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Oregon’s High-Technology Sector
April 2016
Oregon Office of Economic Analysis
2Oregon Office of Economic Analysis
Overview
• Big Picture Trends• Historical look at the high-tech industry in Oregon
• Hardware vs Software• Oregon’s legacy in hardware manufacturing vs the
strong software growth in recent years
• The Great Recession• Comparing industry trends over the business cycle
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Big Picture Trends
4Oregon Office of Economic Analysis
Firms are technically business units. One firm may have more than one business unit in the state.Corporate taxes are for C Corporations only. S Corps, partnerships and the like are not included in this calculation.
5Oregon Office of Economic Analysis
High-Tech jobsstatewide nowat highest levelsince thedotcom bust
Accounts for~5% of all jobsin Oregon
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In 1970s, High-Tech wages paid10% more thanthe statewideaverage wage
In 2015, High-Tech wages aremore than twicethe statewideaverage (215%)
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Oregon’s stateGDP growthdriven in largepart to high-techproductivity.
In 2013, techcontributed $44.7 billion tostate GDP - 22% of total
Very hard for BEA to measure well given Moore’s Law &improvedperformance ineach generationof chips.
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9Oregon Office of Economic Analysis
Oregon’s high-tech sector today is equivalent in size to the forest sector (timber)in the 1970s in terms of employment, impact of wages and the like. However onebig difference is the geographic concentration of the employment.
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Share of Employment in High Technology, 2012
U.S. 4.6%
Significantly Above Average (>6%)
Above Average (4.6% - 6%)
Below Average (3.5% - 4.6%)
Significantly Below Average (<3.5%)
Based on industry employment data
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Based on occupational employment data
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Hardware vs Software
13Oregon Office of Economic Analysis
Defining Hardware and SoftwareNAICS Industry Hardware/Software
3254 Pharmaceutical & medicine manufacturing Hardware
3341 Computer & peripheral equipment manufacturing Hardware
3342 Communications equipment manufacturing Hardware
3344 Semiconductor & electronic component manufacturing Hardware
3345 Electronic instrument manufacturing Hardware
3364 Aerospace product & parts manufacturing Hardware
5112 Software publishers Software
5161 Internet publishing & broadcasting Software
5179 Other telecommunications Software
5181 Internet service providers & Web search portals Software
5182 Data processing, hosting & related services Hardware
5413 Architectural, engineering & related services Software
5415 Computer systems design & related services Software
5417 Scientific research-and-development services Software
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Hardware hasnot been anemployment growth sectorsince thetechnology bustin the early2000s.
All of the growthin the pastdecade is insoftware.
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Hardware and Intel
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The rest of theindustry sawlarge job lossesin recentdecades – both locally andnationally.
The fact Oregonremained thehub of R&D andproduction hasserved the economy verywell.
To reiterate, the Intel employment figures come from The Oregonian not from any official tax or employment records.
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Expectationsfor the industrywere no jobgrowth in thecoming decade.
However, stableemployment was expected. That Oregon would maintainthe number ofhigh-wage,very productivejobs.
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Software and Outposts
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Vast majorityof high-tech jobgrowth in recentyears is insoftware.
The largest gains are inMultnomahCounty.
Many of thesenew businessesare outposts forfirms withheadquarterselsewhere.
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24Oregon Office of Economic Analysis
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The Great Recession
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High-tech in Oregon sawlarger job lossesthan the typicalindustry.
Recovery has been slightlystronger, effectively matching trendsin the state’seconomy.
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With a largerhardware sectorOregon’s techlosses werelarger than thenation‘s.
Growth sincethe GreatRecession haseffectively matched national trends.
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Oregon’s hardwarehasoutperformed the nation.
Software hasseen slightly few net jobgains.
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Summary
• High-Tech is a very productive, high-wage sector
• Integral part of the Oregon economy
• Oregon’s legacy and strength is in hardware manufacturing• Oregon still outperforms here, but hardware is not an
employment growth sector
• Growth is all software• Increasingly located in the Portland MSA, particularly
Multnomah County and the City of Portland
31Oregon Office of Economic Analysis
Contact
www.OregonEconomicAnalysis.com
@OR_EconAnalysis
(503) 378-4052
