Tech firms see brighter outlook

Published 9:00 pm Sunday, December 21, 2003

Debra Griffith, president and chief executive officer at Bothell’s Teltone Corp., said something has shifted in the past few months, resulting in increased orders for her telecommunications software and hardware company.

“I have to say, as we end the year, the activity has certainly picked up,” Griffith said. “We’re quite hopeful about the new year, especially as clients are saying they’ll have spending budgets again.”

At Luminous Corp., a marketing and advertising firm in downtown Everett that specializes in Web site work, co-owner Joel DuChesne strikes a similar note.

“The first part of the year was pretty slow, just like everybody else. But it’s really picked up in the last quarter,” DuChesne said, adding that he’s also optimistic heading into 2004.

High-tech and tech-related companies, having survived the roller-coaster ride of the dot-com boom-and-bust eras, aren’t gushing about how they did this year, but most are feeling better than they were a year ago.

“The companies themselves are telling us that orders are picking up, and the stock prices for public companies are up, too,” said Kathy Wilcox, president and CEO of the WSA, the state’s largest tech association.

At the start of 2003, some industry experts predicted high-tech businesses would come roaring back this year, while others warned it would be another slow year. Those who were pessimistic a year ago seem to have been more accurate in their predictions.

But there still were some hopeful signs locally.

For example, the tech sector saw positive gains in employment throughout the year. Wilcox said high-tech companies hired about 700 people statewide during the first half of the year. Every other sector in Washington lost jobs during that same period, according to state data. In the second half of the year, tech-related hiring has sped up even more.

The momentum is striking when compared to the state’s aerospace sector. Thanks in large part to layoffs by the Boeing Co., more people in the state worked in one of four high-tech industries than in aerospace manufacturing as 2003 began, the Associated Press reported. That’s the first time that’s ever happened, and it comes despite heavy tech layoffs in 2001 and 2002.

“It’s a pretty interesting milestone, especially when there’s such angst over the future of Boeing,” Wilcox said.

The state Employment Security Department listed 68,948 people in the high-tech industries last January – 380 more than those in aerospace. By March, the latest month for which figures are available, the gap had widened to 1,245.

The four high-tech industries counted were software publishing, Internet publishing and broadcasting, telecommunications and Internet-related businesses. Those industries generated $56 billion last year, Wilcox said.

At the same time, venture capitalists have reported they are funding more start-ups this year. Washington state continues to rank first among all states in the number of tech start-up firms formed each year, according to the Public Policy Institute.

“That bodes well, as that has sustained us through the soft years,” Wilcox said. “We still have people who are risk-takers, and that entrepreneurial climate.”

Looking forward to the coming year, Wilcox said she thinks the tech businesses that did well this year will continue to be strong contributors, including wireless companies, gaming and entertainment firms, and the region’s online giants Amazon.com, Expedia and RealNetworks.

Software and hardware companies also have reason to be hopeful. According to CIO magazine’s recent tech poll, chief information officers responding to the survey said they plan to increase tech spending by 4.2 percent over the next year.

As the WSA turns 20 years old in 2004, Wilcox said it’s amazing to see the growth of high-tech companies in the Puget Sound area over that time. That’s been the case in Snohomish County, where economic development officials have seen technology and biotechnology firms as good areas for diversifying the local economy.

“There’s a lot of strength to build on; it’s not going away,” Wilcox said.

Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.