AeA Report: Massachusetts Third in High-Tech R&D Expenditures; Continues to Rank Second in Venture Capital Investment.

WOBURN, Mass. -- A detailed examination of high tech trends across the country shows that Massachusetts technology companies invested $14.3 billion in future innovation and research and development in 2002, ranking it third in the nation. Further fueling technology's future in the Bay State was a $190 million increase in venture capital investment, which totaled $2.8 billion in 2004 and placed Massachusetts in second place in this critical measure. AeA released this information, along with other vital facts concerning the U.S. technology industry, in its new analytical report, Cyberstates 2005: A State-by-State Overview of the High-Technology Industry.

"This surge of funding and the practice of local tech companies continuing to put money back into R&D speaks well for the future of the industry and demonstrates a certain level of optimism," said Anne Doherty Johnson, AeA New England Council executive director. "Since Massachusetts has the third highest concentration of tech workers nationwide, the Commonwealth and its economy was hit particularly hard by the recent technology downturn, so this is welcome news," she said. "And, while Massachusetts remains an attractive location for technology companies, we need to do more to make the Commonwealth more business friendly."

Some 86 out of every thousand Bay State private sector workers are employed in high tech, a higher concentration than California. High-tech industry employment in Massachusetts totaled 235,600 in 2003, the most recent year state data are available. After losing some 18,500 jobs in 2003, Massachusetts fell to 6th place in total tech employment, displaced by Virginia. High-tech workers in Massachusetts are paid the third highest average private sector wage in the nation. The average high-tech wage in the state was $81,000 in 2003, 74 percent more than the average private sector wage.

The report also noted that Massachusetts technology exports grew for the second year in a row, totaling $9.2 billion in 2004, and putting Massachusetts in the 4th spot nationally. High tech exports accounted for 42% of the state's total exports. "It's increasingly clear that Bay State companies are global players and need to seek out opportunities for growth in international markets," she continued.

Nationally, Cyberstates 2005 shows that the high-tech industry is slowly turning the corner. High-tech employment was down by only 25,000 jobs out of 5.6 million workers in 2004. U.S. high-tech exports were up by 12 percent for a total of $191 billion in 2004. And, technology related venture capital investments were up for the first time in four years.

This eighth annual edition of Cyberstates provides a comprehensive review of the high-tech industry nationally and state-by-state by high-tech employment, wages, payroll, establishments, trade and such critical technology drivers as venture capital investments and R&D expenditures.

AeA members can purchase the report for $95; non-members for $190. Visit www.aeanet.org to download the report, or call 800-284-4232 or 408-987-4200.

AeA is the nation's largest high-tech trade association. Founded in 1943, AeA utilizes an extensive international network of offices to serve its members through advocacy, training, research, and business services. www.aeanet.org

What Does High Tech Mean for Massachusetts?

--235,600 high-tech workers (6th ranked cyberstate)

--18,500 jobs lost between 2002 and 2003

--High-tech firms employed 86 of every 1,000 private sector workers in 2003, ranked 3rd nationwide

--High-tech workers earned an average wage of $81,000 (3rd ranked), or 74% more than Massachusetts' average private sector wage

--A high-tech payroll of $19 billion in 2003, ranked 4th nationwide

--11,800 high-tech establishments in 2003, ranked 9th nationwide

--High-tech exports totaled $9.2 billion in 2004, ranked 4th nationwide

--High-tech exports represented 42% of Massachusetts' exports (8th ranked)

--Venture capital investments of $2.8 billion in 2004, ranked 2nd

--Venture capital investments increased by $190 million in 2004

--R&D expenditures of $14.3 billion in 2002, ranked 3rd nationwide

Massachusetts' National Industry Segment Rankings:

--2nd in measuring and control instruments manufacturing employment with 17,900 jobs

--3rd in software publishers employment with 19,600 jobs

--4th in computer and peripheral equipment manufacturing employment with 16,300 jobs

--4th in R&D and testing labs employment with 36,900 jobs

Source: Cyberstates 2005

Data are for 2003 unless otherwise noted.

2003 data are the most current for state employment, wages, payroll, establishments, and industry segment jobs.

Published by AeA, Advancing the Business of Technology (www.aeanet.org)