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Technology, innovation driving Tri-Cities metro area growth

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February 02, 2011 Share This!

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RICHLAND, Wash. — While much of the nation has undergone a severe recession, the Tri-Cities has continued to prosper, driven largely by a climate friendly to innovation, federal and private funding sources seeking science and technology solutions, and by a growing number of locally-based technology firms and entrepreneurs.

According to a study released today at the Tri-Cities Regional Economic Outlook forum in Kennewick, the Tri-Cities has been successful in founding and sustaining technology based companies, attracting and retaining educated and skilled technical workers, and stacks up well compared to many other metropolitan areas in the Northwest.  However, the study also notes there is a shortage of local equity capital to invest in starting and expanding high tech businesses in the area. 

The Tri-Cities Index of Innovation and Technology documents the significant impact technology based companies and workers are having on the Tri-Cities (Kennewick, Richland and Pasco) economy, and compares the region with other metro areas in Washington, Oregon and Idaho. 

The report was commissioned by Pacific Northwest National Laboratory's Economic Development Office, and serves as an update to similar reports done by the U.S. Department of Energy laboratory in 2001 and 2004. 

The 48-page report looks at five key indicators — innovation, competitiveness, growth, financial capacity and quality of life, and includes detailed assessments, charts and figures for more than a dozen sub-categories including employment, labor costs, taxes, start-up growth rates, patent generation, cost of living, crime rates and education levels of workers. 

The report's authors found a growing Tri-Cities metropolitan area that:

  • Is not a significant player in the software and internet industries that are typically associated with Washington state, but has been highly successful in founding and sustaining technology companies based on physics, chemical engineering, materials science, measurement equipment, information technology and services;
  • has considerable technical and entrepreneurial talent, which has led to a significant amount of high-tech industry business growth, federal research funding and employment in the last five years;
  • has not yet experienced many of the downsides of growth such as traffic congestion and high cost of living; and
  • has overcome one of the two factors that has impeded technology-based economic development — a need for greater local high-bandwidth connectivity — but continues to experience a shortage of local equity capital.

"The growth in the number of high-tech companies and employment in the Tri-Cities from 2006 to 2009 has far outpaced the rest of the state of Washington," said Gary Spanner, manager of PNNL's Economic Development Office.  "Evidence shows that the Tri-Cities is emerging from the historical boom-bust cyclic behavior that once characterized this community and which was based almost entirely on the ebb and flow of employment at the Hanford Site.

The report notes since the mid-1990s, the Tri-Cities economy has become increasingly independent of Hanford with area employment, total income, population and residential real estate sales and building permits increasing significantly despite level Hanford employment.  This trend was first illuminated in an earlier report by the authors. 

The report also acknowledges that a portion of the growth the Tri-Cities has experienced in the last two years can be attributed to stimulus funding received by Hanford contracts, but there also has been strong growth in the food processing industry, manufacturing and health care sectors it says.

Richard Fowler, one of the report's authors, says if there's a downside to the Tri-Cities high-tech sector it's the inability of the local market to bankroll new and innovative businesses.  "However, the area somewhat compensates for this weakness by being very assertive in seeking private investment dollars from regional 'angel' and venture capital investors, and from federal sources" Fowler says.

The Tri-Cities Index of Innovation and Technology report is available for viewing or downloading at

Other Tri-Cities and Washington state technology index reports — including those produced by PNNL, the Washington Technology Center and the Technology Alliance — can be found at:

Tags: Operations, Technology Transfer and Commercialization

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