biometrics is not only a growing field for the Department of Defense, but it is a
growing industry in West Virginia. The BFC works closely with WVU’s biometrics degrees program, while the BMO funds introductory and Master’s programs in Information Assurance and Biometrics at WVU. Also, in 2002, the
BFC awarded the majority of a $155 million biometics contract to companies
within the region.15
14.The Charleston Gazette: Guard testing biometric ID gear, Mar. 17, 2006.
15.According to a Galaxy Global Corporation Press Release from 2002, the WVHTC Foundation,
TMC Technologies, Azimuth, Galaxy Global Corporation, New-Bold Enterprises, Inc. and the
WVU Institute of Technology comprised 51 percent of the contract. The other 49% of the contract was awarded to two international companies; (SAIC and SYTEX). SAIC has 6 locations
in West Virginia.
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North-Central West Virginia’s Technology Industry Today
IV. North-Central West Virginia’s Technology
Industry Today
DEFINING THE
TECHNOLOGY
INDUSTRY
To analyze an industry’s size, scope, and role in a regional economy, it is necessary to first define the industry. To do this for the technology industry, we use a
rigorous definition composed of specific industrial sectors identified by their
North American Industry Classification System (NAICS) codes, which is how
the United States Census reports industry data.
Table 6 below presents our definition of the technology industry, by cluster. The
methodology we employed to define the technology industry is described in
greater detail in “Appendix A: Technology Industry Definition Methodology.”
TABLE 6. Definition
NAICS
of the Technology Industry by Cluster
Industry Title
Advanced Manufacturing
3329
Other Fabricated Metal Product Manufacturing
3331
Agriculture, Construction, & Mining Machinery Manufacturing
3332
Industrial Machinery Manufacturing
3333
Commercial & Service Industry Machinery Manufacturing
3336
Engine, Turbine & Power Transmission Manufacturing
3339
Other General Purpose Machinery Manufacturing
3345
Navigational, Measuring, Electromedical, & Control Instruments Manufacturing
3353
Electrical Equipment Manufacturing
3359
Other Electrical Equipment & Component Manufacturing
3361
Motor Vehicle Manufacturing
3362
Motor Vehicle Body & Trailer Manufacturing
3363
Motor Vehicle Parts Manufacturing
3364
Aerospace Product & Parts Manufacturing
3369
Other Transportation Equipment Manufacturing
Chemical and Material
3241
Petroleum & Coal Products Manufacturing
3251
Basic Chemical Manufacturing
3252
Resin, Synthetic Rubber, Artificial Synthetic Fibers & Filaments Manufacturing
3253
Pesticide, Fertilizer, & Other Agricultural Chemical Manufacturing
3255
Paint, Coating & Adhesive Manufacturing
3256
Soap, Cleaners & Toilet Preparation Manufacturing
3259
Other Chemical Product & Preparation Manufacturing
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North-Central West Virginia’s Technology Industry Today
TABLE 6. Definition
NAICS
of the Technology Industry by Cluster (Continued)
Industry Title
Information Technology
3341
Computer & Peripheral Equipment Manufacturing
3342
Communications Equipment Manufacturing
3343
Audio & Video Equipment Manufacturing
3344
Semiconductor & Other Electronic Component Manufacturing
3346
Manufacturing & Reproducing Magnetic & Optical Media
5112
Software Publishers
5161
a
Internet Publishing & Broadcasting
5171
Wired Telecommunications Carriers
5172
Wireless Telecommunications Carriers (except Satellite)
5173
Telecommunications Resellers
5174
Satellite Telecommunications
5179
Other Telecommunications
5181
Internet Service Providers & Web Search Portals
5182
Data Processing, Hosting, & Related Services
5415
Computer Systems Design & Related Services
b
Other Technologies
2111
Oil & Gas Extraction
3254
Pharmaceutical & Medicine Manufacturing
3391
4234
c
Medical Equipment & Supplies Manufacturing
Professional and Commercial Equipment & Supplies Merchant Wholesalers
5413
Architectural, Engineering & Related Services
5417
Scientific R&D Services
Note: This definition uses 2002 NAICS codes. The 1998-2002 data used in our analysis is provided
by 1997 NAICS codes. The U.S. Census Bureau introduced 2002 NAICS codes to account for new
and emerging industries that could not be well classified using the 1997 definitions.
a. Year 2002 NAICS 5161, 5171, 5172, 5173, 5174, and 5179 were substituted with year 1997
NAICS 5133 for 1998-2002 data analysis.
b. Year 2002 NAICS 5181 and 5182 were substituted with year 1997 NAICS 5140 for 19982002 data analysis.
c. Year 2002 NAICS 4234 was substituted with year 1997 NAICS 4214 for 1998-2002 data
analysis.
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North-Central West Virginia’s Technology Industry Today
Federal Agency Technology Cluster. Note that our above definition does not
include NAICS codes relating to public administration. This is excluded as our
data source for employment and payroll information (U.S. Census Bureau
County Business Patterns) does not report these categories.
Thus, our base definition would fail to account for those working in federal
agencies such as NASA, the Department of Defense, and the FBI. Recognizing
that north-central West Virginia is home to several such federal agencies whose
work is highly integrated with technology, we expand our definition of the technology industry in north-central West Virginia to include five federal technology anchors located in the region. These are shown in the table below.
TABLE 7. Federal
Technology Anchors Included in Technology Industry Definition
Federal Technology Anchorsa
DoD, Biometrics Fusion Center
FBI, Criminal Justice Information Services Division (CJIS)
CDC, National Institute for Occupational Safety and Health (NIOSH)
DoE, National Energy Technology Laboratory (NETL)
NASA, Independent Verification and Validation Facility (NASA IV & V)
a. U.S. Census County Business Pattern data excludes federal employees. As such,
we include in this definition key federal facilities in the region that significantly
contribute to the technology industry in north-central West Virginia.
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North-Central West Virginia’s Technology Industry Today
TECHNOLOGY
EMPLOYMENT: THE
BIG PICTURE
The composition of north-central West Virginia’s technology industry, by cluster, is shown in Table 8, “2006 Employment and Average Wage Estimates by
Technology Cluster.” The region has a diverse technology base, with significant
employment in each of the clusters. Also notable is that the two largest clusters
(chemical and materials and information technology), which account for a combined 47.6% of technology industry employment in the region, led the industry
in terms of average wages.
In 2006, north-central West Virginia’s technology industry as a whole had over
18,000 jobs. These jobs, on average, paid $53,325 per year.16 Just over 50% of
these jobs, including all of the federal anchor jobs, are found within the I-79
Technology Corridor. The rest are located throughout the region.
TABLE 8. 2006 Employment and Average Wage Estimates by Technology Cluster
North-Central WV
Employment
I-79 Corridor
Employment
Regional
Average
Wage
Advanced Manufacturing
2,874
1,237
$49,285
Chemical and Material
4,402
184
$66,180
Information Technology
3,307
1,525
$43,355
Other Technology
4,186
3,126
$54,903
Federal Technology Anchors
3,271
3,271
$47,654
Total Technology Industry
18,049
9,352
$53,325
Source: Anderson Economic Group, LLC
As shown in Figure 9, “Technology Industry’s Share of Total Employment and
Total Payroll in North-Central West Virginia, 2006,” on page 25, technology
industry employment accounts for 9% of all jobs in north-central West Virginia,
and 16% of all payroll. This clearly indicates that jobs in the industry pay above
average. The same is true in the I-79 technology corridor, where 11% of jobs are
in technology, and 19% of payroll is generated by the sector. See Figure 10,
“Technology Industry’s Share of Total Employment and Payroll in the I-79
Technology Corridor, 2006.”
For further information on the data used in these estimations, and a table of
technology industry employment detailed at the NAICS code level, please see
“Appendix C: Technology Industry Data.”
16. By comparison, the average wage in West Virginia, across all industries was $27,449 in 2004.
It was $36,967 for the United States.
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North-Central West Virginia’s Technology Industry Today
Technology Industry’s Share of Total Employment and Total Payroll
in North-Central West Virginia, 2006
FIGURE 9.
On the left we see that 9% of all employment in north-central West Virginia is in the technology sector.
This 9% of the employees however, earn 16% of all wages, as shown by the pie chart on the right.
Technology Industry’s Share of Total Employment and Payroll in
the I-79 Technology Corridor, 2006
FIGURE 10.
In the I-79 Technology Corridor 11% of all employment is in the technology sector. This 11% of
employees earns 19% of all wages, as shown by the pie chart on the right.
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North-Central West Virginia’s Technology Industry Today
Advanced Manufacturing Cluster
TECHNOLOGY
INDUSTRY CLUSTERS
Businesses in north-central West Virginia’s advanced manufacturing cluster
develop and utilize technologies for electrical, mechanical, automotive, aerospace, and other advanced manufacturing processes. This includes carbon and
graphite product manufacturing; manufacturing of office machines; industrial
manufacturing equipment; air and gas compressors; fluid power cylinders (i.e.,
hydraulic and pneumatic); agricultural and mining equipment manufacturing;
aerospace product and part manufacturing; navigational and electromedical
equipment manufacturing; and other such businesses.
As shown in Table 8, “2006 Employment and Average Wage Estimates by
Technology Cluster,” on page 24, there are 2,874 advanced manufacturing jobs
in north-central West Virginia, and on average, the jobs pay an annual wage of
$49,285. 43.0% of these jobs are within the I-79 Technology Corridor.
Chemical and Material Cluster
The chemical and material cluster includes businesses engaged in the production of petrochemicals, inorganic chemicals and gases, plastics and resins,
paints and varnishes, and explosives.
Jobs in this cluster pay an average annual wage of $66,180, making this the
technology cluster with the highest average wage in north-central West Virginia’s technology industry. The chemical and materials cluster is also the largest technology cluster in north-central West Virginia, comprising almost a
quarter (24.4%) of the technology industry jobs within the region. Most of these
jobs, however, are located outside of the I-79 Technology Corridor. Only 184, or
4.2% of the total jobs in the cluster, are located in the three counties that comprise the I-79 Technology Corridor.
Information Technology Cluster
The information technology cluster is comprised of electronics, computer, and
telecommunications businesses. This includes manufacturers of computers and
computer peripheral equipment; radio, television, and wireless communications
equipment; and electronic capacitor, resistor, and connector devices. Also
included are software publishers, wired and wireless telecommunication providers, internet service providers, and custom computer programming services.
The Information Technology cluster employs 3,307 people in north-central
West Virginia, and pays an average annual wage of $43,355. These jobs are
found throughout the area, with 46.1% of the jobs in the I-79 Corridor, and the
remaining 53.9% dispersed throughout the rest of the region. Within the Corridor, information technology is the largest cluster excluding the federal anchors.
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North-Central West Virginia’s Technology Industry Today
Other Technology Cluster
Businesses not classified into a specific technology cluster, but that use,
develop, or support technology, are included in the “Other Technologies” cluster. Businesses in this cluster include architectural and engineering services, as
well as businesses that develop and use technology in the manufacturing of life
sciences equipment such as surgical appliances and medical instruments, basic
organic chemicals, and pharmaceuticals. The cluster also includes providers of
research and development in the physical, engineering, and life sciences.
This is the second largest cluster in the region, employing 23.2% of all technology industry employees in north-central West Virginia. The majority of this
employment (74.7% or 3,126 jobs) is found within the I-79 Technology Corridor. Jobs within this cluster pay an annual average wage of $54,903, second
only to the chemical and material cluster among technology industry clusters.
Federal Technology Anchors
As discussed in “Emergence of the Technology Industry” on page 16, the work
of Senator Byrd, Congressman Mollohan, and many others to bring federal
facilities with a technology concentration to the region provided the foundation
for north-central West Virginia’s technology industry. These federal anchors not
only were instrumental in the early days, but continue to serve as an important
part of the region’s technology industry, as they employ 3,280 federal employes
in the region, and pay an average wage of $47,654. The federal anchors include:
• The Department of Energy’s National Energy Technology Laboratory (DoE
NETL) in Morgantown (see discussion on page 17).
• The Federal Bureau of Investigation’s Criminal Justice Information Services
Division (FBI CJIS), located in Clarksburg (see page 18 for details).
• The National Aeronautics and Space Administration’s Independent Verification
and Validation Facility (NASA IV & V), in the I-79 Technology Park in Fairmont (more on page 18).
• The Department of Defense’s Biometric Fusion Center in Bridgeport (see
page 19 for further information).
• The Center for Disease Control & Prevention’s National Institute for Occupa-
tional Safety and Health laboratories (CDC NIOSH) in Morgantown (details on
page 19).
Note that to avoid double counting employees, these figures represent only
those employed directly by the federal government. Contractors from firms such
as Azimuth, Mantech, and others who work at these federal facilities are
accounted for in their firms’ respective cluster.
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Economic Benefits of the Technology Industry
V. Economic Benefits of the Technology Industry
In this section we provide estimates of the economic impact that the technology
industry in north-central West Virginia has on the state as a whole. We look first
at the impact stemming from technology company expenditures, both on payroll
and on goods and services. We consider direct economic impacts, such as payments to employees or to office supply stores. We also consider indirect benefits, such as the economic activity that occurs as a result of that office supply
store being able to hire additional staff, or a car dealership expanding to accommodate increased demand resulting from technology firm employees moving to
the region.
We next look separately at economic impacts that have stemmed from construction related to the technology industry. Specifically, we analyzed four projects
in the I-79 technology park and estimated the economic impact that was generated by these one-time capital projects. Again, both direct and indirect impacts
were assessed.
Finally, we conclude by presenting some of the intangible benefits that are at
least in part related to the growth of the region’s technology industry. These
include socio-economic benefits like higher educational attainment, household
incomes, and stronger populational growth. First, however, we begin with a
brief discussion of what an “economic impact” truly is.
DEFINITION OF
ECONOMIC IMPACT
Anderson Economic Group has rigorously completed and critiqued numerous
economic impact analyses. We depart from many other practitioners by insisting
on a specific, conservative, and realistic definition of “economic impact.”
We define an economic impact as bona fide economic activity directly or indirectly caused by the subject, which in this case is the technology industry in
north-central West Virginia. In calculating the effects, we take into account both
costs and benefits. In particular, we subtract from the total net benefit figure any
reductions in economic activity due to displacement or substitution effects.
Activity that merely replaces or displaces other activity that would have
occurred in the region is subtracted out. We also use caution only to count
money generated from outside of the area, and spent locally, as a true economic
impact.
The resulting findings are much more conservative, and realistic, than many
other reports of this type, as they fail to subtract costs, ignore substitution
effects, or exaggerate benefits. In this report, we provide only the net benefit
figures.
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Economic Benefits of the Technology Industry
TECHNOLOGY
INDUSTRY ECONOMIC
IMPACTS
Our assessment addresses two primary sources from which economic impacts
associated with the technology industry in north-central West Virginia are
derived: 1) regular business operations, including payroll and non-payroll operating expenditures, and 2) expenditures associated with the construction of
facilities for the technology industry.
Findings: Economic Impact of Technology Industry Operations
This portion of our economic impact assessment focuses only on the regular
annual operating expenditures of technology industry employers. This provides
a truer sense of the annual economic impact stemming from the industry, and is
not inflated by one-time capital expenditures such as construction or equipment
investments.
TABLE 9. Estimated
Statewide Economic Impact of North-Central West
Virginia's Technology Industry
Direct Economic Impact
Payroll Expenditures
$962,044,627
Operating Non-Payroll Expenditures
Substituted Economic Activity
$2,913,922,159
20%
Direct Economic Impact from Payroll Expenditures
$769,635,702
Direct Economic Impact from Other Operating Expenditures
$2,331,137,727
Total Direct Economic Impact
$3,100,773,429
Indirect Economic Impact
Payroll Multiplier
0.36
Non-Payroll Operating Expenditure Multiplier
0.77
Indirect Economic Impact from Payroll Expenditures
Indirect Economic Impact from Other Operating Expenditures
$275,864,373
$1,799,867,476
Total Indirect Economic Impact
$2,075,731,849
Total Economic Impact (2006)
$5,176,505,278
Source: Anderson Economic Group, LLC
We estimate that the north-central West Virginia technology industry had a total
economic impact of $5.2 billion on the State of West Virginia in 2006. Details of
this impact are shown in Table 9, and our methodology is described beginning
at “Economic Impact Methodology” on page 33.
Included in the total economic impact is a direct economic impact of $3.1 billion. This direct impact is comprised of $769.6 million in wages paid directly to
technology industry employees, and $2.3 billion in operating expenditures made
by technology firms in the region, and paid to non-technology firms in the state.
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Economic Benefits of the Technology Industry
Also included in the total is an indirect economic impact of $2.1 billion. This
stems from what is commonly know as the multiplier effect, by which each dollar of direct impact indirectly triggers other new economic activity in the area.
For example, when a technology company buys supplies from a local retailer,
that retailer is able to support paying more in wages, which in turn means more
personal income to be spent on groceries, clothing, entertainment, etc.
Applying our payroll multiplier of 0.36 to the direct payroll impact of $769.6
million translates to an indirect impact from payroll of $275.9 million. The
remaining $1.8 billion in indirect economic impact stems from applying the
non-payroll operating expenditure multiplier of 0.77 to the direct other operating expenditures.
Findings: Direct and Indirect Economic Impact of Construction Activity
The total construction activity that has occurred due to the growing technology
industry is too wide-spread to fully recognize and evaluate, and the primary
value of the projects is that they have enabled the industry to grow, thus providing larger and lasting economic benefits. However, specific projects in the I-79
Technology Park can be reviewed to provide a measure of economic impacts
stemming directly from the construction.
