Business

Tri-Cities use PNNL report as recruiting tool

RICHLAND -- The Tri-Cities ranks better than anyplace else in Washington except Seattle in some key areas used to measure its attractiveness to technology-based companies and skilled technical workers.

But then it trumps the Seattle area for some of the factors that add to quality of life, such as a low cost of living, a low crime rate and sunny skies.

That's according to Pacific Northwest National Laboratory's new Tri-Cities Index of Innovation and Technology.

The just-released report is the first it has compiled since one was released in 2004.

The report, paid for by the Department of Energy, is a recruiting tool for the DOE lab in Richland, helping show world-renowned scientists that the Tri-Cities is a viable place to build a career, said Gary Spanner, manager of the lab's economic development office.

It also is a tool to help recruit high-tech businesses to the Tri-Cities as the community continues to work to diversify its economy, he said.

The report looked at innovation, competitiveness, growth, financial capacity and quality of life.

Innovation

A technology economy rather than a resource-based economy survives on its ability to innovate, or produce new products and services based on new ideas, the report said. That makes education, new patents and the number of technical workers possible ways to measure innovation.

High-tech occupations make up about 9 percent of the employment in Benton and Franklin counties, which is above the state average. In Pierce and Spokane counties, in contrast, high-tech occupations make up 4 percent of total employment.

However, in Seattle and King County more than 11 percent of employment is in high tech, thanks to its leadership in the software and internet industries. Tri-City technical strengths are in areas that include physics, chemical engineering and engineering services.

A larger percentage of workers in the Tri-City area have graduate or professional degrees than other counties in the state, with the exception of King County, the report found. Benton and Franklin counties also have more working scientists and engineers per capita than any county in the state except for King County.

In 2009, there were 32 scientists or engineers for every 1,000 people employed in Benton and Franklin counties, which is nearly 80 percent more than that of Washington State. If computer software engineers are excluded, Benton and Franklin counties have the greatest number of engineers per capita in the state, it found.

The Seattle area easily beats the Tri-Cities on the number of patents granted. In 2009 Microsoft was granted 3,151 patents, which were more than half those granted in the state.

However, Benton County easily outpaced the other metropolitan counties in the Northwest. From 2004-09, Benton County averaged more than 37 patents per 100,000 people. Pacific Northwest National Laboratory was granted 307 of the 356 patents in those years, which helped provide much of the intellectual "seed corn" for the growth of new firms, the report said.

But Infinia Corp., Isoray Medical, Cadwell, Conagra Foods Lamb Weston and Vista Engineering Technologies each received at least five patents during those years.

Competitiveness

The Tri-Cities has become more competitive since the recent installation of a modern broadband infrastructure.

However, taxes are a factor in doing business in Washington with the portion of state and local taxes paid by Washington businesses the 15th highest in the nation and the overall state burden per capita the 19th highest in the nation.

The property tax rate for Benton County also was among the highest in the state, including in King County. However, when the wages paid in the Tri-Cities were considered, the rates look more competitive because of its high ratio of income to property value. Property taxes paid in Benton County are about 2.5 percent of median income compared to more than 4 percent in King County.

Average wages for all occupations in the Tri-Cities are below the state average of $48,329 at $46,619 a year.

But the wages for some technical occupations are the highest in the state.

For instance, the mean wage for environmental scientists and specialists in the Tri-Cities is $88,827 a year compared to $70,245 a year in the Seattle area.

Growth

In recent years, nonfarm employment in the Tri-Cities has grown much faster than the rest of the state. Looking back a decade, employment has grown nearly 3 percent annually, compared with 0.5 percent in the state.

Perhaps more importantly, the Tri-Cities seems less tied to the boom-and-bust cycles of the Hanford nuclear reservation.

Tri-City growth over the last 15 years in employment, total income, population, home sales and building permits has increased significantly despite little change in Hanford employment levels other than recent economic stimulus funding, the report found.

"The growth is a sign of increased maturity and depth of the local economy," the report said.

Financial capacity

Local financial capacity to bankroll new and innovative businesses is a significant weakness for the Tri-Cities, the report found. When a local company can attract local capital, it has a much greater chance of remaining in the community, it said.

Quality of life

The Tri-Cities easily beats Seattle in its low cost of living and low crime rate, the report found.

Grocery, housing and health care all cost less in the Tri-Cities.

And Richland has less than half the property and violent crime per number of people than Seattle.

It also is difficult to beat the Tri-City climate in Washington state with its low rainfall and mild winters, the report said.

To read the full report, go to www.pnl.gov.

* Annette Cary: 509-582-1533; acary@tricityherald.com.

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