Oregon is helping forge ‘new economy,’ report says
Published: November 19. 2008 4:00AM PST
Information technology, innovation, entrepreneurship and a highly educated work force are key to establishing the “new economy” of the future, and Oregon is among the top 15 states positioned to lead the way, said two think tanks in a joint report issued Tuesday.
According to “The 2008 State New Economy Index,” released by the Kansas City, Mo.-based Ewing Marion Kauffman Foundation and the Washington, D.C.-based Information Technology and Innovation Foundation, Oregon ranked 15th in terms of making a transition to such an economy, up two spots from its 2007 score but down from its 2002 ranking of 13th.
The report listed the top five states as Massachusetts, Washington, Maryland, Delaware and New Jersey. At the bottom was Mississippi. Oregon’s neighbor to the south, California, ranked eighth.
Rob Atkinson, president of the Information and Innovation Technology Foundation, thinks Oregon could do better.
“My sense is that Oregon has slacked off somewhat on becoming a knowledge-based state,” said Atkinson. “You hear about certain states making investments, but you don’t hear that from Oregon … what I know of Oregon, (it) seems like it could easily be in the top 10.”
John Morgan, CEO of HemCon Medical Technologies in Tigard and an Oregon Innovation Council board member, said Oregon will be in the top 10 in the not-too-distant future as a number of state-funded initiatives — such as the Oregon Nanoscience and Microtechnologies Institute and the state’s push for wave energy research — reach fruition.
“The actions taken in the last few years are not fully represented in that report and I think we will continue to elevate Oregon on a national and international level,” said Morgan. “(They) are really driving Oregon toward the next phase of its economic growth and providing opportunities in-state for development of next-generation businesses and industries that will allow us to create the economy in the report.”
Tech innovation
A “new economy” is based on technological innovation, said Atkinson. As globalism extends its reach, he said, commodity-based and some service-based economies can no longer compete with cheaper providers overseas. That creates a need to capitalize on innovation, which relies on investments in education and a healthy entrepreneurial environment, Atkinson said.
“The new (economy) is more dynamic, entrepreneurial, global, technology-driven and knowledge-based, so when you look at all the big structural changes in the U.S. economy in the last 15 years, we’ve seen all these changes happen,” Atkinson said. “For states, the success factor has changed.”
The report uses 29 indicators to rank each state on the extent to which its economy is structured and operates to effectively compete nationally and globally, and divides the indicators into five categories that best capture what is new about the “new economy”: knowledge jobs, globalization, economic dynamism, transformation to a digital economy, and technological innovation capacity, said the report’s accompanying news release.
Among the indicators, the highest Oregon ranked was second, for online agriculture. According to the report, the Internet can transform some aspects of agriculture, including the buying and selling of seed and crops and the ability of farmers and ranchers to have instant access to weather forecasts.
The state’s lowest ranking was for technology in schools and direct foreign investment, for which the state was ranked 42nd in both categories.
A bright spot, however, was the state’s rank of sixth for entrepreneurial activity. According to the report, the speed in today’s world at which technology is innovated and marketed to consumers demands entrepreneurs willing to establish or fund companies that can produce those technologies, thereby creating jobs. From 1980 to 2001, net U.S. job growth was from firms less than five years old, the report said.
Roger Lee, executive director of Economic Development for Central Oregon, said there aren’t Fortune 500 companies in Bend, which forces people who want to live here to innovate. That same quality of life, though, attracts other talented people who will perhaps end up working together on some entrepreneurial venture.
“We have a ways to go in terms of support from higher education but it’s still emerging,” Lee said of the local “new economy.”
Growing knowledge
Another bright spot was the state’s rank of 10th for the number of U.S. knowledge workers migrating to Oregon. Atkinson said quality-of-life issues tend to make the coastal states more attractive and that helps in recruiting and retaining businesses and workers.
“Intel has a factory in Hillsboro not because Oregon is low cost — for that, they could go to Mississippi, so it’s obviously more than that, and if they can grow talented engineers, they’re happy to live there,” Atkinson said.
Harvey Mathews, president of the Software Association of Oregon, said he spends a good amount of his time working to recruit “talented” individuals and companies to Oregon, with the hopes of growing Oregon’s technology sector.
To his mind, two things government can do to make his task easier are create fewer regulatory barriers for startup companies and an eduction system that supports students from kindergarten to graduate school in knowledge-based education fields.
“It’s so much more efficient to grow our own, rather than churning out graduates who leave, or who aren’t graduating with skills necessary to fill local technology jobs,” said Mathews. “We have many, many open positions that are going unfilled by Oregonians in the software space.”
Morgan said education is the key to an innovation-oriented economy and that the state must continue supporting secondary and higher education to both spur innovation and create places for students to work after they graduate.
“That’s really what we’re trying to create,” Morgan said. “It’s a synergistic effect between educational infrastructure and developing a new innovation economy.”
Andrew Moore can be reached at 541-617-7820 or amoore@bendbulletin.com.
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