Our findings pertaining to the economic impact associated with construction
activity in the I-79 Technology Park include:
• In total, some $179.0 million (2006 dollars) has been, or will be, spent on the
construction projects for the Innovation Center, the Training Center, the
WVHTC Foundation Research Center, and the two new buildings currently
under construction.
• Approximately 62% of all construction-related expenditures were made directly
in West Virginia, with the remaining portion being spent on goods and services
provided by out of state sources (by way of example, steel from Pittsburgh, or
engineering and design consulting from Washington D.C.). Construction expenditure information was provided to us by the WVHTC Foundation and ISR, Inc.
Construction Economic Impacts. The total economic impact stemming from
these construction projects, adjusted to 2006 dollars, is estimated at $311.6 million, as shown in Table 10.
TABLE 10. Summary of I-79
Technology Park Construction Impacts (2006 dollars)
Direct Economic Impact
$111,269,431
Indirect Economic Impact: Industry Output
$122,396,374
Indirect Economic Impact: Earnings
Total Economic Impact
$77,888,602
$311,554,407
Source: Anderson Economic Group, LLC
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Economic Benefits of the Technology Industry
The direct economic impact is the amount of total expenditures that stayed
within the state. At 62% of $179.0 million in total expenditures, there is a direct
economic impact of $111.3 million stemming from construction. Included in
this are all direct payments to other businesses and their employees.
The indirect economic impact includes additional demand that flows throughout
other industries, and the related additional earnings paid to households. In this
case, the indirect economic benefits of construction come to $122.4 million in
industry demand and $77.9 million in additional earnings.
Concluding Note. It is important to recognize that this estimated economic
impact relates only to the one time construction expenditures associated with
the building. In a broader sense, the construction should be understood to have a
much more significant impact as the buildings have enabled day-to-day technology industry operations that allow the economic impact discussed in “Technology Industry Economic Impacts” on page 29 of this report to occur.
SOCIOECONOMIC
BENEFITS
In addition to the quantifiable economic benefits estimated above, the development of the technology industry in north-central West Virginia has also qualitatively enhanced the region in a number of ways.
Higher Educational Attainment. The residents of West Virginia’s I-79 Technology Corridor and Region are highly educated. In 2000, a larger share of the
north-central region’s population than the state’s population held a high school,
college, graduate, or professional degree. The difference in education levels is
apparent in the percentage of each areas’ populations with a college or higher
degree. In 2000, 19.1% of the Technology Corridor’s residents had attained a
college degree while 13.7% of the state’s population had. Further, the I-79 Technology Corridor has a higher share of its population with a graduate or professional degree than the state (8.3% v. 5.3%) and the nation (8.3% v. 7.8%). Part
of this can be explained by West Virginia University’s location in the Technology Corridor. However, many of the high-skilled, high-paying technology jobs
in the region require at least a college degree.
TABLE 11. Educational
Attainment in I-79 Corridor, Region, State, and Nation, 2000
Total
Persons 18
years+
High school
graduate and
beyond
Associate’s
degree
College
Graduate and
beyond
Graduate or
professional
degree
North-Central WV
464,720
78.6%
4.5%
14.9%
5.8%
I-79 Tech Corridor
140,815
77.8%
3.4%
19.1%
8.3%
1,406,569
75.6%
4.2%
13.7%
5.3%
209,279,149
79.7%
6.0%
22.3%
7.8%
State of West Virginia
United States
Source: U.S. Census Bureau
Analysis: Anderson Economic Group, LLC
Anderson Economic Group, LLC
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Economic Benefits of the Technology Industry
Higher Income in Technology Region. Per capita income and mean household
income are higher in the Technology Corridor than the State of West Virginia.
Income has grown at a faster rate in the Technology Corridor than in the state as
a whole and the nation. For example, between 1990 and 2000, per capita income
in the Technology Corridor grew at an average annual rate of 5.6%, while the
average annual rate was 4.6% for the state as a whole, and 4.1% nationally. Per
capita income in the I-79 Technology Corridor is 86% that of the national PCI—
up from 75% in 1990. The trend is similar with mean household incomes.
TABLE 12. Income
Measures in I-79 Corridor, Region, State, and Nation, 1990-2000
Per Capita Income
1990
2000
North-Central WV
$10,648
$16,001
I-79 Tech Corridor
$10,792
State of West Virginia
$10,520
United States
$14,420
Mean Household Income
Annual Change
(1990-2000)
Annual Change
(1990-2000)
1990
2000
4.2%
$27,303
$38,808
3.6%
$18,530
5.6%
$27,515
$45,063
5.1%
$16,477
4.6%
$27,122
$40,063
4.0%
$21,587
4.1%
$38,473
$56,675
3.9%
Source: U.S. Census Bureau
Analysis: Anderson Economic Group, LLC
Population Growth. Between 1990 and 2004, the I-79 Technology Corridor
experienced average annual growth in population of 1.8%. This growth was
faster than the national average annual growth rate of 1%, and the opposite of
the recent trend for the state as a whole. In the state, overall population dropped
slightly between 2000 and 2004.
TABLE 13. Population
in I-79 Corridor, Region, State, and Nation, 1990-2004
1990
2000
2004
Annual Change
1990-2004
North-Central WV
603,602
602,545
598,200
-0.1%
I-79 Tech Corridor
161,795
207,116
208,674
1.8%
State of West Virginia
United States
1,793,477
1,808,344
1,770,403
-0.1%
248,709,873
281,421,906
285,691,501
1.0%
Source: Anderson Economic Group, LLC
Data: U.S. Census Bureau
Lower Unemployment. As discussed earlier at “Unemployment” on page 12,
the unemployment rate gap between West Virginia and the U.S. has narrowed in
recent years. Further, The I-79 Technology Corridor has consistently had lower
unemployment than the state of West Virginia since the end of 1997. The unemployment rate has continued to fall in this region resulting in the Technology
Anderson Economic Group, LLC
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Economic Benefits of the Technology Industry
Corridor having a substantially lower unemployment rate than the nation, state,
and north-central region.
ECONOMIC IMPACT
METHODOLOGY
Economic Impact from Technology industry Business Operations. To estimate the amount of north-central West Virginia technology industry operating
expenditures that occur within the state, and the degree of the economic impact
stemming from these expenditures, we:
1.
2.
3.
4.
Used the employment and average wage data, as reported in “Technology
Employment: The Big Picture” on page 24 of this report, to approximate the
“salaries and wages” line of a hypothetical income statement for the northcentral West Virginia technology industry as a whole.
Collected financial ratios specific to the technology industry clusters, at the
4-digit NAICS level, to estimate operating expenditures using the payroll
estimates from the previous step.17 For this we used IRS Tax Statistics, as
compiled in the Almanac of Business and Industrial Financial Ratios:
2006.18 As such financial data is not available for federal anchors, we
assumed that the “other technology” ratio would apply to the federal
anchors. See Appendix E: Economic Impact Data Sheets.
Personally interviewed top managers at seven technology firms in north-central West Virginia and gathered data from them on their operating expenditures, payroll, in-state v. out-of-state spending, and other financial
information relevant to our analysis.
Adjusted non-payroll operating expenditures of the technology industry to
account for intra-industry transfers and payments made to out-of-state entities. For example, payments from an advanced manufacturing firm to an IT
firm do not produce an economic impact on the state from the technology
sector. Likewise, when an IT firm purchases software from a California company, the expenditure does not result in an economic benefit within West Virginia.19 By excluding such transactions, we account only for expenditures
made by the technology industry to other (non-technology) businesses within
17.Non-cash items that appear on an income statement, including depreciation, amortization, and
deferred compensation, were excluded from our calculations to provide a more accurate reflection of actual business expenditures.
18.Leo Troy. 2006. Almanac of Business and Industrial Financial Ratios. CCH Tax and Accounting. IRS tax statistics are available at http://www.irs.gov/taxstats/index.html.
19.Our intra-industry tranfers and out-of-state payments determination was done using information provided to us by firms that we spoke with in the region, as well as our understanding of
the industry’s structure, locations of suppliers of key inputs, and other such factors. For the
information technology, federal anchor, and other technology clusters we estimated that 15%
of the non-payroll cost of goods sold is in-state to non-technology industry businesses. Our
assumption on this for advanced manufacturing and chemical & material were 25% and 30%,
respectively. For each cluster we assumed the 85% of all advertising, benefits, and miscellaneous (other) regular expenditures were made in state and to non-technology industry firms.
Anderson Economic Group, LLC
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Economic Benefits of the Technology Industry
5.
6.
7.
the state, and thus avoid double counting expenditures. See Appendix E:
Economic Impact Data Sheets.
Accounted for the likely substitution of other economic activity that might
occur in the area if the technology industry were not present. These substitution effects, estimated to be about 20%, are subtracted from direct expenditures in the region to arrive at a net direct economic impact figure.20
Applied a final-demand earnings multiplier of 0.36 to the technology industry’s direct payroll expenditures in the region, and a final-demand output
multiplier of 0.77 to the industry’s non-payroll operating expenditures, to
determine the indirect economic impact of the industry on the State of West
Virginia.21
Summed the net direct and indirect impacts to arrive at an overall economic
impact.
The results of this analysis are available at “Findings: Economic Impact of
Technology Industry Operations” on page 29 on this report.
Economic Impact from I-79 Technology Park Construction. To evaluate
how construction expenditures in the I-79 Technology Park translate into economic impacts for the state, we:
1.
2.
3.
4.
Collected detailed construction expenditure and budget data for the following projects: WVHTC Innovation Center, the WVHTC Foundation Research
Center, WVHTC Training Center, and the new I-79 Center construction of
two buildings, which is scheduled for completion in 2007.
Met with construction supervisors and WVHTC Foundation finance and
operations staff to determine the share of overall expenditures that stayed
within the state.
Considered the likely substitution of other economic activity that might
occur in the area if the I-79 park were not developed. Given that there is an
abundant availability of other land in the area for development, we estimated
that no other activity was displaced because of the park.
Used specific economic multipliers to calculate the net indirect economic
impact of the industry from the net direct impact. For each new dollar of
20.This substitution effect implies that if the technology industry did not exist in north-central
West Virginia, 80% of the business activity and payroll associated with it would be lost, while
the other 20% would be still be realized through other business activities. Our basis for this
estimate is interviews with technology employers in the region, each of which was asked to
estimate how many of their employees would not live in the area if employment in the technology industry was not available.
21.Multipliers are based on RIMS II data for Clarksburg-Fairmont, WV region (source: United
States Bureau of Economic Analysis), and adjusted to statewide scale by Anderson Economic
Group based on market observations and similar figures known for other states.
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Economic Benefits of the Technology Industry
5.
demand for output from the construction industry we used a multiplier of 1.1,
and for each dollar of new household earnings we used a multiplier of 0.7.22
Summed the net direct and indirect impacts to arrive at an overall economic
impact.
Please see “Findings: Direct and Indirect Economic Impact of Construction
Activity” on page 30 of this report for the results of this analysis.
22.Source: United States Bureau of Economic Analysis, RIMS II data for Clarksburg-Fairmont,
WV region, adjusted to statewide scale by Anderson Economic Group based on market observations and similar figures known for other states.
Anderson Economic Group, LLC
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Other Technology Industry Activities
VI. Other Technology Industry Activities
Throughout north-central West Virginia there are a variety of activities occurring that are indicative of technological growth and development. These activities are illustrated through the following indicators:
• Science and Engineering Graduate Students
• University Research and Development
• Small Business Innovation Research (SBIR) Program Awards
• Technical Councils, Institutes, and Other Industry Advocacy
SCIENCE AND
ENGINEERING
GRADUATE
STUDENTS
A concentration of students trained in the fields of science and engineering is
always an asset to employers in high-tech industries, as well as companies looking for new locations. West Virginia University (WVU) in Morgantown, West
Virginia, is the largest university in West Virginia, with an enrollment of 26,051
students, 7,910 of which are graduate students.23 In 2003, West Virginia University had 1,761 Graduate students in the fields of science and engineering.
TABLE 14. WVU
Science and Engineering Graduate Student Enrollment
Year
1999
2000
2001
2002
2003
Enrollment
1,473
1,458
1,457
1,600
1,761
Source: National Science Foundation
UNIVERSITY
RESEARCH AND
DEVELOPMENT
In addition to West Virginia University, the region is home to several other colleges and universities with centers and initiatives devoted to technology advancing research.24 These centers are not only a valuable opportunity for students to
gain first hand experience in high-tech fields, they also bring a variety of products, processes, and innovation to the surrounding region. A few (though not all)
of these research centers are highlighted below.
West Virginia University
West Virginia University (WVU) consistently ranks among the top 20 percent of
the nation’s universities for R&D expenditures in the sciences. As Table 15 on
page 37 illustrates, expenditures for research and development in the sciences
23.West Virginia University web site, available at: http://www.wvu.edu.
24.The National Science Foundation publishes reports on research and development appropriations, graduate students, and various collegiate indicators for 599 universities throughout the
nation. Detailed information on many smaller, regional, and private institutions is not always
available in the National Science Foundation’s annual reports.
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Other Technology Industry Activities
have increased in most fields over the past five years, for an overall average
annual increase of 10.6 percent from 1999-2003.
TABLE 15. WVU
Research & Development Expenditures (in thousands)
1999
Computer sciences
Environmental sciences
Life sciences
Mathematical sciences
Physical sciences
2000
2001
2002
2003
$346
$1,814
$284
$183
$377
$3,335
$5,671
$4,530
$5,777
$6,242
$33,247
$32,628
$43,380
$48,372
$59,881
$91
$188
$312
$265
$432
$4,078
$4,295
$4,047
$4,308
$6,699
Psychology
$365
$275
$177
$324
$462
Social sciences
$634
$16
$67
$1,388
$1,593
Engineering
$20,601
$20,560
$17,269
$22,563
$28,006
Total
$64,696
$67,447
$72,067
$85,182
$105,695
Source: National Science Foundation
The majority of WVU’s 2003 R&D expenditures went to the Life Sciences (57
percent). Engineering received the second largest percentage of expenditures at
27 percent, while the physical and environmental sciences comprised the third
largest percentage of R&D spending, with 6 percent each.
WVU has a nationally renowned program for Forensic and Investigative Sciences, and offers the nation’s only undergraduate degree in biometrics. The program works in partnership with the numerous scientific and biometrics research
initiatives in the region, and in 2005 was awarded full accreditation from the
American Academy of Forensic Sciences.25
WVU’s forensics program also works in collaboration with the Nanoscale Science, Engineering, and Education Initiative. Nanotechnology is a rapidly growing field and has become one of the most innovative research tools for fields
ranging from manufacturing to cancer research. West Virginia University’s
Nanoscale Initiative combines a variety of research disciplines that focus on
topics from the forensic sciences to nano structured material development.26
WVU researchers are performing cutting edge research in several technological
fields, including cell development, superalloys, Unmanned Aerial Vehicles
(UAVs), and facial imaging technology. WVU has formed partnerships with
multi-national companies such as Augusta Systems, Bristol-Myers Inc., Com25.West Virginia University, Forensic and Biometrics Gateway web site, available at: http://
www.wvu.edu/~forensic.
26.West Virginia University, Nanoscale Science, Engineering, and Education Initiative web site,
available at: http://www.wvu.edu/~wvnano/wvnanobackground.htm.
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Other Technology Industry Activities
puter Sciences Corporation, Lockheed Martin, Mack Trucks, Mead Westvaco,
Xanthus Life Sciences, and Miles Automotive to increase opportunities for
commercialized research with market potential. Additionally they have collaborated with Federal Agencies throughout the nation, including the EPA, the
Department of Defense, NASA, The Department of Energy, and the Department
of Justice.
WVU’s work with the federal government is an important part of their research
and development, In 2003, West Virginia University received $60.6 million dollars in federally financed R&D expenditures for science and engineering.27
WVU also partnered with the University of Pittsburgh and Carnegie-Mellon
University to win the research component of the management contract with the
National Energy Technology Laboratory (NETL).
Fairmont State University
In 2004, Fairmont State University, in conjunction with the Institute for Scientific Research (ISR), the EdVenture Group, and nine central West Virginia
School Districts, formed a project for Comprehensive Information Technology
Education in Rural Appalachia (CITERA). The project received a three year,
$877,000 grant from the National Science Foundation, and provides information technology education to seventh through ninth grade students and teachers.
In 2005, Fairmont State University, in partnership with the Institute for Scientific Research and Pierpont Community and Technical College continued to
build upon the results of CITERA by implementing the Expanding Pathways for
Educational Development and Information Technology Experiences (ExPEDITE) project. This project received a two year $750,000 grant from the
National Science Foundation to provide students educational pathways and
resources to prepare them for careers in Information Technology.
FSU is working in partnership with the NASA IV&V center in Fairmont, WV to
expand their research capacity in computer science and information systems to
align with the needs of NASA IV & V. Fairmont State is also a partner in a five
year National Institutes of Health IDeA Networks of Biomedical Research
Excellence (INBRE) grant, where they receive $350,000 annually to support
research in Biology, Chemistry, and Geoscience.
Fairmont State has been a valuable asset to the WVHTC Foundation’s Global
Grid Exchange. In 2006, the university was the world’s leading donor of computing cycles to West Virginia’s Global Grid Exchange.28 The Global Grid
27.National Science Foundation, WVU Academic Institutional Profile.
28.The Global Grid Exchange is an initiative of the WVHTC Foundation. More information
about the Grid can be located on their web site, available at: http://www.globalgridexchange.com.
