This economic indicator category measures labor force characteristics, startup firms, and employment and population statistics. A positive finding is that Portland-metro is significantly outpacing its comparator regions in the growth of the share of population with an associate degree or higher. However, Portland’s performance is middle of the road relative to comparator regions as it relates to: High-skilled foreign-born share of the population, workers in science, technology, engineering and math (STEM) occupations, and share of the population age 25 years and older with an associate degree or higher. Though Portland-metro is third highest in growth of 25- to 34-year-olds overall, its employment growth only tops Indianapolis, and its employment to population ratio is lower than all comparator regions. Venture capital per capita in Portland-metro is fifth lowest, which, along with Nashville and Indianapolis, significantly trails Salt Lake City, Austin and Seattle. Additionally, in the share of jobs at young firms, Portland ranks No. 4, with fewer jobs than in Austin, Salt Lake City or Nashville.
LABOR FORCE CHARACTERISTICS
Portland-metro sits in the middle of the pack on most labor force characteristics, behind Seattle and Austin. Of Portland’s workforce, 14.6 percent are in STEM occupations, compared to Austin’s 16.3 percent and Seattle’s 17 percent. Portland-metro also trails Seattle and Austin in terms of the share of high-skilled immigrants per capita, sitting at just 3.6 percent. See Figure 19 and 20. Recently, however, Portland-metro has seen significant growth in working-age education levels, surpassing all other comparator regions with a 7 percent increase in the share of the population age 25 years or older with post-secondary degrees, trailed by Salt Lake City, Seattle and Austin, which stand at 5 percent growth. See Figure 21 and 22. Continuing to invest in education is critical for a skilled, productive labor force to promote economic vitality.
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STARTUPS
Portland-metro boasts an entrepreneurial reputation and has examples of innovative firms achieving notable success, but it falls short in attracting venture capital funding and growing start-up companies into major sources of jobs relative to comparator regions. The value of Portland-metro venture capital deals per capita sits at $123 million for 2016, compared to Salt Lake City’s $533 million. See Figure 23. Only Seattle and Indianapolis trail the Portland region in terms of the share of jobs at “young” companies (five years old or younger). In Portland, only 10.9 percent of jobs are at such businesses, compared to Austin’s 15.3 percent. See Figure 24.
Based on ECONorthwest’s research, there are a few explanations for Portland’s poor showing in venture capital funding: 1) Many of Portland’s bigger startups sold in the last few years and there have not been as many in its place; 2) Portland’s otherwise entrepreneurial individuals may be sticking with bigger firms – since the recession, these bigger tech businesses have been hiring people up again – one big driver of innovation and entrepreneurial activity is a recession, 3) the venture capital investment generally has been cooling down throughout the U.S. In addition, there is some volatility in venture capital deal reporting, since the overall venture capital investment outside of major tech hubs is low and the timing of a deal can make a difference in how a metro looks. Venture capital is critical to growing startup companies and entrepreneurial activity. This funding tends to be lower outside major tech hubs and is also driven by the maturity of startups and their readiness for venture capital.
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EMPLOYMENT & POPULATION
Portland-metro ranks No. 3 among comparator regions in population growth for 25- to 34-year-olds, which had typically been a strong growth area. See Figure 25, 26 and 27. More concerning, Portland-metro falls behind most comparator regions in employment growth and employment rates, and has a slightly lower labor force participation rate across most age groups. See Figure 28 and 29. The below average employment to population ratio, at 47 percent, suggests that lower rates of labor force participation is a key driver. See Figure 30.
(Hover over data points and click tabs for more information. Slide to view more charts.)