Tech thrives in Texas

DallasNews.com | News for Dallas, Texas | Business

By CRAYTON HARRISON / The Dallas Morning News


Texas has remained a technology powerhouse in the last few years despite the industry's economic malaise, a trade group says in a report to be released today.

Notably, the state has kept a large tech workforce and attracted private investment without heavy government spending.

The aftershocks of the technology industry's 2001 collapse were still being felt in 2003, when Texas lost 32,900 high-tech jobs, according to AeA, formerly called the American Electronics Association.

That dip left the state with about 446,000 technology workers, second only to California's 915,500.

AeA compiled the Cyberstates report from government data and information from the venture capital industry.

Most of the data came from 2003, though some 2004 statistics were included.

Nationally, high-tech employment dipped by 25,300 jobs in 2004, compared with 333,000 jobs lost in 2003.

While layoffs in North Texas' telecommunications sector have left many highly trained workers still looking for jobs, other parts of the technology industry, such as software and semiconductors, have begun to recover.

"There are opportunities out there for well-trained, skilled technology professionals," said John Martin, president of Dallas-based staffing and consulting firm Impact Innovations Group.

"The glut of talent is more on the telecom side, not on the applications development side."

Texas ranked second in high-tech payroll and in total number of tech companies in 2003, the report said. Last year, Texas had nearly $35 billion in tech-related exports, it said.

But the state ranked 27th in state funding of research and development, spending $654 per capita compared with California's $1,600, AeA said.

The federal government and private investment carry much of the research load in Texas, the report said.

It ranked Texas fourth in total research spending, including federal government, academic and industry spending, using data from a 2004 National Science Board report.

Texas was third in venture capital investment, AeA said, citing data from the National Venture Capital Association.

Still, the state would benefit from taxpayer-funded investment in research, said Clare Emerson, executive director of AeA's Texas chapter. She noted that Maryland's venture capital funding increased after it ramped up public investments in research.

"If we invest a little more, the return might be huge," she said.

Gov. Rick Perry has asked the Legislature to create a $300 million fund to invest in the commercialization of university research. Several technology companies have endorsed that idea.

"If I had to pick one factor as the best leading indicator for economic success, it's investment in basic research," said Phil Ritter, senior vice president at Texas Instruments Inc.

Government funding can help as long as it focuses on education and pure scientific research, said Ronald Nash, a partner at venture capital firm Interwest Partners.

"If you get governments trying to place bets on new technologies, they'll do it about as efficiently as Russia used to do," he said.