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Other Technology Industry Activities
Exchange delivers the spare processing power of Internet-connected computers
to users involved in businesses, science, and medical research. FSU estimates
that since they began sharing service with the Global Grid Exchange, they have
provided $9 million worth of computer resources for academic research.29
Glenville State College
Through a variety of partnerships and initiatives, Glenville State College has
been committed to spreading high-tech communications technologies throughout central West Virginia. Glenville State College is located in Gilmer county,
WV. Gilmer, along with Braxton County, partnered with Glenville State and
Carnegie Mellon University’s Center for Appalachian Network Access (CANA)
to establish West Virginia’s first technology research zone. The research zone
has already made significant strides in developing communication technology,
and Glenville State has worked to devise innovative ways to incorporate new
communications technology with educational initiatives. Glenville State also
hosts the National Corrections and Law Enforcement Training and Technology
Center (NCLETTC), which opened their training facility for criminal justice
students, as well as local and state public safety officials, in 2005.
Glenville is also working to develop a number of Distance Learning opportunities. Glenville recently teamed up with the Clay Center in Charleston, West Virginia in an effort to send live performances and educational opportunities to k12 schools throughout central West Virginia. In 2006, Glenville received a $3.7
million grant from NASA to provide remote high schools with distance learning
equipment. Glenville State will also use the grant to expand their work with scientific research equipment, and the computing resources they provide to the
Global Grid Exchange.
West Liberty State College
Located in the Northern Panhandle of West Virginia, West Liberty State College
(WLSC) has contributed valuable research to the region. The Chemistry department of West Liberty State College is currently working on a project that models Cytochrome P450, a host of enzymes in the human body that break down
potentially hazardous chemicals. Research on Cytochrom P450 can provide
valuable insight to the medical world as to how medicine is going to effect or
interact with the human body. Additionally, West Liberty is undertaking a
research project that is using molecular mapping to determine the role that
Hypertriglyceredemia plays in the genetic predisposition for cardiovascular disease. Both of these projects have been funded through a $1.5 million grant from
NASA.
29.Fairmont State University, News and Events, August 3, 2006.
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Other Technology Industry Activities
WLSC is also home to the Science Math And Research Technology (SMART)
center, a science center that provides hands-on educational opportunities, as
well as educational events for schools within the region. The SMART center is a
member of the Association of Science and Technology Centers.30
Wheeling Jesuit University
Wheeling Jesuit University is home to two prominent National Aeronautic and
Space Administration (NASA) buildings, The National Technology Transfer
Center and the Center for Educational Technologies. The National Technology
Transfer Center (NTTC) links U.S. industry with federal labs and universities
that have the technological facilities and researchers for product development.
The NTTC provides a number of services to assist researchers, including technology evaluation and market assessment, partnership development, computer
information services, and strategic technical services. The Center for Educational Technologies began in 1994, and consists of curriculum developers, scientists, educational researchers, computer programmers, teachers, professors,
technology specialists, and videographers who work to design and incorporate
technological innovations into classrooms and curriculum for all ages. The Center for Educational Technologies is also home to the NASA sponsored project,
Classroom of The Future and is a Challenger Learning Center.31
SMALL BUSINESS
INNOVATION
RESEARCH (SBIR)
AWARDS
One of the best ways to measure the innovative technology emerging from the
private sector is through the amount of public investment in research and development projects. Each year, the federal Office of Technology awards small businesses money for research and development for new technologies and products.
The SBIR program was designed to encourage the technological potential of
promising companies, and provide an incentive to profit from commercialization. SBIR funds support two project phases for companies. Phase I awards support projects in the start-up phase. In order for companies to be eligible for a
Phase II award, they must have received funding for Phase I, and developed
their Phase I technology enough to illustrate its commercialization potential.
The SBIR is a highly competitive program, and awards are not guaranteed to
companies throughout all fifty states.32
Because projects that move onto the Phase II stage can take up to two years to
complete, the Phase I and Phase II awards can vary greatly from year to year (as
30.West Liberty State College web site, available at: http://www.wlsc.edu.
31.Classroom of the Future creates high-quality materials that are technology intensive. These
curricular supplements incorporate NASA expertise and data sets and are used by students and
educators. Challenger Learning Centers comprise an international network of educational science centers that educate children on math, science, and technology.
32.Small Business Administration, Office of Technology.
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Other Technology Industry Activities
a successful project is starting up or winding down). As Table 16 on page 41
illustrates, West Virginia’s total SBIR awards have steadily increased since
1997, going from a total of 3 awards in 1997, to 22 awards in 2004. According
to the WVHTC Foundation, 13 of West Virginia’s 22 SBIR awards in 2004 were
granted to three firms in north-central West Virginia.33
TABLE 16. West
Virginia SBIR Awards, 1999-2004
Phase 1
Awards
Phase 1
Dollars
Phase 2
Awards
Phase 2
Dollars
Total
Awards
Total
Dollars
1999
3
$265,178
2
$1,478,995
5
$1,744,173
2000
6
$505,675
3
$1,544,808
9
$2,050,483
2001
4
$339,774
5
$3,413,541
9
$3,753,315
2002
13
$1,271,071
0
$0
13
$1,271,071
2003
20
$1,669,967
5
$6,182,069
25
$7,852,036
2004
12
$1,107,810
10
$6,927,201
22
$8,035,011
Source: Small Business Administration, SBIR Program Statistics
INDUSTRY
ADVOCACY
In addition to growing technological research and development, West Virginia
has an extensive network of organizations that provide resources for technology
industry growth and innovation. A few are highlighted below.
West Virginia High Technology Consortium Foundation
The vision of the WVHTC Foundation is to provide innovative, technologybased programs, products and services to the global marketplace by creating a
network of high-tech resources throughout the State of West Virginia, and to
provide a catalyst for high-tech growth and innovation within the region. Their
headquarters are located in Fairmont, with additional West Virginia locations in
Wheeling, Moundsville, and Glenville. They also have an office in Washington,
D.C.
The WVHTC Foundation has seven major departments, which are described
below.
• The Research and Development Group uses innovative technologies to manage,
design, and build hardware and software systems. Its areas of particular focus
and expertise include Web services, collaborative software solutions, system
design, hardware design and integration, wireless broadband applications, grid
computing, and robotics.
33.Touchstone Research Laboratory received four phase I awards and four phase II awards; FMW
Composites received three phase I awards; and ProLogic received two phase II awards.
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Other Technology Industry Activities
• The IP Management Group provides effective and expedient evaluations of its
clients' intellectual assets. IPMG plays an instrumental role in advancing
research from labs to commercialization. In doing so, it also provides a comprehensive range of intellectual property management services.
• The INNOVA Commercialization Group (INNOVA) is a professional services
and seed stage investment initiative dedicated to creating successful entrepreneurs and new ventures. INNOVA specializes in bringing vital knowledge and
resources to seed and early stage companies and commercialization efforts, and
assisting small businesses in pursuit of SBIR funds.
• The Affiliate Program is comprised of approximately 200 affiliate companies
ranging from high-tech companies to private businesses with a demonstrable
desire to do business in West Virginia. The program provides support to the
members through the coordination of value-added services.
• The Public Safety and Homeland Security Group (PSHSG) serves as a support
network for law enforcement, corrections, and public safety professionals. It
offers these groups training, educational services, technical assistance, and technology transfer assistance. The department offers unique and exceptional training events such as the Office of Law Enforcement Technology
Commercialization’s (OLETC) Mock Prison Riot, the National Corrections &
Law Enforcement Training & Technology Center’s (NCLETTC) Mock Disaster, and OLETC's Commercialization Planning Workshops.
• The I-79 Technology Park Development Group provides support infrastructure
to foster the growth of the I-79 Technology Park. Since its creation in 2000, the
department has acquired more than 400 acres of new land for the park and
administers six programs, including property development, community relations, leasing, and facilities management.
• The Technology Services Group (TSG) offers visualization services as effective
technology-related communications tools. This department seeks to utilize global communications technologies to enable companies to share information
anytime, anywhere. This department administers the Global Grid Exchange,
which is discussed in more detail below.
Some of the major accomplishments of the WVHTC Foundation as a whole
include the I-79 Technology Park and the Global Grid Exchange. The I-79
Technology Park is the icon of the technological corridor committed to fostering
the growth of high-tech businesses within the region. The Global Grid
Exchange is an online exchange that aggregates the unused capacity of Internetconnected computers. Today, the Global Grid Exchange is the world's largest
open-public-grid computing platform.34
The WVHTC Foundation is also currently in the process of integrating the Institute for Scientific Research, Inc. (ISR). ISR performs cutting-edge research in
science and engineering. Their main areas of expertise include intelligent control systems; IT education, training and outreach, computational technologies,
34.WVHTC Foundation web site, available at: http://www.wvhtf.org.
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Other Technology Industry Activities
dependable systems and assurance, sensors; and plasma sciences. Among those
who have relied on and retained ISR’s research are NASA, the U.S. Department
of Homeland Security, National Science Foundation, and the Department of
Defense. ISR is also home to Black Diamond, a supercomputer that performs
more than 100 billion calculations per second.
Polymer Alliance Zone of West Virginia
The Polymer Alliance Zone (PAZ) has one of the highest concentrations of producers of high specialty and engineering polymers in the world. PAZ is located
in the Mid-Ohio Valley sector of West Virginia. The mission of the Polymer
Alliance Zone is to create the most favorable business climate in the world for
the plastics industry through a unique partnership among business, labor, education and government. It was built on the principles of collaborative partnerships
between the public and private sectors all working to create the most favorable
conditions possible to support both the new and existing polymer industry.
One of the core programs that the Polymer Alliance Zone has been associated
with is the Mid-Atlantic Recycling Center for End-of Life Electronics (MARCEE) project. It is the first-ever total solution for developing an economical process to recycle end-of-life plastics found in electronics. The MARCEE project is
at the forefront of providing a national solution to the growing problem of how
to recycle, re-engineer, and remanufacture end-of-life electronics. To make this
project successful, PAZ has worked diligently with West Virginia University’s
Research Corporation, the Robert C. Byrd Institute, the WVHTC Foundation,
the National Center for Electronic Recycling, the U.S. DoE and EPA, the West
Virginia Economic Development Grant program, the West Virginia Development Office, the National Energy Technology Laboratory, and many private
sector partners such as SDR Technologies, Amandi Services, Professional Services of America, IMTS, GE Plastics, E.I. DuPont, IBM, Sony, Toshiba, Panasonic, Sharp, and JVC.
I-79 Development Council
The I-79 Development Council is a non-profit corporation with members from
businesses including banking, higher education, hospitals, legal, high technology, economic development authorities, chambers of commerce, media, and
many other business groups. These members are located along the I-79 Interstate Corridor, including Monongalia, Marion, Harrison, and Lewis counties.
The mission of the I-79 Development Council is to nurture and retain the traditional business base within the region, while promoting the growth of new hightech industries such as biometrics, aerospace, biotechnology, and forensic science. The Development Council also provides valuable resources to companies
and organizations within the I-79 Corridor. In collaboration with the WVHTC
Foundation, local economic development authorities and chambers of comAnderson Economic Group, LLC
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Other Technology Industry Activities
merce, the Development Council provides regional businesses with networking
opportunities, office location assistance, and other services to enhance their
growth potential.35
35.The I-79 Development Council web site, available at: http://
www.i79developmentcouncil.com/lifestyle.cfm.
Anderson Economic Group, LLC
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In Focus: North-Central West Virginia Technology Firms
VII. In Focus: North-Central West Virginia
Technology Firms
ELECTRONIC
WARFARE
ASSOCIATES, INC.
EWA Government Systems, Inc. (EWA GSI), an international technology contractor headquartered in Herndon, Virginia, was among the first large technology companies to locate in north-central West Virginia. Under the management
of Dr. Frank Blake, EWA opened its Morgantown, WV office in 1989, seeing an
advantage offered by the area’s knowledgeable workforce and lower employment costs compared to the Washington, D.C. area. As a founding member of
the West Virginia High Technology Consortium, EWA Fairmont has also served
as a mentor to other technology companies, helping to grow the industry in
north-central West Virginia. These companies have been both prime contractors
and subcontractors to EWA.
EWA Government Systems, Inc. is an engineering company that provides engineering solutions to the Federal Government—primarily the Department of
Defense. Three examples of ongoing programs are: secure communication systems, battleforce tactical trainers, and tagging and tracking devices. Their communication systems are installed on military vehicles to allow commanders in
the field to receive and analyze sensitive information. EWA battleforce training
products interface directly with systems onboard military ships, allowing troops
to train onboard their ships and directly on the instruments that would be used in
battle. The training applications not only simulate real scenario events, but also
track user keystrokes and decisions to provide better post-training feedback.
Additionally, EWA has developed advanced tagging and tracking applications
that are used to monitor enemy force movements. A similar EWA system, PERMATS, was used to track refugees during the conflict in Bosnia, and in the
United States after Hurricane Katrina, allowing relief agencies to identify and
reunite family members who had been separated.
NATIONAL
BIOMETRIC SECURITY
PROJECT
The National Biometric Security Project (NBSP), a nonprofit organization
established after the events of 9/11, supports government and private sector
efforts to standardize, test, acquire, and deploy biometric technology; and to do
so in an environment compatible with rational social objectives in preserving
individual privacy and civil liberties. The NBSP has a Test, Research and Data
Center in Morgantown, West Virginia that is tasked to support all non-defense
agencies to protect the nation’s critical infrastructure, and to collaborate with
and support Department of Defense biometric projects as needed.
The NBSP center in Morgantown is soon to be the world’s only ISO certified
biometrics lab, and in 2007 will host the first national biometrics conference for
state and federal government officials. The center is currently leading the development of a prototype database that will be used to secure and manage biomet-
Anderson Economic Group, LLC
45
In Focus: North-Central West Virginia Technology Firms
ric information on all government employees and subcontractors. They have
also worked with companies to develop technologies that allow weapons only to
be fired if the user's biometric matches that associated with the weapon, and
vehicles with smart devices that will scan a driver's biometrics to validate their
authorization to drive that vehicle.
AZIMUTH
Azimuth, Incorporated, established in 1988, was one of the founding member
companies of the West Virginia High Technology Consortium. Azimuth
employees over 110 people at five locations, four of which are in West Virginia.
Azimuth is a diverse engineering firm specializing in rapid prototyping, electronic engineering, software engineering, infrastructure assessment, and light
manufacturing. They were awarded the Blue Chip Enterprise Award in 1994
and 1999, and were featured by Inc. Magazine as one of the 500 fastest growing
companies in America. In 2004 the company received the District Director's
Choice Award from the U.S. Small Business Administration for outstanding
business achievement.
Azimuth works extensively with various federal agencies, including the U.S.
Army, U.S. Navy, U.S. Special Operations Command, and the U.S. Department
of Defense. They also team with major defense contractors such as Electronic
Warfare Associates, Inc., Northrup Grumman, Computer Sciences Corporation
(CSC), and Lockheed Martin. Azimuth recently teamed with Innovative
Response Technologies, Inc., a subsidiary of the WVHTC Foundation, to
develop and produce the BomBot, a small robot used to remotely explode roadside Improvised Explosive Devices (IEDs). Though similar devices are available to the U.S. Military, the BomBot is advantageous because it is the most cost
efficient and easily deployable. Over 2,300 BomBots are currently in the field,
many of which are in Iraq.
Azimuth is also the prime contractor operating the West Virginia National
Guard's Center for National Response in Gallagher, West Virginia. This facility
is a counter-terrorism, counter-weapons of mass destruction (WMD) training
facility for the Department of Defense, civil support teams, federal, state and
local organizations, and rapid responder units from around the world. Training
scenarios run by the Azimuth team include a post-blast rubble area with hazards
and vehicles; a subway train and stations with mezzanine; three chemical, biological or drug laboratories at different levels of sophistication; a highway
WMD HAZMAT incident that can be configured with a wide variety of chemical, biological and radiological sources; and a cave and bunker complex that can
be used in a multitude of scenarios.
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In Focus: North-Central West Virginia Technology Firms
INFORMATION
RESEARCH
CORPORATION
Information Research Corporation (IRC) is an information technology company
located in Fairmont, West Virginia. The company provides technical support,
software development, enterprise architecture development, application development and deployment, and e-learning services to government and commercial
clients. IRC was formed in 1998 by Bob Wentz, who continues to serve as the
company's president. The company began in the incubator of the WVHTC
Foundation, and through the Foundation's assistance and support, IRC has
grown from one employee to its current level of 24 employees.
One of the services that IRC specializes in is e-learning software. Their software
facilitates education in an interactive electronic format. E-learning programs
walk the learner through a computer-based course or training program. IRC
developed this product after receiving a Small Business Innovation Research
Program (SBIR) award of $300,000 from the U.S. Department of Education.
The award was given in two stages that allowed for the exploration of the elearning software and then its actual development. Key outcomes included a
structured evaluation process that addressed teacher attitudes, knowledge acquisition, and classroom integration of knowledge and skills. IRC e-learning tools
are now being used by a variety of clients, including NASA, the FBI, and the
Department of Defense.
FMW COMPOSITE
SYSTEMS INC.
Located in Bridgeport, West Virginia, FMW Composite Systems has been in the
I-79 Technology Corridor for almost 13 years. The company was founded in
1993 by Dale McBride, who had acquired patent rights for the Flexcel refueling
system, a technology developed to provide the military with a fuel deployment
system that could expend the range of track vehicles (tanks) without the use of
traditional refueling vehicles. FMW soon developed a similar technology,
named FAST, for use by wheeled vehicles and rotor craft. Flexcel and FAST are
made of rubber composites reinforced with a proprietary filament winding process, making a material strong enough that it can be filled with a liquid and
safely dropped from a helicopter to troops on the ground. Today, Flexcel and
FAST are used by the Army and Marines to extend vehicle ranges, and to
deploy liquids to troops in remote locations.
