KENNEWICK — What makes an economy good or bad? And who determines those factors?
According to economist Paul Turek with the Washington state Employment Security Department, the answer is subjective. Individuals, even individual economists, will disagree on the most important factors.
That said, there are a few conventional factors that are generally agreed upon as contributors to the overall quality of an economy.
In a recent study, personal finance site WalletHub analyzed each state and D.C. across 28 factors to determine which state has the best economy. Turek told McClatchy that their factors are fairly conventional for the topic, with a bit of an emphasis on big business.
So, how did Washington stack up?
Comparing economies
Each of the 28 factors was given a specific weight and assigned one of three categories: economic activity, economic health and innovation potential. A perfect score would be 100 points — Washington scored a 71.10, taking first place.
“When I see this from WalletHub, the first thing that comes to me is that this is not surprising at all,” Turek said in an interview.
He said WalletHub has done similar studies before, as have other organizations. After examining the methodology, the economist said Washington will often come out on top when evaluated by those factors.
Washington in first place is followed by:
- Utah — 62
- Massachusetts — 61.52
- Texas — 60.08
- California — 59.63
- Colorado — 58.89
- Florida — 55.75
- North Carolina — 55.08
- D.C. — 54.15
- Arizona — 53.69
The Evergreen State ranked No. 1 within the economic activity category, second in the innovation potential category, and 15 in the economic health category.
The best individual factors for Washington are:
- Percent of jobs in high-tech industries — Second
- Share of STEM professionals — Second
- Independent inventor patents (per 1,000 working age population) — Third
- Percentage of firms on the Technology Fast 500 list — Fourth
- Average educational attainment of recent immigrants — Fifth
Tech presence vital
What puts Washington at the top? The technology industry presence near the Seattle area is a huge factor, according to Turek. He told McClatchy this industry and its innovation have started to separate Washington from other states, while also transforming the state’s overall economy.
“Our tech centers are at the leading edge of technology,” Turek said.
A booming technology industry can make all the difference in this kind of study, using these common defining factors, according to Turek. Many of the top states have tech hubs in at least one city.
He says this is connected to the natural economic development that comes with the technology industry. Tech companies attract attention from all over the world, creating a magnet effect that draws in other companies. The cycle of growth continues as more tech companies move to one place, as they help each other and the community grow.
Since the industry is generally well-paying, this also draws in other companies, including food, retail and services. As the cycle continues, more money is spent in the community. Turek says that while nothing is permanent, the tech center in King County is a driving force in the state’s economy, and there’s no reason to believe that will change in the near future.
Washington also has a good culture of business friendliness. Businesses are helping each other, supporting others within and outside of their industry. They also give back to the community and support local education. In turn, community members accept workers in big industries, and community policy supports the businesses.
“All of these things have to continue to stay in place to make the community a safe place for the company to operate out of,” Turek said. “If these get out of balance, companies start leaving. We’ve got it in place and it looks pretty good.”