Other FMW products include titanium matrix composites, nano-enhanced titanium alloys, and ceramics. The titanium matrix composites, which are made by
inserting fibers into titanium, provide a lightweight material that is stronger than
steel. FMW is the world's first and only supplier of flight qualified titanium
composites. Their materials are used to lighten landing gear on military and
commercial aircrafts, and to reduce payload compartment weight on NASA
shuttle vehicles. FMW is also working with NASA to develop ceramic materials
that can withstand high temperatures. Prototypes of this material have been
shown to withstand the heat experienced when entering the earth's atmosphere.
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In Focus: North-Central West Virginia Technology Firms
GLOBAL SCIENCE &
TECHNOLOGY
Global Science & Technology's West Virginia Division (GST-WV) offers software engineering, data management, project management, network management, and research and development services to federal, state, and local
governments, as well as commercial clients. GST-WV is led by Wade Linger, a
native of West Virginia, and founder of TMC Technologies, Inc., the predecessor to GST-WV. GST acquired TMC Technologies in 2005 to expand operations
in West Virginia by leveraging the strengths and qualifications of both organizations and expand their customer base with federal agencies.
Federal contracts have allowed the company to grow and expand its capabilities.
For example, GST-WV supports NOAA by providing technology solutions to
ingest, process, and store climate information gathered from satellites and make
the information readily available to the scientific community. They also support
NASA by providing software research and development, as well as independent
verification and validation services for mission-critical NASA spacecraft software. GST-WV also supports national security by providing a number of different services on behalf of the Department of Defense, ranging from researching
and evaluating biometrics systems for national defense to developing better
ways of combating corrosion within aging military systems. At the state and
local level, GST-WV provides services ranging from installation and maintenance of information systems, to research and development of electronic documentation/imaging systems that aid local government agencies in storing and
sharing information traditionally provided in paper form.
TOUCHSTONE
RESEARCH
Touchstone Research Laboratory is one of North America’s leading materials
testing, industrial problem-solving, and applied research companies. The company was founded 1980 by Libby Kraftician and Brian Joseph in a basement in
Wheeling, and has since expanded to 54 employees working in a four building
facility in Triadelphia, West Virginia. Their facility, which was called “one of
the best equipped labs of its size in the country” by Advanced Materials & Processes magazine, has over $10 million worth of scientific equipment in 40,000
square feet of space. The company has earned numerous awards, including contractor of the year nominations from NASA and 3M, and the U.S. Chamber of
Commerce “National Blue Chip Enterprise” award.
Touchstone has served a wide range of R&D clients, including private companies such as Toyota, Alcan Aluminium, and 3M; and federal agencies including
the U.S. Navy, Air Force, and NASA. Their materials are used on Shuttle boosters, nuclear submarines, fighter jets, as well as in automotive radiators, race
vehicles (including hyrdoplanes, canoes, and bikes), and commercial planes.
In addition to proprietary R&D, Touchstone has also developed two products in
recent years that are likely to have broad applications. The first, CFOAM, is a
coal based structural material that is inexpensive, lightweight, fire-resistant, and
impact absorbing. Applications include fire-proof ship decking and bulkheads,
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48
In Focus: North-Central West Virginia Technology Firms
impact mitigation for aircraft, structural panels and firewalls for automobiles,
composite tooling, and as part of aerospace thermal management systems. Their
other product, MetPreg, is a lightweight and strong fiber reinforced aluminum.
Applications for MetPreg are broad, and include lightening vehicles to increase
fuel economy without sacrificing safety, and reinforcing aircraft components
while reducing weight. As a result of the success of these products, plans are
underway to build a fifth building at Touchstone.
Anderson Economic Group, LLC
49
Looking Forward
VIII. Looking Forward
The progress made in north-central West Virginia over the past several years is
readily apparent. The more visible signs of this progress include the I-79 Technology Park, which is home to the state-of-the-art WVHTC Foundation
Research Center, NASA's IV&V facility, the Alan B. Mollohan Innovation Center, and a number of private sector technology companies. The success is also
visible in news headlines, with announcements of SBIR awards for local companies, the use of local technologies around the world, and the discussions of
expansion at federal facilities in the area, such as the FBI’s and DoD’s biometrics facilities. Residents and visitors alike also see the I-79 Technology Corridor
signs along interstate 79, from north of Morgantown, to south of Clarksburg.
Other more indirect signs of success are also apparent, yet not as regularly
attributed to the north-central West Virginia technology movement. Such signs
include the increasing university enrollment of science and engineering students, and the growing amount of cutting-edge research being done at local universities, colleges, and businesses. There are also the 18,000+ people who work
in the region’s technology industry, earning above-average wages, and helping
to support local retailers, charities, restaurants, and other businesses. These
technology industry employees make breakthroughs each day, ranging from
new applications of biometrics to improve security at home and abroad, to new
lightweight materials for use in space shuttles, commercial planes, automobiles,
and buildings.
In addition to a solid foundation of businesses, federal anchors, and university
programs, the technology industry in north-central West Virginia also has an
active and organized base of support. Groups such as the WVHTC Foundation,
the Polymer Alliance Zone, and the I-79 Development Council continue to promote technology based industry expansion by attracting firms from across the
country, and around the world, to the region. They also actively promote the
industry at home by providing existing technology companies with strategic
support, startup assistance, and other valuable resources, and by raising awareness in schools and communities to let the next generation of West Virginians
know that exciting opportunities are available in the technology industry.
Despite the progress already made in developing the technology industry in
north-central West Virginia, there remains great potential for future growth and
reward. Significant work and investment has already gone into the growth of the
industry, but without further concentrated efforts, the momentum in place may
not be enough to carry the industry forward. Fortunately, leadership in the
region appears committed to the industry and future efforts to facilitate its
growth. Assuming this effort continues, the people of West Virginia can expect
to further benefit from a growing technology industry for years to come.
Anderson Economic Group, LLC
50
Appendix A: Technology Industry Definition
Methodology
Our definition of the technology industry is composed of specific industrial sectors. These sectors are identified by North American Industry Classification
System (NAICS) codes, which is how the U.S. Census Bureau reports industry
data.1 Because there is not a universally accepted definition of technology, we
employed the following methodology to determine an accurate and concise definition of the technology industry.
Specifically, this methodology involved:
1.
Surveying existing definitions
We reviewed definitions of the technology industry used in relevant industry reports,
analyses, and other materials.
2.
Making a first cut selection
We made a first selection of industry sectors (as defined by NAICS codes) to be
included in the definition. We based our decision at this step on the frequency with
which a sector was cited in other studies. If the sector appeared in the U.S. Department of Commerce definition and one other definition, we included the industry in
our definition.
3.
Conducting an occupational test
If an industry was included in one or two other studies, and met a specific standard
concerning the share of occupations in an industry with a technology focus, it was
included in our definition.
4.
Refining from the 6-digit NAICS codes
We took the selected 6-digit industry sectors back to the 4-digit level. This was done
because estimates of employment and payroll are more available at the 4-digit level.
5.
Breaking down the industry definition into technology subsectors
Based on the definition of each NAICS code, as given by the U.S. Census Bureau,
we classified each 4-digit NAICS code into one of the following technology clusters: Advanced Manufacturing, Chemical and Material, Information Technology
(including telecommunications), and Other Technologies.
REVIEW OF EXISTING
DEFINITIONS
In our first step we reviewed past reports and other sources involving the technology industry to determine what industry sectors are most commonly
included when defining technology. A summary of which reports we reviewed
1. Our definition was done at the NAICS 4-digit level, as this is the most detailed level for which sufficient amounts of data is commonly available at the county level. A NAICS code can be between
2 and 6 digits, with each digit providing an additional level of detail. For example, NAICS code 325
represents chemical manufacturing, NAICS code 3254 represents pharmaceutical and medicine
manufacturing, and 325411 represents medicinal and botanical manufacturing.
Anderson Economic Group, LLC
A-1
and how they affected our definition can be found in “Appendix B: Other Definitions of the Technology Industry”.
SELECTING NAICS TO
INCLUDE: FIRST CUT
Upon reviewing the already established definitions of technology, we decided
that the U.S. Department of Commerce, Office of Technology Policy definition
used in the fourth edition of The Dynamics of Technology-Based Economic
Development, would serve as the base for our definition.1 Specifically, if a
NAICS code was used in the U.S. Department of Commerce definition, and at
least one of the other five definitions, it was included in our definition.
NAICS code 5416 (Management, Scientific, and Technical Consulting Services) which met the criteria at this step, was later excluded from our definition.
Our analysis found inconsistencies in the use of “Management Consulting Services” as a classification, which resulted in significantly more employment in
this sector in 2003 than in 2002. It appears likely that a large number of jobs
previously classified as “5613-Employment Services” or as “5511-Management
of Companies & Enterprises” were reclassified under “54161-Management
Consulting Services.” Given that the reclassified employment was significant,
and that the reclassified employees appear not to work in a technology-related
occupation, we removed NAICS code 5416 from our definition.
NAICS codes not meeting this criterion were retained for further analysis.
SELECTING NAICS TO
INCLUDE: SECOND
AND THIRD CUTS
If a NAICS code was not included after the first cut, we then further consulted
the definitions of technology used by the AeA, Pittsburgh Technology Council,
and Carnegie-Mellon/SSTI.2 If a remaining NAICS code was not included in
any of these definitions, it was excluded from our definition. If it was included
in all three, it was included in our definition; however, no NAICS codes met this
criterion.
A quantitative analysis was then applied to NAICS codes that were included in
one or two of the definitions presented by AeA, Pittsburgh Technology Council,
and Carnegie-Mellon/SSTI. This involved assessing the occupational makeup
of each industry, and keeping those industries in which more than double the
1. We based this decision on the fact that the U.S. Department of Commerce has used the definition on three previous editions of its Dynamics of Technology-Based Economic Development
report; the definition was based in the 1999 BLS definition as presented by Daniel Hecker;
and, as it is a government source, the report is assumed to be unbiased.
2. We did not further consult the definitions used by Anderson Economic Group (AEG) in 2001,
or the BLS in 1999, as these definitions are very similar to that used by U.S. Department of
Commerce, Office of Technology Policy in The Dynamics of Technology-Based Economic
Development, fourth edition. This is largely due to the fact that both the 2001 AEG definition
and the BLS definition were based on the 1999 BLS definition.
Anderson Economic Group, LLC
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national average of workers had technology-oriented occupations.1 Table 1,
“Occupational Analysis of Industries Considered for Inclusion in Technology
Industry Definition, summarizes this analysis for each industry on which we
performed an occupational analysis. Industries that had a 10 percent or greater
share of employment in technology occupations were included in our definition.
FINALIZING THE
DEFINITION
After applying the above criteria we had a list of 186 6-digit NAICS codes.
However, precise industry data is not commonly available at the 6-digit level for
individual counties—the level of geography analyzed in this study. To accommodate this, our definition—as presented in Table 6, “Definition of the Technology Industry by Cluster,” on page 22 of the report—is comprised of each
industry’s 4-digit NAICS code. While this broadens the definition to some
extent, it allows far greater precision in estimating industry data for employment, payroll, and establishments where needed.2
TECHNOLOGY
CLUSTER
CLASSIFICATIONS
Upon completing our industry definition, we identified technology clusters by
classifying each NAICS as involving information technology, advanced manufacturing, or chemical and material. An “other technologies” classification was
used for those not fitting a specified cluster, and a “federal anchors” classification was used for government-funded technology employers not captured by the
Census Bureau in NAICS data.
The composition of each cluster is presented in Table 6, “Definition of the Technology Industry by Cluster,” on page 22 of the report.
1. May 2004 occupation data was gathered at the 4-digit NAICS level (most detailed level available) from the BLS Occupational Employment Statistics Survey. At the national level we
found 5 percent of all occupations were classified as Computer and Mathematical; Architecture and Engineering; and Life, Physical, and Social Science.
2. The U.S. Census Bureau does not disclose industry payroll data when doing so would make
apparent an individual business payroll. Industry employment data is also frequently reported
as a range (i.e. 0-19 employees) for more specific NAICS levels. Thus, some estimates were
made based on broader industry trends.
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TABLE 1. Occupational
Analysis of Industries Considered for Inclusion in Technology Industry Definition
Total
Industry
Employment
Employment
in Technology
Occupations*
Share of
Employment in
a Technology
Occupation**
2111 - Oil and Gas Extraction
119,200
26,700
22.4%
3334 - Ventilation, Heating, AC, and Commercial
Refrig Equipment Manufacturing
151,650
9,610
6.3%
3335 - Metalworking Machinery Manufacturing
199,230
13,950
7.0%
3359 - Other Electrical Equipment and Component
Manufacturing
137,450
12,060
8.8%
37,700
4,280
11.4%
3399 - Other Miscellaneous Manufacturing
356,330
12,870
3.6%
4234 - Professional and Commercial Equipment and
Supplies Merchant Wholesalers
637,820
111,510
17.5%
5161 - Internet Publishing and Broadcasting
29,250
10,210
34.9%
5171 - Wired Telecommunications Carriers
552,560
102,870
18.6%
5172 - Wireless Telecommunications Carriers
(except Satellite)
192,100
29,100
15.1%
5173 - Telecommunications Resellers
111,800
25,320
22.6%
5174 - Satellite Telecommunications
16,520
2,000
12.1%
128,920
9,250
7.2%
NAICS code - Industry
3369 - Other Transportation Equipment Manufacturing
5175 - Cable and Other Program Distribution
5179 - Other Telecommunications
6114 - Business Schools and Computer and Management
Training
0000 - All United States Industries
7,460
1,760
23.6%
83,780
4,830
5.8%
128,127,360
6,419,460
5.0%
Source: Anderson Economic Group, LLC
Data: U.S. Bureau of Labor Statistics, Occupational Employment Statistics Survey (May 2004)
* Technology occupations are those classified under the OCC Codes for Computer and Mathematical; Architecture and
Engineering; and Life, Physical, and Social Science.
**Industries with a 10 percent or greater share of employment in a technology occupation are included in our definition.
Anderson Economic Group, LLC
A-4
Appendix B: Other Definitions of the
Technology Industry
We reviewed a number of other publications before adopting the definition of
the technology industry used in this report. Of the reports listed in “Appendix F:
Bibliography” we looked most closely at those that used NAICS codes to identify the technology industry. We documented these definitions in a matrix,
which is presented as Table 1, “Technology Definition Matrix,” on page 3. Also,
below you will find a brief narrative summary of the technology definition used
in each of these reports.1
AMERICAN
ELECTRONICS
ASSOCIATION (AeA)
AeA used 45 NAICS codes to define the technology industry. Its guiding principle was that “to be included in AeA’s core definition of high tech, an industry
had to be a maker/creator of technology, whether it be in the form of products,
communications, or services.”
Industries included in AeA’s definition broadly fall into two categories—hightech manufacturing and high-tech services. AeA did not include a NAICS code
if the high-tech portion did not represent a clear majority. The AeA definition of
high-tech does not include the wholesale and retail trade of high-tech goods.
AeA also leaves out biotechnology because, in their words, “there is no clear
consensus on the definition of the biotechnology industry.”
THE PITTSBURGH
TECHNOLOGY
COUNCIL
The Pittsburgh Technology Council used 126 NAICS codes to define the technology industry in its 2005 “State of the Industry” report. The Pittsburgh Technology Council used three main criteria in determining if an industry qualified
as being technology oriented. These criteria were: research and development
activity; scientists and engineers employed; and specialty technology workers
employed.
The Council looked at the percentage of sales invested in research and development, the number of scientists and engineers employed in industries, and the
number of specialty technology workers who are employed in typically nontechnology industries. Such workers might include information systems personnel, computer programmers, lab personnel, and engineers involved in heavy
industrial processes.
1. North American Industry Classification System (NAICS) was adopted in 1997 to replace the
Standard Industrial Classification (SIC) system as the industry classification system used by
the statistical agencies of the United States.
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CARNEGIE MELLON
AND SSTI
Carnegie Mellon’s report “Technology Industries and Occupations for NAICS
Industry Data” identifies three major areas of technology: Technology Employers, Primary Technology Generators, and Secondary Technology Generators.
Their work builds on a previous definition of technology industries identified by
their 3-digit Standard Industrial Classification (SIC) code. In order to be defined
as technology, an industry must be science and engineering intensive, with a
share of employment in those occupations that exceeds three times the national
average.
Using this methodology, Carnegie Mellon classified industries as Technology
Employers if their share of employment in science- and engineering-intensive
occupations exceeded more than three times the national average (3.3 percent).
To be classified as a Primary Technology Generator, an industry must exceed
the U.S. average for research and development expenditures per employee
($11,297) and the proportion of full-time-equivalent R&D scientists and engineers in the industry workforce (5.9 percent). Secondary Technology Generators
are those industries that meet only one of these two criteria.
DANIEL HECKER,
UNITED STATES
BUREAU OF LABOR
STATISTICS
Economist Daniel Hecker of the U.S. Bureau of Labor Statistics (BLS) defined
high-tech industries in his 1999 article “High Technology Employment: A
Broader View.” In the article, Hecker considered industries as high tech if
employment in both research and development and in all technology-oriented
occupations accounted for a proportion of employment that was at least twice
the average for all industries in the Occupational Employment Survey. Therefore, an industry is high tech if it has at least six research and development
workers per 1000 workers and 76 technology-oriented workers per 1000 workers. This definition, which was based on SIC codes, includes high-tech manufacturing, information industries, and technology services.
ANDERSON
ECONOMIC GROUP
(2001)
In our 2001 report “Economic Diversification & High-Tech Employment in
Oakland County” we referred to the definition given by Daniel Hecker of the
BLS in “High Technology Employment: A Broader View.” The article provided
a list of high-tech SIC codes. From this list, and with the relationships defined
by the U.S. Census Bureau, we identified the appropriate NAICS industry
groups to include in a definition of high-tech. This definition was done using
NAICS codes at the 3-digit level. At the time few, if any, other definitions of the
industry existed that were developed using the more accurate NAICS codes.
Most others, including the BLS definition, were done using the older SIC data.
Anderson Economic Group, LLC
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Table 1. Matrix of Technology Industry Definitions From Selected Sources (continued)
NAICS
211111
324110
324121
324122
324191
324199
325110
325120
325131
325132
325181
325182
325188
325191
325192
325193
325199
325211
325212
325221
325222
325311
325312
325314
325320
325411
325412
325413
325414
325510
325520
325611
325612
325613
325620
325910
325920
325991
325992
325998
332911
332912
Industry
Crude Petroleum and Natural Gas Extraction
Petroleum Refineries
Asphalt Paving Mixture and Block Manufacturing
Asphalt Shingle and Coating Materials Manufacturing
Petroleum Lubricating Oil and Grease Manufacturing
All Other Petroleum and Coal Products Manufacturing
Petrochemical Manufacturing
Industrial Gas Manufacturing
Inorganic Dye and Pigment Manufacturing
Synthetic Organic Dye and Pigment Manufacturing
Alkalies and Chlorine Manufacturing
Carbon Black Manufacturing
All Other Basic Inorganic Chemical Manufacturing
Gum and Wood Chemical Manufacturing
Cyclic Crude and Intermediate Manufacturing
Ethyl Alcohol Manufacturing
All Other Basic Organic Chemical Manufacturing
Plastics Material and Resin Manufacturing
Synthetic Rubber Manufacturing
Cellulosic Organic Fiber Manufacturing
Noncellulosic Organic Fiber Manufacturing
Nitrogenous Fertilizer Manufacturing
Phosphatic Fertilizer Manufacturing
Fertilizer (Mixing Only) Manufacturing
Pesticide and Other Agricultural Chemical Manufacturing
Medicinal and Botanical Manufacturing
Pharmaceutical Preparation Manufacturing
In-Vitro Diagnostic Substance Manufacturing
Biological Product (except Diagnostic) Manufacturing
Paint and Coating Manufacturing
Adhesive Manufacturing
Soap and Other Detergent Manufacturing
Polish and Other Sanitation Good Manufacturing
Surface Active Agent Manufacturing
Toilet Preparation Manufacturing
Printing Ink Manufacturing
Explosives Manufacturing
Custom Compounding of Purchased Resins
Photographic Film, Paper, Plate, and Chemical Manufacturing
All Other Miscellaneous Chemical Product and Preparation Manufacturing
Industrial Valve Manufacturing
Fluid Power Valve and Hose Fitting Manufacturing
AeA
Definition
Pittsburgh
Anderson Economic
Technology
Group 2001 HighCouncil Definition
Tech Definition
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Carnegie Mellon /
SSTI Definition:
Aggregate
x
U.S. Department of
Commerce, Office of
Technology Policy
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
U.S. Bureau of Labor
Statistics (1999,
Converted From
SICs)
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Table 1. Matrix of Technology Industry Definitions From Selected Sources (continued)
NAICS
332913
332919
332991
332992
332993
332994
332995
332996
332997
332998
332999
333111
333112
333120
333131
333132
333210
333220
333291
333292
333293
333294
333295
333298
333311
333312
333313
333314
333315
333319
333411
333412
333414
333415
333511
333512
333513
333514
333515
333516
333518
333611
Industry
Plumbing Fixture Fitting and Trim Manufacturing
Other Metal Valve and Pipe Fitting Manufacturing
Ball and Roller Bearing Manufacturing
Small Arms Ammunition Manufacturing
Ammunition (except Small Arms) Manufacturing
Small Arms Manufacturing
Other Ordnance and Accessories Manufacturing
Fabricated Pipe and Pipe Fitting Manufacturing
Industrial Pattern Manufacturing
Enameled Iron and Metal Sanitary Ware Manufacturing
All Other Miscellaneous Fabricated Metal Product Manufacturing
Farm Machinery and Equipment Manufacturing
Lawn and Garden Tractor and Home Lawn and Garden Equipment Manufacturing
Construction Machinery Manufacturing
Mining Machinery and Equipment Manufacturing
Oil and Gas Field Machinery and Equipment Manufacturing
Sawmill and Woodworking Machinery Manufacturing
Plastics and Rubber Industry Machinery Manufacturing
Paper Industry Machinery Manufacturing
Textile Machinery Manufacturing
Printing Machinery and Equipment Manufacturing
Food Product Machinery Manufacturing
Semiconductor Machinery Manufacturing
All Other Industrial Machinery Manufacturing
Automatic Vending Machine Manufacturing
Commercial Laundry, Drycleaning, and Pressing Machine Manufacturing
Office Machinery Manufacturing
Optical Instrument and Lens Manufacturing
Photographic and Photocopying Equipment Manufacturing
Other Commercial and Service Industry Machinery Manufacturing
Air Purification Equipment Manufacturing
Industrial and Commercial Fan and Blower Manufacturing
Heating Equipment (except Warm Air Furnaces) Manufacturing
Air-Cond and Warm Air Heating Equip and Commercial and Industrial Refrig Equip Mfg
Industrial Mold Manufacturing
Machine Tool (Metal Cutting Types) Manufacturing
Machine Tool (Metal Forming Types) Manufacturing
Special Die and Tool, Die Set, Jig, and Fixture Manufacturing
Cutting Tool and Machine Tool Accessory Manufacturing
Rolling Mill Machinery and Equipment Manufacturing
Other Metalworking Machinery Manufacturing
Turbine and Turbine Generator Set Units Manufacturing
AeA
Definition
Pittsburgh
Anderson Economic
Technology
Group 2001 HighCouncil Definition
Tech Definition
Carnegie Mellon /
SSTI Definition:
Aggregate
U.S. Department of
Commerce, Office of
Technology Policy
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
U.S. Bureau of Labor
Statistics (1999,
Converted From
SICs)
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Table 1. Matrix of Technology Industry Definitions From Selected Sources (continued)
NAICS
333612
333613
333618
333911
333912
333913
333921
333922
333923
333924
333991
333992
333993
333994
333995
333996
333997
333999
334111
334112
334113
334119
334210
334220
334290
334310
334411
334412
334413
334414
334415
334416
334417
334418
334419
334510
334511
334512
334513
334514
334515
334516
Industry
Speed Changer, Industrial High-Speed Drive, and Gear Manufacturing
Mechanical Power Transmission Equipment Manufacturing
Other Engine Equipment Manufacturing
Pump and Pumping Equipment Manufacturing
Air and Gas Compressor Manufacturing
Measuring and Dispensing Pump Manufacturing
Elevator and Moving Stairway Manufacturing
Conveyor and Conveying Equipment Manufacturing
Overhead Traveling Crane, Hoist, and Monorail System Manufacturing
Industrial Truck, Tractor, Trailer, and Stacker Machinery Manufacturing
Power-Driven Handtool Manufacturing
Welding and Soldering Equipment Manufacturing
Packaging Machinery Manufacturing
Industrial Process Furnace and Oven Manufacturing
Fluid Power Cylinder and Actuator Manufacturing
Fluid Power Pump and Motor Manufacturing
Scale and Balance (except Laboratory) Manufacturing
All Other Miscellaneous General Purpose Machinery Manufacturing
Electronic Computer Manufacturing
Computer Storage Device Manufacturing
Computer Terminal Manufacturing
Other Computer Peripheral Equipment Manufacturing
Telephone Apparatus Manufacturing
Radio and Television Broadcasting and Wireless Comm Equipment Manufacturing
Other Communications Equipment Manufacturing
Audio and Video Equipment Manufacturing
Electron Tube Manufacturing
Bare Printed Circuit Board Manufacturing
Semiconductor and Related Device Manufacturing
Electronic Capacitor Manufacturing
Electronic Resistor Manufacturing
Electronic Coil, Transformer, and Other Inductor Manufacturing
Electronic Connector Manufacturing
Printed Circuit Assembly (Electronic Assembly) Manufacturing
Other Electronic Component Manufacturing
Electromedical and Electrotherapeutic Apparatus Manufacturing
Search, Detection, Navig, Guidance, Aeronauy, and Naut Syst and Instrument Mng
Auto Environmental Control Manufacturing for Residential, Comm, and Appliance Use
Instruments and Mfg for Measuring, Displaying, and Cntrl Ind Process Variables
Totalizing Fluid Meter and Counting Device Manufacturing
Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals
Analytical Laboratory Instrument Manufacturing
AeA
Definition
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Pittsburgh
Anderson Economic
Technology
Group 2001 HighCouncil Definition
Tech Definition
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Carnegie Mellon /
SSTI Definition:
Aggregate
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
U.S. Department of
Commerce, Office of
Technology Policy
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
U.S. Bureau of Labor
Statistics (1999,
Converted From
SICs)
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Table 1. Matrix of Technology Industry Definitions From Selected Sources (continued)
NAICS
334517
334518
334519
334611
334612
334613
335311
335312
335313
335314
335911
335912
335921
335929
335931
335932
335991
335999
336111
336112
336120
336211
336212
336213
336214
336311
336312
336321
336322
336330
336340
336350
336360
336370
336391
336399
336411
336412
336413
336414
336415
336419
Industry
Irradiation Apparatus Manufacturing
Watch, Clock, and Part Manufacturing
Other Measuring and Controlling Device Manufacturing
Software Reproducing
Prerecorded Compact Disc (except Software), Tape, and Record Reproducing
Magnetic and Optical Recording Media Manufacturing
Power, Distribution, and Specialty Transformer Manufacturing
Motor and Generator Manufacturing
Switchgear and Switchboard Apparatus Manufacturing
Relay and Industrial Control Manufacturing
Storage Battery Manufacturing
Primary Battery Manufacturing
Fiber Optic Cable Manufacturing
Other Communication and Energy Wire Manufacturing
Current-Carrying Wiring Device Manufacturing
Noncurrent-Carrying Wiring Device Manufacturing
Carbon and Graphite Product Manufacturing
All Other Miscellaneous Electrical Equipment and Component Manufacturing
Automobile Manufacturing
Light Truck and Utility Vehicle Manufacturing
Heavy Duty Truck Manufacturing
Motor Vehicle Body Manufacturing
Truck Trailer Manufacturing
Motor Home Manufacturing
Travel Trailer and Camper Manufacturing
Carburetor, Piston, Piston Ring, and Valve Manufacturing
Gasoline Engine and Engine Parts Manufacturing
Vehicular Lighting Equipment Manufacturing
Other Motor Vehicle Electrical and Electronic Equipment Manufacturing
Motor Vehicle Steering and Suspension Components (except Spring) Manufacturing
Motor Vehicle Brake System Manufacturing
Motor Vehicle Transmission and Power Train Parts Manufacturing
Motor Vehicle Seating and Interior Trim Manufacturing
Motor Vehicle Metal Stamping
Motor Vehicle Air-Conditioning Manufacturing
All Other Motor Vehicle Parts Manufacturing
Aircraft Manufacturing
Aircraft Engine and Engine Parts Manufacturing
Other Aircraft Parts and Auxiliary Equipment Manufacturing
Guided Missile and Space Vehicle Manufacturing
Guided Missile and Space Vehicle Propulsion and Propulsion Unit Parts Manufacturing
Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing
AeA
Definition
x
x
x
Pittsburgh
Anderson Economic
Technology
Group 2001 HighCouncil Definition
Tech Definition
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Carnegie Mellon /
SSTI Definition:
Aggregate
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
U.S. Department of
Commerce, Office of
Technology Policy
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
U.S. Bureau of Labor
Statistics (1999,
Converted From
SICs)
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Table 1. Matrix of Technology Industry Definitions From Selected Sources (continued)
NAICS
336611
336612
336992
336999
339111
339112
339113
339114
339115
339116
339932
339991
339999
423410
423420
423430
423440
423450
423460
423490
511110
511120
511130
511140
511191
511199
511210
516110
517110
517211
517212
517310
517410
517510
517910
518111
518112
518210
519110
519120
519190
519191
Industry
Ship Building and Repairing
Boat Building
Military Armored Vehicle, Tank, and Tank Component Manufacturing
All Other Transportation Equipment Manufacturing
Laboratory Apparatus and Furniture Manufacturing
Surgical and Medical Instrument Manufacturing
Surgical Appliance and Supplies Manufacturing
Dental Equipment and Supplies Manufacturing
Ophthalmic Goods Manufacturing
Dental Laboratories
Game, Toy, and Children's Vehicle Manufacturing
Gasket, Packing, and Sealing Device Manufacturing
All Other Miscellaneous Manufacturing
Photographic Equipment and Supplies Merchant Wholesalers
Office Equipment Merchant Wholesalers
Computer and Computer Peripheral Equipment and Software Merchant Wholesalers
Other Commercial Equipment Merchant Wholesalers
Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers
Ophthalmic Goods Merchant Wholesalers
Other Professional Equipment and Supplies Merchant Wholesalers
Newspaper Publishers
Periodical Publishers
Book Publishers
Directory and Mailing List Publishers
Greeting Card Publishers
All Other Publishers
Software Publishers
Internet Publishing and Broadcasting
Wired Telecommunications Carriers
Paging Services
Cellular and Other Wireless Communications
Telecommunications Resellers
Satellite Telecommunications
Cable and Other Program Distribution
Other Telecommunications
Internet Service Providers
Web Search Portals
Data Processing, Hosting, and Related Services
News Syndicates
Libraries and Archives
All Other Information Services
On-Line Information Services
AeA
Definition
Pittsburgh
Anderson Economic
Technology
Group 2001 HighCouncil Definition
Tech Definition
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Carnegie Mellon /
SSTI Definition:
Aggregate
U.S. Department of
Commerce, Office of
Technology Policy
U.S. Bureau of Labor
Statistics (1999,
Converted From
SICs)
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Table 1. Matrix of Technology Industry Definitions From Selected Sources (continued)
NAICS
541310
541320
541330
541340
541350
541360
541370
541380
541410
541420
541430
541490
541511
541512
541513
541519
541611
541612
541613
541614
541618
541620
541690
541710
541720
541910
541921
541922
541930
541940
541990
611420
611710
811212
Industry
Architectural Services
Landscape Architectural Services
Engineering Services
Drafting Services
Building Inspection Services
Geophysical Surveying and Mapping Services
Surveying and Mapping (except Geophysical) Services
Testing Laboratories
Interior Design Services
Industrial Design Services
Graphic Design Services
Other Specialized Design Services
Custom Computer Programming Services
Computer Systems Design Services
Computer Facilities Management Services
Other Computer Related Services
Administrative Management and General Management Consulting Services
Human Resources and Executive Search Consulting Services
Marketing Consulting Services
Process, Physical Distribution, and Logistics Consulting Services
Other Management Consulting Services
Environmental Consulting Services
Other Scientific and Technical Consulting Services
Research and Development in the Physical, Engineering, and Life Sciences
Research and Development in the Social Sciences and Humanities
Marketing Research and Public Opinion Polling
Photography Studios, Portrait
Commercial Photography
Translation and Interpretation Services
Veterinary Services
All Other Professional, Scientific, and Technical Services
Computer Training
Educational Support Services
Computer and Office Machine Repair and Maintenance
AeA
Definition
x
x
x
x
x
x
x
Pittsburgh
Anderson Economic
Technology
Group 2001 HighCouncil Definition
Tech Definition
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Carnegie Mellon /
SSTI Definition:
Aggregate
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
U.S. Department of
Commerce, Office of
Technology Policy
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
U.S. Bureau of Labor
Statistics (1999,
Converted From
SICs)
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Appendix C: Technology Industry Data
ABOUT THE DATA
Sources. The industry data used in this report is from the U.S. Census Bureau’s
County Business Patterns (CBP) reports for 2004. Employment, Payroll, and
Establishment data was collected for each 4-digit NAICS code included in our
technology industry definition. In instances where the CBP data was incomplete, we also used data from WorkForce West Virginia (part of West Virginia’s
Department of Commerce). Data on employment at federal anchors were
obtained through secondary sources, including magazine and newspaper articles, press releases, and personal interviews. The data were then refined based
on information provided by personnel at the federal anchors.
Data Limitations. For many industries, the U.S. Census Bureau and WorkForce West Virginia do not provide the exact number of employees at the county
or state level in order to prevent consumers of the data from learning too much
about any individual company. In these cases, the Census Bureau provides a
range in which the true number of employees falls and no information about the
total payroll of the industry. WorkForce West Virginia provides no information
about employment or payroll in these cases.
In order to examine industry-by-industry employment at the state and countylevel, we were required to estimate for some industries the number of employees from the range provided by the Census Bureau.
Estimating County-Level Employment and Payroll. For industries (identified by their 4-digit NAICS code) where only a range was provided by the Census Bureau, we used the following techniques to estimate employment and
payroll.
1.
We narrowed the range using data that was provided about the industry’s parent
industry (the three-digit NAICS code under which the industry falls) and sibling
industries (other four-digit NAICS codes under the same parent industry). This
information was sometimes provided by either the Census Bureau, WorkForce
West Virginia, or both. The industry’s payroll could also often be determined to
fall within a range in this way.
2.
In some cases, there was only one firm in a county for a particular industry. In
some of these cases, a narrower range for the number of employees in the firm
was provided by the Census Bureau. We also spoke with employers in the
region, who were sometimes able to provide us with a specific firm’s employment.
3.
By examining the number or range of employees in an industry in previous
years, we could sometimes identify a trend that would allow us to estimate
whether employment was near the higher or the lower end of the range.
Anderson Economic Group, LLC
C-1
4.
Left with a narrowed range of employees and clues from previous years, we
estimated the number of employees by making a conservative guess, toward the
lower end of the range, in order not to overestimate the size of the industry.
5.
After narrowing the possible payroll, we estimated the average wage of the
industry in a given county by assuming it is equal to the same industry’s average
wage at the state level, and multiplied it by the estimated number of employees.
If the payroll was not available at the state level, we looked for further clues
from past years, and from the average wage at the national level—picking the
more conservative estimate, guided by information about similar industries in
the county.
Forecasting Employment For 2006. In order to project the number of technology employees by 4-digit NAICS industry for 2006, we relied on data from the
U.S. Census Bureau and WorkForce West Virginia. We reviewed the employment forecasts by Workforce West Virginia for each industry sector at the state
and regional level. To further refine our projections, we analyzed past growth by
industry at the state level using County Business Pattern data.
We estimated technology employment by 4-digit NAICS industry using an average annual growth rate of 1.0% for all industries. Based on our analysis of the
state and regional forecasts by Workforce West Virginia, our 1.0% growth rate
provides a conservative estimate of future technology employment in the
region.
Forecasting Wages For 2006. In order to make our 2006 average wage projections, we calculated an annual growth rate for each technology cluster for the
two-year time period between 2004 and 2006. We did this by first reviewing
average annual wage growth between 2002 and 2004 by technology cluster at
the state level. We compared this historic wage growth by each technology cluster with average wage growth in high employment 4 digit-NAICS sectors in
each of our technology clusters. We also reviewed recent wage growth by
national industries important in the North-Central region.
Using this information, and current wage information from Workforce First
West Virginia, we developed an average annual growth rate for the two-year
period for each technology cluster. The annual growth rates we used are 5.0%
for chemical and materials; 3.9% for information technology; 6.5% for other
technologies; and 10.5% for advanced manufacturing.
Anderson Economic Group, LLC
C-2
Appendix Table C-1. North Central West Virginia and I-79 Technology Clusters, 4-Digit NAICS Data, 2004 and 06
Employment 2004
Cluster
Advanced Manufacturing
NAICS
Industry
Northern West Virginia
Employment 2006
I-79 Tech Corridor
Northern West Virginia
I-79 Tech Corridor
3329
3331
3332
3333
3336
3339
3345
3353
3359
3362
3363
3364
3369
Other Fabricated Metal Product Manufacturing
Agriculture, Construction & Mining Machinery Manufacturing
Industrial Machinery Manufacturing
Commercial & Service Industry Machinery Manufacturing
Engine, Turbine & Power Transmission Equipment Manufacturing
Other General Purpose Machinery Manufacturing
Navigational, Measuring, Electromedical, Control Instruments Manufacturing
Electrical Equipment Manufacturing
Other Electrical Equipment & Component Manufacturing
Motor Vehicle Body & Trailer Manufacturing
Motor Vehicle Parts Manufacturing
Aerospace Product & Parts Manufacturing
Other Transportation Equipment Manufacturing
576
174
14
39
7
214
45
5
340
260
10
1,131
2
2,817
130
168
7
7
7
84
45
5
230
50
5
475
1,213
588
178
14
40
7
218
46
5
347
265
10
1,154
2
2,874
133
171
7
7
7
86
46
5
235
51
5
485
1,237
3241
3251
3252
3253
3255
3259
Petroleum & Coal Products Manufacturing
Basic Chemical Manufacturing
Resin, Synthetic Rubber, & Artificial Synthetic Fibers Manufacturing
Pesticide, Fertilizer & Other Ag Chemical Manufacturing
Paint, Coating & Adhesive Manufacturing
Other Chemical Product & Preparation Manufacturing
196
2,267
1,559
2
34
257
4,315
5
175
180
200
2,313
1,590
2
35
262
4,402
5
179
184
3341
3344
5112
5171
5172
5173
5181
5182
5415
Computer & Peripheral Equipment Manufacturing
Semiconductor & Other Electronic Component Manufacturing
Software Publishers
Wired Telecommunications Carriers
Wireless Telecommunications Carriers (Except Satellite)
Telecommunications Resellers
Internet Service Providers and Web Search Portals
Data Processing, Hosting, and Related Services
Computer Systems Design & Related Services
255
175
21
884
244
12
104
508
1,039
3,242
10
526
158
5
91
153
552
1,495
2111
3254
3391
4234
5413
5417
Oil & Gas Extraction
Pharmaceutical & Medicine Manufacturing
Medical Equipment & Supplies Manufacturing
Professional and Commercial Equipment and Supplies Merchant Wholesalers
Architectural, Engineering & Related Services
Scientific R&D Services
496
1,355
29
373
1,484
366
4,103
218
1,305
15
253
997
276
3,064
260
179
21
902
249
12
106
518
1,060
3,307
506
1,382
30
381
1,514
373
4,186
10
537
161
5
93
156
563
1,525
222
1,331
15
258
1,017
282
3,126
----------------
----------------
9
2,551
361
239
120
3,280
9
2,551
361
239
120
3,280
----
----
18,049
9,352
Total
Chemical and Material
Total
Information Technology
Total
Other Technologies
Total
Federal Anchors
----------------
DoD, Biometrics Fusion Center
FBI, Criminal Justice Information Services Division (CJIS)
CDC, National Institute for Occupational Safety and Health (NIOSH)
DoE, National Energy Technology Laboratory (NETL)
NASA, Independent Verification and Validation Facility (NASA IV & V)
Total
Total Techology Industry Employment
Base Data: U.S. Census, County Business Patterns
Analysis: Anderson Economic Group
Anderson Economic Group, LLC
10/16/2006
P:\Current Projects\WVHTC-TechIndustry06\Data & Analysis\CBP Tech Industry\WV_bycounty_naics
Appendix D: Demographic and Economic
Data
In this section we include the following tables:
Table D-1: Nonfarm Employment (1,000s) by Industry in West Virginia, Annual
Averages 1940-1989
Table D-2: Nonfarm Employment (1,000s) by Industry in West Virginia, Annual
Averages 1990-2005
Table D-3: West Virginia Coal Production and Employment, 1940-2004
Table D-4: Population by County in West Virginia, 2000-2004
Table D-5: Labor Force Statistics and Unemployment Rate in West Virginia,
1976-2005
Table D-6: Unemployment Rate by County in North Central West Virginia,
1990-2005
Table D-7: Educational Attainment by County in West Virginia, 2000
Table D-8: Per Capita Income by County in West Virginia, 2000
Anderson Economic Group, LLC
D-1
Appendix Table D-1. Nonfarm Employment (1,000s) by Industry in West Virginia, Annual Averages 1940-1989
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
Goods Producing
Mining
Coal Mining
Construction
Manufacturing
228.5
118.4
NA
10.6
99.5
257.0
122.4
NA
14.4
120.2
288.0
140.6
NA
19.1
128.3
279.4
129.4
NA
16.4
133.6
266.2
123.6
NA
9.3
133.3
262.1
117.5
NA
10.2
134.4
267.6
122.2
NA
13.1
132.3
285.7
129.1
NA
18.1
138.5
300.9
138.1
131.7
21.0
141.8
274.2
125.8
120.0
19.8
128.6
273.7
122.8
117.5
19.5
131.4
282.5
123.9
118.9
18.7
139.9
268.8
114.3
108.9
18.2
136.3
257.2
97.7
92.1
21.6
137.9
223.1
77.0
71.3
18.8
127.3
226.0
76.2
70.9
19.3
130.5
238.8
83.0
77.8
22.9
132.9
Service Producing
Transportation & Public Utilities
Trade
Finance, Insurance, & Real Estate
Services
Government
171.0
38.9
54.3
7.8
27.4
42.6
181.6
41.5
56.9
8.5
28.4
46.3
185.6
43.4
55.6
7.9
30.0
48.7
187.2
45.2
54.8
7.4
30.3
49.5
192.6
46.4
55.8
7.4
32.5
50.5
198.8
46.9
58.1
7.5
33.5
52.8
215.1
47.6
66.8
8.3
38.3
54.1
234.0
52.2
75.0
8.8
42.7
55.3
250.0
56.8
82.9
9.0
45.0
56.3
248.9
52.6
83.6
9.4
44.6
58.7
250.7
53.7
83.1
10.1
44.3
59.5
255.1
57.2
84.0
10.4
45.1
58.4
257.7
55.6
85.3
10.8
46.3
59.7
256.0
54.3
84.7
11.0
46.4
59.6
252.2
49.8
83.0
11.5
46.6
61.3
254.6
49.8
84.3
11.9
47.3
61.3
263.6
52.4
87.4
12.4
48.9
62.5
Total Nonfarm Payroll Employment
399.5
438.6
473.6
466.6
458.8
460.9
482.7
519.7
550.9
523.1
524.3
537.5
526.4
513.1
475.4
480.5
502.3
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
Goods Producing
Mining
Coal Mining
Construction
Manufacturing
243.3
82.3
77.4
28.0
133.0
212.0
69.7
64.2
20.1
122.2
207.5
60.9
55.6
20.0
126.6
199.3
56.3
51.0
18.4
124.6
188.8
49.9
44.2
18.8
120.1
189.6
49.2
43.3
17.8
122.6
190.3
47.7
42.2
18.4
124.2
195.0
48.3
43.8
20.5
126.2
199.0
47.9
42.4
21.9
129.2
205.1
47.2
42.0
24.9
133.0
204.9
47.5
42.6
24.2
133.2
203.9
45.5
40.7
26.0
132.4
204.9
47.1
42.3
26.8
131.0
205.0
49.9
45.3
28.6
126.5
201.8
48.1
43.6
30.8
122.9
211.2
53.7
49.5
34.2
123.3
215.8
52.4
48.1
34.4
129.0
Service Producing
Transportation & Public Utilities
Trade
Finance, Insurance, & Real Estate
Services
Government
265.0
52.7
88.8
12.5
49.4
61.6
258.3
46.8
85.2
12.5
49.5
64.3
257.6
45.5
84.0
12.6
50.2
65.3
260.8
44.4
84.5
13.3
51.1
67.5
259.3
41.6
81.4
13.3
51.5
71.5
258.0
41.3
79.3
13.4
52.6
71.4
259.6
40.8
79.5
13.5
53.7
72.1
266.0
40.8
81.5
13.7
54.7
75.3
277.6
40.7
85.0
14.1
56.1
81.7
290.2
40.6
87.7
14.3
59.1
88.5
298.7
40.9
89.0
14.5
62.2
92.1
304.5
41.3
90.8
14.7
62.8
94.9
307.3
41.1
91.4
15.1
64.7
95.0
311.5
41.5
91.6
15.7
66.8
95.9
318.2
40.9
96.1
15.9
67.3
98.0
329.3
40.4
102.0
17.1
70.4
99.4
345.8
40.7
108.8
17.7
74.4
104.2
Total Nonfarm Payroll Employment
508.5
470.3
465.0
460.0
448.1
447.5
449.9
460.9
476.6
495.1
503.6
508.4
512.3
516.5
520.0
540.5
561.6
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
Goods Producing
Mining
Coal Mining
Construction
Manufacturing
219.6
55.8
51.3
31.7
132.1
215.5
63.9
59.5
30.5
121.1
226.2
68.6
64.1
33.2
124.4
229.5
66.7
62.1
39.0
123.8
227.0
56.7
51.6
43.7
126.6
233.1
68.0
62.5
39.0
126.1
218.7
65.7
59.7
35.8
117.2
200.8
59.0
52.1
30.3
111.5
186.0
63.5
56.3
24.4
98.1
160.0
48.6
41.8
21.6
89.8
162.3
48.8
41.8
22.0
91.5
157.1
44.8
38.2
22.8
89.5
150.1
40.5
34.8
22.8
86.8
146.6
36.4
31.1
24.0
86.2
145.9
34.6
29.4
24.3
87.0
145.7
33.3
27.8
24.6
87.8
Service Producing
Transportation & Public Utilities
Trade
Finance, Insurance, & Real Estate
Services
Government
352.9
40.7
110.5
18.0
77.3
106.4
359.2
39.6
113.5
18.4
79.6
108.1
370.0
39.6
117.8
18.9
84.1
109.6
382.0
40.7
123.4
20.0
86.9
111.0
406.2
40.2
131.8
21.2
92.7
120.3
425.3
43.8
131.9
21.7
97.8
130.1
427.1
43.1
129.4
22.0
99.5
133.1
427.8
41.9
131.9
22.1
101.7
130.2
421.9
41.7
127.9
22.1
103.4
126.8
422.3
39.4
127.4
22.2
105.5
127.8
434.3
39.3
131.9
23.2
109.2
130.7
440.2
38.2
134.5
23.6
116.4
127.5
447.5
36.9
136.7
23.7
121.3
128.9
452.4
36.4
138.9
24.1
124.8
128.2
463.9
36.6
142.7
24.3
131.1
129.3
469.0
36.6
144.8
24.1
137.5
125.9
Total Nonfarm Payroll Employment
572.4
574.7
596.3
611.6
633.1
658.6
645.9
628.5
607.8
582.3
596.6
597.2
597.5
599.0
609.8
614.7
Base Data: U.S. Bureau of Labor Statistics
Source: Workforce West Virginia, Department of Commerce
Anderson Economic Group, LLC
D-2
Appendix Table D-2. Nonfarm Employment (1,000s) by Industry in West Virginia, Annual Averages 1990-2005
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Private Sector
502.6
501.2
507.5
519.6
537.9
551.4
559.9
568.7
578.5
585.1
592.7
594.2
590.2
585.1
593.7
602.9
Goods Producing
144.2
34.0
32.8
26.8
28.2
82.0
139.1
32.6
31.5
25.7
27.5
79.0
137.1
30.9
29.7
24.1
27.9
78.3
136.0
26.2
24.9
19.3
31.1
78.8
139.1
28.2
26.8
21.2
33.7
77.2
139.2
27.7
26.3
21.1
33.1
78.4
138.1
26.2
24.8
19.8
34.3
77.6
136.9
25.1
23.7
18.6
34.9
76.9
136.7
24.6
23.1
17.5
34.4
77.7
133.0
22.3
20.8
15.5
33.8
76.9
131.2
21.4
19.8
14.9
34.0
75.9
130.6
23.5
22.1
16.6
34.9
72.2
125.2
23.1
21.7
16.1
33.4
68.7
119.2
22.0
20.7
14.7
32.7
64.5
121.4
23.8
22.5
15.8
34.6
63.0
124.5
25.9
24.7
17.3
36.8
61.9
485.8
135.6
24.0
82.3
29.3
12.0
26.2
20.3
5.9
32.7
70.0
47.8
34.1
127.4
489.7
133.8
23.5
81.4
28.9
12.0
26.1
20.3
5.8
33.3
75.0
47.7
34.1
127.7
502.7
134.2
22.7
81.9
29.6
12.0
26.0
20.1
6.0
35.0
79.2
49.5
34.4
132.3
516.4
137.6
22.3
84.2
31.1
12.0
26.6
20.5
6.1
37.4
83.5
51.4
35.0
132.8
535.3
142.5
22.5
86.9
33.2
12.3
27.3
21.0
6.3
39.7
86.7
53.8
36.5
136.5
548.6
144.0
22.8
89.8
31.5
12.4
27.9
21.3
6.7
43.1
89.6
57.2
38.0
136.4
560.5
143.9
22.8
90.7
30.4
12.8
28.3
21.7
6.6
45.5
91.0
58.3
42.0
138.7
570.9
143.4
24.0
90.3
29.0
12.9
29.4
22.7
6.7
47.8
93.6
59.2
45.5
139.1
582.5
143.8
24.3
91.1
28.5
13.4
29.8
23.0
6.7
51.0
96.8
60.3
46.6
140.8
593.0
145.2
24.3
92.7
28.3
14.0
30.6
23.8
6.8
53.7
98.0
60.6
49.9
140.9
604.6
144.7
24.1
93.3
27.4
14.1
31.2
24.3
6.9
55.9
99.8
62.0
53.7
143.1
604.7
140.0
23.9
89.7
26.4
14.1
30.7
23.7
7.0
57.4
103.2
63.0
55.3
141.1
607.8
136.9
23.2
88.2
25.6
13.3
31.2
24.0
7.2
56.7
107.2
64.4
55.3
142.8
608.4
135.5
22.7
87.7
25.1
12.5
30.8
23.6
7.2
56.7
108.8
66.4
55.2
142.5
615.5
137.3
23.2
88.7
25.4
11.9
30.3
23.1
7.2
58.4
110.8
68.2
55.5
143.2
622.1
139.3
24.2
89.4
25.8
11.6
29.8
22.4
7.4
58.8
113.5
69.5
55.9
143.7
630.0
628.8
639.8
652.4
674.4
687.8
698.6
707.8
719.3
726.0
735.8
735.3
733.1
727.6
736.9
746.6
Natural Resources and Mining
Mining
Coal Mining
Construction
Manufacturing
Service Producing
Trade, Transportation, and Utilities
Wholesale Trade
Retail Trade
Transportation, Warehousing, and Utilities
Information
Financial Activities
Finance and Insurance
Real Estate and Rental and Leasing
Professional and Business Services
Educational and Health Services
Leisure and Hospitality
Other Services
Government
Total Nonfarm Payroll Employment
Note: The BLS provides employment and payroll figures by NAICS sectors after 1990. Prior to 1990, employment figures are based on SIC codes.
Base Data: U.S. Bureau of Labor Statistics
Source: Workforce West Virginia, Department of Commerce
Anderson Economic Group, LLC
D-3
Appendix Table D-3. West Virginia Coal Production and Employment, 1940-2004
Year
Output
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
126,619,825
140,944,744
156,752,598
160,429,576
164,954,218
151,909,714
143,977,874
173,653,816
168,589,033
122,913,540
145,563,295
163,448,001
142,181,271
131,872,563
113,039,046
137,073,372
150,401,233
150,220,548
115,245,791
117,770,002
120,107,994
111,370,863
117,018,419
128,924,165
139,361,204
149,236,013
148,826,592
152,461,567
145,113,560
139,315,720
143,132,284
118,317,785
122,856,378
Average Labor
Employment Productivity (O/E)
130,457
112,875
112,817
105,585
103,146
97,380
102,393
116,421
125,669
121,121
119,568
111,562
100,862
84,093
64,849
54,321
68,318
66,792
55,065
52,352
48,696
42,557
43,456
44,854
44,205
44,885
43,344
42,742
41,573
41,941
45,261
48,858
48,190
971
1,249
1,389
1,519
1,599
1,560
1,406
1,492
1,342
1,015
1,217
1,465
1,410
1,568
1,743
2,523
2,201
2,249
2,093
2,250
2,466
2,617
2,693
2,874
3,153
3,325
3,434
3,567
3,491
3,322
3,162
2,422
2,549
Year
Output
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
115,239,146
101,713,580
109,048,898
108,793,594
95,405,977
84,697,048
112,380,883
121,583,762
112,813,972
128,778,076
115,135,454
131,040,566
127,867,375
130,787,233
137,672,276
144,917,788
151,834,721
171,155,053
166,715,271
163,797,710
133,700,856
164,200,572
167,096,211
174,008,217
181,914,000
180,794,012
169,206,834
169,370,602
175,052,857
163,896,890
144,899,599
153,631,633
Average Labor
Employment Productivity (O/E)
45,041
46,026
55,256
59,802
61,815
62,982
58,565
55,502
55,411
53,941
35,831
39,950
35,913
32,329
28,885
28,100
28,323
28,876
27,479
27,065
22,386
21,414
21,602
18,939
18,165
17,382
14,845
14,281
15,729
15,377
14,871
16,037
2,559
2,210
1,974
1,819
1,543
1,345
1,919
2,191
2,036
2,387
3,213
3,280
3,560
4,046
4,766
5,157
5,361
5,927
6,067
6,052
5,973
7,668
7,735
9,188
10,015
10,401
11,398
11,860
11,129
10,659
9,744
9,580
Source: West Virginia Coal Association, "Coal Facts 2005"
Analysis: Anderson Economic Group, LLC
Anderson Economic Group, LLC
D-4
Appendix Table D-4. Population by County in West Virginia, 2000-2004
Population Estimates
Geographic Area
July 1, 2004
.Barbour County
.Brooke County
.Doddridge County
.Gilmer County
.Grant County
.Hancock County
.Harrison County
.Marion County
.Marshall County
.Mineral County
.Monongalia County
.Ohio County
.Pleasants County
.Preston County
.Ritchie County
.Taylor County
.Tucker County
.Tyler County
.Wetzel County
.Wood County
North Central WV
.Berkeley County
.Boone County
.Braxton County
.Cabell County
.Calhoun County
.Clay County
.Fayette County
.Greenbrier County
.Hampshire County
.Hardy County
.Jackson County
.Jefferson County
.Kanawha County
.Lewis County
.Lincoln County
.Logan County
.Mason County
.McDowell County
.Mercer County
.Mingo County
.Monroe County
.Morgan County
.Nicholas County
.Pendleton County
.Pocahontas County
.Putnam County
.Raleigh County
.Randolph County
.Roane County
.Summers County
.Upshur County
.Wayne County
.Webster County
.Wirt County
.Wyoming County
Total West Virginia
July 1, 2003
July 1, 2002
July 1, 2001
July 1, 2000
2000 Census
15,476
24,785
7,418
6,982
11,537
31,507
68,303
56,453
34,722
27,145
83,918
45,410
7,441
29,856
10,486
16,202
7,046
9,365
17,048
87,100
15,602
24,983
7,468
7,032
11,442
31,808
68,093
56,512
34,916
27,143
83,734
45,659
7,411
29,768
10,513
16,171
7,160
9,438
17,117
87,430
15,541
25,053
7,452
7,016
11,353
32,070
68,001
56,334
35,022
27,115
82,723
46,273
7,541
29,650
10,423
16,138
7,237
9,413
17,264
87,731
15,445
25,194
7,458
7,119
11,349
32,303
68,061
56,267
35,303
27,038
82,320
46,665
7,540
29,309
10,351
16,109
7,219
9,529
17,314
87,742
15,548
25,375
7,416
7,166
11,287
32,627
68,597
56,513
35,404
27,043
81,862
47,336
7,507
29,307
10,337
16,102
7,298
9,592
17,679
87,898
15,557
25,447
7,403
7,160
11,299
32,667
68,652
56,598
35,519
27,078
81,866
47,427
7,514
29,334
10,343
16,089
7,321
9,592
17,693
87,986
598,200
599,400
599,350
599,635
601,894
602,545
89,362
25,721
14,950
94,801
7,415
10,424
47,049
34,886
21,542
13,209
28,477
47,663
195,218
17,132
22,564
36,502
25,941
24,726
62,070
27,389
13,568
15,810
26,276
7,897
8,995
53,836
79,175
28,495
15,359
13,809
23,996
42,515
9,849
5,835
24,698
85,439
25,745
14,837
95,110
7,356
10,329
47,351
34,778
21,272
13,064
28,238
46,414
195,823
17,082
22,423
36,769
26,091
25,341
62,134
27,610
13,470
15,571
26,289
7,910
8,991
53,033
79,252
28,261
15,392
13,958
23,770
42,468
9,777
5,804
24,888
81,462
25,667
14,809
95,432
7,372
10,398
47,153
34,609
20,969
12,841
28,239
44,972
196,109
16,909
22,325
37,010
26,056
26,062
62,170
27,735
13,330
15,327
26,381
7,939
8,959
52,309
79,252
28,388
15,299
14,009
23,402
42,439
9,749
5,851
24,947
78,719
25,501
14,763
95,829
7,419
10,296
47,226
34,444
20,674
12,809
28,057
43,448
197,766
16,926
22,181
36,897
26,080
26,561
62,022
27,578
13,258
15,232
26,322
8,073
8,942
51,730
78,546
28,273
15,461
14,224
23,358
42,778
9,681
5,889
25,226
76,440
25,512
14,713
96,665
7,583
10,341
47,518
34,421
20,318
12,695
28,056
42,449
199,687
16,877
22,132
37,585
25,967
27,171
62,943
28,034
13,218
15,015
26,558
8,167
9,111
51,752
79,092
28,218
15,469
14,323
23,412
42,911
9,700
5,881
25,608
75,905
25,535
14,702
96,784
7,582
10,330
47,579
34,453
20,203
12,669
28,000
42,190
200,073
16,919
22,108
37,710
25,957
27,329
62,980
28,253
14,583
14,943
26,562
8,196
9,131
51,589
79,220
28,262
15,446
12,999
23,404
42,903
9,719
5,873
25,708
1,815,354
1,811,440
1,805,230
1,801,824
1,807,436
1,808,344
Data Source: U.S. Census Bureau, Population Division
Analysis: Anderson Economic Group, LLC
Anderson Economic Group, LLC
D-5
Appendix Table D-5. Labor Force Statistics and Unemployment Rate in West Virginia, 1976-2005
Year
Labor force
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
698,047
718,080
741,651
763,238
776,583
770,684
771,250
774,919
759,243
749,518
744,309
743,922
746,505
749,438
756,306
769,291
777,421
778,015
780,764
785,582
794,589
800,715
807,092
813,380
808,861
800,623
798,003
793,833
790,936
800,383
Employment
646,629
670,524
697,281
710,401
701,820
688,256
660,867
639,713
647,587
648,775
654,958
663,451
674,110
684,483
691,184
688,512
689,628
696,784
712,664
723,904
735,710
746,442
754,629
762,395
764,649
758,904
750,888
746,276
748,994
760,640
Unemployment
51,418
47,556
44,370
52,837
74,763
82,428
110,383
135,206
111,656
100,743
89,351
80,471
72,395
64,955
65,122
80,779
87,793
81,231
68,100
61,678
58,879
54,273
52,463
50,985
44,212
41,719
47,115
47,557
41,942
39,743
Unemployment Rate
7.4%
6.6%
6.0%
6.9%
9.6%
10.7%
14.3%
17.4%
14.7%
13.4%
12.0%
10.8%
9.7%
8.7%
8.6%
10.5%
11.3%
10.4%
8.7%
7.9%
7.4%
6.8%
6.5%
6.3%
5.5%
5.2%
5.9%
6.0%
5.3%
5.0%
Data Source: U.S. Bureau of Labor Statistics
Anderson Economic Group, LLC
D-6
Appendix Table D-6. Unemployment Rate* (%) by County in North-Central West Virginia, 1990-2005
County
Barbour
Brooke
Doddridge
Gilmer
Grant
Hancock
Harrison
Marshall
Marion
Monongalia
Mineral
Ohio
Pleasants
Preston
Ritchie
Taylor
Tucker
Tyler
Wetzel
Wood
1990
12.8
6.4
7.6
11.2
7.1
5.8
8.8
7.6
9.1
6.6
6.9
5.4
10.3
10.2
14.4
10.1
12.3
10.1
11.2
7.1
1991
17.6
9.3
7.1
12.0
9.7
8.6
10.3
10.3
10.6
7.0
8.4
6.8
13.7
11.3
14.2
12.1
12.9
10.0
12.8
8.7
1992
17.2
11.7
10.0
12.8
10.3
10.8
11.2
12.1
14.8
8.0
9.7
8.5
12.7
12.5
14.5
11.8
13.7
10.5
13.8
9.6
1993
13.7
9.6
10.2
10.6
9.2
9.0
10.2
11.8
15.7
8.2
7.2
7.9
14.2
11.7
15.7
13.6
13.9
9.9
13.5
8.6
1994
11.4
8.4
8.8
9.2
10.7
8.4
8.2
9.0
11.0
4.8
6.4
7.4
10.9
9.0
14.9
9.2
12.8
7.9
10.5
7.2
1995
13.6
6.1
8.3
10.7
10.2
6.1
8.6
7.6
8.8
4.3
6.2
5.1
10.4
8.4
13.4
9.4
11.3
8.5
11.3
7.3
1996
13.4
5.9
7.3
9.0
10.4
6.3
7.9
6.5
10.5
5.1
6.0
4.5
9.2
9.4
13.5
10.2
12.9
7.3
9.8
5.9
1997
11.0
7.9
6.2
7.2
10.6
6.9
7.1
7.2
9.5
4.5
4.9
5.6
7.9
8.6
11.1
7.9
11.8
6.7
8.9
5.3
1998
11.4
5.6
7.6
7.6
9.5
5.4
7.0
6.0
7.7
3.5
6.8
4.4
10.8
6.8
10.9
7.7
10.8
8.3
10.2
6.2
1999
10.5
5.6
5.7
9.1
8.1
6.0
6.6
6.1
7.6
3.2
6.7
3.9
8.4
5.9
9.3
7.5
8.8
7.1
10.3
5.1
2000
7.9
4.5
5.8
7.3
5.3
4.5
5.7
5.7
5.7
4.4
5.4
4.4
5.8
5.6
6.2
5.4
6.3
5.9
8.0
4.5
2001
6.8
5.0
5.7
5.5
4.5
4.5
5.4
6.0
5.2
3.7
5.6
4.4
5.9
5.1
6.8
5.5
5.9
6.1
8.3
4.9
2002
7.2
5.8
6.6
6.6
6.4
5.3
5.9
6.6
5.9
4.0
6.5
5.1
6.9
6.0
7.1
5.8
7.8
6.8
8.2
5.6
2003
7.1
6.2
5.9
6.1
7.6
5.9
5.9
6.4
5.6
3.9
6.3
5.4
7.6
6.0
7.8
5.8
7.3
7.4
8.2
6.0
2004
6.4
7.3
5.0
4.5
6.7
7.6
5.3
6.0
4.9
3.4
5.7
5.1
6.1
5.1
6.6
4.9
6.6
7.4
8.7
5.4
2005
6.0
7.1
4.8
4.4
6.1
7.3
4.6
5.6
4.4
3.2
5.1
4.8
6.2
4.5
5.7
5.1
6.2
7.2
9.2
5.4
I-79 Tech Corridor
8.0
9.1
10.8
10.8
7.5
6.9
7.4
6.7
5.8
5.5
5.2
4.6
5.1
5.0
4.4
3.9
North Central Region
8.6
10.5
12.3
11.5
8.9
8.1
7.9
7.4
6.9
6.4
5.5
5.3
6.1
6.2
5.7
5.3
* Unemployment rate is not seasonally adjusted.
Source: U.S. Bureau of Labor Statistics
Analysis: Anderson Economic Group, LLC
Anderson Economic Group, LLC
D-7
Appendix Table D-7. Educational Attainment by County in West Virginia, 2000
County
Barbour
Brooke
Doddridge
Gilmer
Grant
Hancock
Harrison
Marion
Marshall
Mineral
Monongalia
Ohio
Pleasants
Preston
Ritchie
Taylor
Tucker
Tyler
Wetzel
Wood
Graduate or
Bachelor's Degree
Professional Degree
4.5%
6.4%
3.7%
9.0%
2.0%
7.3%
5.2%
8.9%
3.5%
7.0%
3.3%
7.7%
5.0%
10.0%
2.1%
3.1%
5.2%
9.8%
4.8%
6.1%
12.8%
13.9%
8.5%
12.2%
3.4%
5.6%
4.1%
6.0%
2.2%
4.5%
3.6%
6.8%
4.1%
6.1%
2.9%
5.1%
3.9%
5.7%
5.1%
9.0%
North Central WV
14.4%
20.0%
16.2%
24.3%
13.3%
18.2%
18.9%
10.4%
22.0%
17.9%
29.9%
23.2%
17.0%
14.0%
17.8%
16.1%
14.2%
18.7%
15.9%
22.6%
3.1%
5.5%
2.6%
3.1%
3.0%
6.1%
4.3%
1.7%
5.2%
6.4%
3.3%
5.0%
4.7%
2.8%
4.9%
3.8%
2.7%
4.2%
4.5%
6.1%
HS Diploma or
Equivalent
44.9%
42.1%
41.1%
31.9%
44.4%
47.0%
39.6%
33.6%
38.4%
45.5%
26.3%
34.3%
48.0%
47.2%
43.4%
43.8%
49.0%
44.2%
47.3%
37.9%
Some College
Associate Degree
Some HS, No
diploma
15.2%
12.5%
19.3%
15.2%
16.1%
11.9%
16.0%
26.5%
12.8%
13.2%
9.8%
11.5%
13.0%
15.3%
17.1%
16.7%
14.5%
16.1%
15.4%
12.9%
Less than 9th
grade
11.6%
7.2%
11.6%
11.3%
12.6%
5.8%
6.2%
22.7%
6.8%
6.1%
3.9%
5.3%
8.4%
10.6%
10.0%
9.1%
9.5%
8.7%
7.3%
6.4%
5.8%
9.0%
20.6%
4.5%
38.6%
13.9%
7.5%
Berkeley
Boone
Braxton
Cabell
Calhoun
Clay
Fayette
Greenbrier
Hampshire
Hardy
Jackson
Jefferson
Kanawha
Lewis
Lincoln
Logan
Mason
McDowell
Mercer
Mingo
Monroe
Morgan
Nicholas
Pendleton
Pocahontas
Putnam
Raleigh
Randolph
Roane
Summers
Upshur
Wayne
Webster
Wirt
Wyoming
5.3%
2.1%
2.9%
7.4%
3.5%
2.6%
3.6%
5.4%
4.5%
3.4%
3.9%
7.5%
7.3%
3.8%
2.5%
3.8%
3.6%
3.5%
4.6%
3.1%
2.6%
4.4%
3.7%
3.6%
3.5%
6.4%
4.2%
4.3%
3.7%
3.3%
4.4%
4.2%
2.8%
2.6%
2.7%
8.7%
4.4%
5.6%
11.3%
4.9%
3.9%
6.4%
7.2%
6.0%
5.3%
7.5%
11.6%
11.8%
6.5%
2.9%
4.2%
6.6%
4.6%
8.2%
3.4%
5.0%
6.1%
5.4%
6.6%
7.5%
12.0%
7.5%
8.4%
4.6%
6.4%
7.7%
6.7%
5.4%
6.4%
3.8%
17.8%
13.4%
14.0%
25.6%
13.2%
10.6%
16.6%
16.1%
12.7%
13.6%
20.9%
21.3%
19.4%
16.5%
12.8%
15.2%
18.6%
14.0%
19.4%
13.8%
15.9%
15.9%
14.9%
15.9%
13.8%
21.0%
20.2%
15.6%
13.8%
14.3%
19.0%
17.4%
11.3%
15.3%
13.5%
4.2%
3.8%
2.9%
4.5%
2.2%
2.2%
3.5%
3.8%
3.4%
3.1%
5.4%
4.0%
4.7%
2.4%
2.8%
5.2%
5.2%
4.0%
4.1%
4.2%
2.9%
2.9%
2.7%
3.9%
3.6%
5.4%
4.3%
3.4%
2.8%
1.7%
2.7%
3.8%
2.2%
3.1%
3.1%
40.9%
41.7%
42.8%
32.1%
38.8%
44.6%
39.7%
40.9%
44.5%
45.3%
39.5%
34.4%
36.2%
44.3%
42.3%
35.6%
45.4%
46.1%
36.3%
36.0%
47.5%
46.0%
44.0%
42.4%
43.2%
38.2%
36.5%
42.3%
42.1%
40.5%
42.5%
38.3%
37.4%
44.2%
42.7%
15.6%
20.9%
17.8%
13.3%
16.0%
19.0%
18.1%
16.7%
18.4%
17.3%
13.5%
14.5%
14.1%
15.7%
19.7%
21.7%
13.4%
17.1%
17.3%
22.1%
13.3%
16.5%
17.1%
14.6%
16.7%
11.2%
17.7%
15.9%
19.8%
17.1%
14.1%
18.7%
20.7%
17.4%
17.4%
7.5%
13.7%
14.1%
5.8%
21.5%
17.1%
12.2%
9.9%
10.6%
12.0%
9.3%
6.7%
6.4%
10.9%
17.1%
14.3%
7.3%
10.7%
10.1%
17.4%
12.8%
8.3%
12.1%
13.0%
11.7%
5.8%
9.5%
10.2%
13.4%
16.7%
9.7%
10.9%
20.4%
10.8%
16.9%
State of West Virginia
5.3%
8.4%
18.9%
4.2%
38.8%
15.4%
9.0%
Base Data: U.S. Census Bureau
Analysis: Anderson Economic Group, LLC
Anderson Economic Group, LLC
D-8
Appendix Table D-8. Per Capita Income by County in West Virginia, 2000
North Central WV
Barbour County
Brooke County
Doddridge County
Gilmer County
Grant County
Hancock County
Harrison County
Marion County
Marshall County
Mineral County
Monongalia County
Ohio County
Pleasants County
Preston County
Ritchie County
Taylor County
Tucker County
Tyler County
Wetzel County
Wood County
$
Remaining WV Counties
12,440
17,131
13,507
12,498
15,696
17,724
16,810
16,246
16,472
15,384
17,106
17,734
16,920
13,596
15,175
13,681
16,349
15,216
16,818
18,073
Berkeley County
Boone County
Braxton County
Cabell County
Calhoun County
Clay County
Fayette County
Greenbrier County
Hampshire County
Hardy County
Jackson County
Jefferson County
Kanawha County
Lewis County
Lincoln County
Logan County
Mason County
Mercer County
McDowell County
Mingo County
$
17,982
14,453
13,349
17,638
11,491
12,021
13,809
16,247
14,851
15,859
16,205
20,441
20,354
13,933
13,073
14,102
14,804
15,564
10,174
12,445
Monroe County
Morgan County
Nicholas County
Pendleton County
Pocahontas County
Putnam County
Raleigh County
Randolph County
Roane County
Summers County
Upshur County
Wayne County
Webster County
Wirt County
Wyoming County
$
18,109
15,207
15,805
16,920
14,384
20,471
16,233
14,918
13,195
12,419
13,559
14,906
12,284
14,000
14,220
Source: U.S. Census Bureau
Analysis: Anderson Economic Group, LLC
Anderson Economic Group, LLC
D-9
Appendix E: Economic Impact Data Sheets
In this section we include the following tables:
Table E-1: Economic Impact of Construction, Selected I-79 Technology Park
Projects
Table E-2: Ratio of Salary to In-State, Out-of-Industry Operating Expenses, by
Technology Cluster
Table E-3: Operating Expenditures by North-Central West Virginia Technology
Industry, by Cluster
Anderson Economic Group, LLC
E-1
Table E-1. Economic Impact of Construction, Selected I-79 Technology Park Projects
Total Construction Expenditure:
Share In-State (%)
$
179,009,351
62%
Net In-State Expenditure (Direct Impact):
$
111,269,431
Final Demand Multipliers*
Output:
Earnings:
Indirect Impact on Output:
1.10
0.70
$
122,396,374
$
77,888,602
$
311,554,407
((net in-state * output multiplier)-direct impact)
Indirect Impact on Earnings:
(net in-state * earnings multiplier)
Total Direct and Indirect Impact:
*Source: United States Bureau of Economic Analysis, RIMS II data for Clarksburg-Fairmont,
WV region, adjusted to statewide scale by Anderson Economic Group based on market
observations and similiar figures known for other states.
Anderson Economic Group, LLC
E-2
Table E-2. Ratio of Salary to In-State, Out-of-Industry Operating Expenses, by Technology Cluster
Advanced Manufacturing Cluster Operating Costs / Operating Income (%) Data, by NAICS
Cost of Operations
Salaries and Wages
Cost of Goods Sold
Employee Benefits
Advertising
Other Expenses
Total Other Expenditures
Total Annual Cash Expenditure Est.
Operation Costs: In-state, out-of-industry
Other Expenditures: In-state, out-of-industry
Salaries to in-state, out-of-industry expenditures
Weighted Average Ratio for Cluster:
Number of Establishments in NC WV
3329
65.9
6.8
72.7
3331
75.1
6.5
81.6
3332
65.8
11.5
77.3
3333
53.4
16.8
70.2
3336
65.3
14
79.3
3339
65.2
9.1
74.3
3345
61
16.6
77.6
3353
68.6
6.8
75.4
3362
78.1
4
82.1
3363
78.1
4
82.1
3364
67.8
11.9
79.7
3369
71.7
5.8
77.5
2.6
1.3
11.4
15.3
1.5
0.5
14.8
16.8
2.8
0.7
12.2
15.7
4.9
1.7
18.7
25.3
2.4
0.7
10.3
13.4
2.1
0.8
12.2
15.1
2.9
1
16.4
20.3
2.7
0.6
12.2
15.5
1.6
1.6
12.5
15.7
1.6
1.6
12.5
15.7
2.3
0.3
10.8
13.4
2.7
0.9
10.2
13.8
88
98.4
93
95.5
92.7
89.4
97.9
90.9
97.8
97.8
93.1
91.3
25%
85%
25%
85%
25%
85%
25%
85%
25%
85%
25%
85%
25%
85%
25%
85%
25%
85%
25%
85%
25%
85%
25%
85%
23%
30%
20%
39%
48%
51%
31%
51%
22%
12%
12%
42%
20%
6
11
3
5
1
13
2
1
5
3
3
1
Chemical and Material Cluster Operating Costs / Operating Income (%) Data, by NAICS
3241
72.8
6
78.8
3251
72
6.9
78.9
3252
66.6
3.1
69.7
3255
58.5
11.3
69.8
3259
67.7
8.4
76.1
Employee Benefits
Advertising
Other Expenses
Total Other Expenditures
0.8
0.4
9.9
11.1
2.5
0.8
11.5
14.8
2.6
0.4
23.8
26.8
2.2
1.6
14.6
18.4
1.5
2.2
14.4
18.1
Total Annual Cash Expenditure Est.
89.9
93.7
96.5
88.2
94.2
Operation Costs: In-state, out-of-industry
Other Expenditures: In-state, out-of-industry
30%
85%
30%
85%
30%
85%
30%
85%
30%
85%
19%
19%
20%
7%
34%
24%
9
14
4
1
5
Cost of Operations
Salaries and Wages
Cost of Goods Sold
Salaries to in-state, out-of-industry expenditures
Weighted Average Ratio for Cluster:
Number of Establishments in NC WV
Anderson Economic Group, LLC
IT Cluster Operating Costs / Operating Income (%) Data, by NAICS Segments
Cost of Operations
Salaries and Wages
Total Cost of Goods Sold
3341
65.3
16.2
81.5
3344
72.5
12
84.5
5112
19.1
40.5
59.6
5181
27.3
26.7
54
5415
32.4
29.1
61.5
Employee Benefits
Advertising
Other Expenses
Total Other Expenditures
2.3
2.2
21.1
25.6
2.1
0.7
14.8
17.6
3.3
5.2
31.8
40.3
2.4
4.8
39.7
46.9
2.5
0.9
30.3
33.7
107.1
102.1
99.9
100.9
95.2
15%
85%
15%
85%
15%
85%
15%
85%
15%
85%
51%
84%
46%
109%
61%
87%
3
2
4
6
66
Total Annual Cash Expenditure Est.
Operation Costs: In-state, out-of-industry
Other Expenditures: In-state, out-of-industry
Salaries to in-state, out-of-industry expenditures
Weighted Average Ratio for Cluster:
Number of Establishments in NC WV
Other Technology Cluster Operating Costs / Operating Income (%) Data, by NAICS
2111
48.3
5.6
53.9
3254
52.3
13.6
65.9
3391
48.8
16
64.8
4234
76.6
8.2
84.8
5413
40.8
20
60.8
5417
32.8
34.4
67.2
Employee Benefits
Advertising
Other Expenses
Total Other Expenditures
0.8
0
28.8
29.6
1.6
4
24.5
30.1
2.2
1.2
21
24.4
0.7
0.8
8
9.5
2.3
0.3
20.8
23.4
3.2
1
52.1
56.3
Total Annual Cash Expenditure Est.
83.5
96
89.2
94.3
84.2
123.5
Operation Costs: In-state, out-of-industry
Other Expenditures: In-state, out-of-industry
15%
85%
15%
85%
15%
85%
15%
85%
15%
85%
15%
85%
17%
55%
41%
57%
42%
77%
65%
70
3
9
34
138
20
Cost of Operations
Salaries and Wages
Cost of Goods Sold
Salaries to in-state, out-of-industry expenditures
Weighted Average Ratio for Cluster:
Number of Establishments in NC WV
Notes: Operating Costs / Operating Income (%) Data is from the 2006 Almanac of Business & Industrial Financial Rations, Leo Troy, PhD. Prentice Hall.
In-state, out of industry estimates made by Anderson Economic Group, LLC based on personal interviews with technology firms in the region.
Federal anchor technology cluster assumed to have same pattern as the other technology cluster.
Anderson Economic Group, LLC
Table E-3. Estimated Operating Expenditures by North-central West Virginia Technology Industry
Advanced Manufacturing Cluster
Employment
Average Annual Wage in Industry
Total Wages Paid (household earnings)
$
$
Wage to Operating Expense Ratio
In-state, Non-payroll Operating Expenditure Estimate
Chemical and Materials Cluster
Employment
Average Annual Wage in Industry
Total Wages Paid (household earnings)
30%
$
472,938,636
$
$
4,402
66,180
291,324,360
Wage to Operating Expense Ratio
In-state, Non-payroll Operating Expenditure Estimate
Information Technology Cluster
Employment
Average Annual Wage in Industry
Total Wages Paid (household earnings)
19%
$
$
$
Wage to Total Operating Expense Ratio
In-state, Non-payroll Operating Expenditure Estimate
Other Technology Cluster
Employment
Average Annual Wage in Industry
Total Wages Paid (household earnings)
Federal Anchor Technology Cluster
Employment
Average Annual Wage in Industry
Total Wages Paid (household earnings)
Technology Industry Total (non-payroll operating)
3,307
43,355
143,374,985
$
171,287,754
$
$
4,186
54,903
229,823,958
55%
$
414,700,811
$
$
3,271
47,654
155,876,234
Wage to Operating Expense Ratio*
In-state, Non-payroll Operating Expenditure Estimate
1,573,727,498
84%
Wage to Operating Expense Ratio
In-state, Non-payroll Operating Expenditure Estimate
2,874
49,285
141,645,090
55%
$
281,267,459
$
2,913,922,159
* Federal anchor ratio assumed to be equal to "other technology" ratio.
Anderson Economic Group, LLC
E-5
Appendix F: Bibliography
In arriving at a definition of the technology industry, we reviewed a number of
past reports with a range of definitions of the industry. A bibliography of these
reports is presented below.
Anderson, Patrick, Ian Clemens, and Christopher Cotton. Economic Diversification and High-Tech Employment in Oakland County. Anderson Economic Group, 2001.
Anderson, Patrick, and Scott Watkins. The Life Sciences Industry in Michigan:
Employment, Economic, and Fiscal Contributions to the State’s Economy.
Anderson Economic Group, 2004.
Anderson, Patrick, and Scott Watkins. Automation Alley’s First Annual Technology Industry Report: Driving Southeast Michigan Forward. Anderson
Economic Group, 2005.
Cyberstates 2005. American Electronics Association, 2005.
DeJonge, Alissa. Defining High Tech. CERC, 2001. http://www.cerc.com/
detpages/services951.html.
Feinstein, Abel, and Sean P. McAlinden. Michigan: The High-Technology Automotive State. Center for Automotive Research in the Altarum Institute,
2002.
Hecker, Daniel. “High-Technology Employment: A Broader View”. Monthly
Labor Review, June 1999.
High Technology and the Third Frontier. Ohio Department of Job and Family
Services, Bureau of Labor Market Information, October 2003.
Paytas, Jerry, and Dan Berglund. Technology Industries and Occupations for
NAICS Industry Data. Carnegie Mellon Heinz School Center for Economic Development in conjunction with the State Science & Technology
Institute, February 2004.
State of the Industry Report 2005: The Pittsburgh Region. Pittsburgh Technology Council, 2005.
The Dynamics of Technology-Based Economic Development: State Science
and Technology Indicators, 4th edition. U.S. Department of Commerce,
Office of Technology Policy, March 2004.
Anderson Economic Group, LLC
F-1
Appendix G: Project Team
This project was completed under the direction of Patrick L. Anderson, Principal and CEO of Anderson Economic Group. Scott D. Watkins, a consultant in
the firm’s public policy, fiscal, and economic analysis practice area, managed
the project and co-authored the report with Caroline Sallee, senior analyst. Also
contributing to this report were Alexander Rosaen and Lisa Asmus. Brief biographical information of the project team follows.
PATRICK L.
ANDERSON
Mr. Anderson, principal and CEO, founded the consulting firm of Anderson
Economic Group in 1996. Since founding the firm, he has successfully directed
projects for state governments, cities, counties, nonprofit organizations, and corporations in over half of the United States.
Prior to founding Anderson Economic Group, Mr. Anderson served as the chief
of staff of the Michigan Department of State, and as a deputy director of the
Michigan Department of Management and Budget, where he was involved in
the largest state privatization project in U.S. history and the landmark 1994
school finance reform constitutional amendment. Prior to his involvement in
state government, Mr. Anderson was an assistant vice president of Alexander
Hamilton Life Insurance, an economist for Manufacturers National Bank of
Detroit, and a graduate fellow with the Central Intelligence Agency.
Mr. Anderson has written over 100 articles published in periodicals such as The
Wall Street Journal, The Detroit News, The Detroit Free Press, Crain’s Detroit
Business. His book Business Economics and Finance was published by CRC
Press in August 2004, and his paper on “Pocketbook Issues and the Presidency”
was awarded the Edmund Mennis Award for best contributed paper in 2004 by
the National Association for Business Economics.
He is a graduate of the University of Michigan, where he earned a masters
degree in public policy and a bachelors degree in political science.
SCOTT D. WATKINS
Mr. Watkins is a consultant with Anderson Economic Group. He works on
projects involving policy analyses, economic impacts, and market assessments.
He is also the director of marketing and administration for the firm.
Among the clients for whom he has worked are the Michigan Chamber of Commerce, Michigan Retailers Association, Michigan State University, Wayne State
University, and Collier County, Florida. He was also the author of the 2005 and
2006 technology industry reports for Automation Alley, as well as a 2004 study
on the economic benefits of the Life Sciences industry in Michigan. Additionally, Mr. Watkins recently completed economic impact studies on the Superbowl, Ryder Cup, and Detroit Tiger’s playoff baseball games.
Anderson Economic Group, LLC
G-1
Prior to joining Anderson Economic Group, Mr. Watkins was an analyst in the
automotive market and planning group at J.D. Power and Associates, and a marketing assistant with Foster, Swift, Collins, and Smith P.C. Mr. Watkins is a
graduate of Michigan State University with a B.A. in marketing from Eli Broad
College of Business and a B.A. in international relations from Michigan State’s
James Madison College.
CAROLINE M. SALLEE
Ms. Sallee is a senior analyst at Anderson Economic Group, working in the public policy, economic, and fiscal analysis practice area. Her background is in
applied economics and public finance, and her recent work includes the benchmarking of Michigan’s business taxes with other states in a project for the Michigan House of Representatives. She has worked on previous technology industry
reports for Automation Alley.
Ms. Sallee holds a masters degree in public policy from the University of Michigan and a bachelor of arts degree in economics and history from Augustana
College in Rock Island, Illinois.
OTHER
CONTRIBUTORS
Alexander L. Rosaen. Mr. Rosaen is a senior analyst at Anderson Economic
Group, working in the economic and fiscal impact and policy and regulatory
analysis practice areas. Mr. Rosaen holds a masters in public policy from the
University of Michigan. He also has a masters of science and bachelors of science in mechanical engineering from the University of Michigan.
Lisa Asmus. Ms. Asmus is an office assistant with Anderson Economic Group.
She conducts economic and market research, collects and analyzes data, and
contributes written analysis for reports. She also performs office management
tasks, including accounts payable, inventory, and quality control. Ms. Asmus is
a graduate of the James Madison College at Michigan State University.
Anderson Economic Group, LLC
G-2