This document summarizes Orange County's high technology sector, particularly the modeling, simulation, and training (MS&T) industry. It finds that Orange County has strengths in several high-tech industries like commercial machinery and data processing. The MS&T industry is a major part of the local economy but hard to define using standard industry codes. Most MS&T companies cluster near the University of Central Florida and support national security. The document concludes technological innovation will be important for the local economy and bioscience may also play a larger role.

1. Issue 3
The High Technology Sector in Orange County
by Luis Nieves-Ruiz, AICP
Introduction
High technology has become the latest “buzz word” for local economic development officials and
communities across the United States. Local governments are increasing their investment to attract
“innovation” industries to replicate the success of California’s Silicon Valley and North Carolina’s
Research Triangle areas. These areas are considered hot spots for technological innovation at the
national level. High Tech industries bring high-wage positions and can lead to economic
diversification and economic resiliency. The emerging biotechnology clusters in Jupiter and Port.
St. Lucie are two good examples of Florida’s efforts to become a new powerhouse in the innovation
economy.
Similar efforts have also sprung up in the Central Florida area. In 2005, Orange County outlined a
vision of a “high tech/high value” corridor in east Orange County stretching from the University of
Central Florida to the Orlando International Airport. Soon thereafter, both Osceola and Seminole
Counties announced their own respective plans to develop similar areas to stimulate the creation of
high technology parks and attract clean industries. While these are great efforts, few of the plans
actually define what is considered a “high tech” industry. Moreover, there have been very few
studies that profile the characteristics of the local high technology sector. This third article of the
Economic Research initiative defines high technology industry and discusses Orange County’s high
technology economy.
What is “high tech”?
Our search did not find an actual definition of high technology industries. The AeA (formerly known
as the American Electronics Association) defines high technology industries as those that fall within
three broad categories: high-tech manufacturing, communications services, and software and
computer services. However, it does not include other cutting edge industries, such as
biotechnology, engineering services, and research and testing industries. Another important
research institute, the Milken Institute, also does not have a definition per se, but it lists nineteen
high tech industry categories organized by NAICS code. These sectors are depicted in Exhibit 1.
The Milken Institute recently published North America’s High Tech Economy: The Geography of
Knowledge Based Industries, which ranked all of North America’s metropolitan regions according to
their performance as clusters of technological activity using the aforementioned sectors. The
Orlando-Kissimmee Metropolitan Statistical Area (MSA) was ranked 43rd among the top fifty high
tech areas, up from 46th in 2003. The MSA had a total of 63,600 high tech jobs in 2007. The
highest ranked industry was the Commercial and Service Industry Machinery (NAICS 3333),
ranked number 7 in North America. Establishments within this industry specialize in manufacturing
optical equipment.
To determine the role of Orange County in the regional high tech economy, staff assessed the
location quotients for all the high tech sectors studied by the Milken Institute. Exhibit 2 shows the
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2. high tech industries with the highest location quotients. To complement this information, staff also
researched the number of establishments within these categories using the InfoUSA business
database.
Exhibit 1: Milken Institute's High Technology Sectors
NAICS Industry Description
Code
3524 Pharmaceutical and Medicine Manufacturing
3333 Commercial and Service Industry Machinery
3341 Computer and Peripheral Equipment Manufacturing
3342 Communications Equipment Manufacturing
3343 Audio and Video Equipment Manufacturing
3344 Semiconductor and Other Electronic Manufacturing
3345 Navigational, Measuring, Electromedical, and Control Instruments
3346 Manufacturing and Reproducing Magnetic and Optical Media
3364 Aerospace products and Parts
3391 Medical Equipment and Supplies
5112 Software Publishers
5121 Motion Picture and Video Industries .
517 Telecommunications
518 Data Processing, Hosting, and Related Services
5191 Other information Services
5413 Architectural, Engineering, and Related Services
5415 Computer Systems Design and Related Services
5417 Scientific Research and Development Services
6215 Medical and Diagnostic Labs
Source: Milken Institute
Besides Commercial and Service Industry Machinery, other high tech industries with high location
quotients were Data Processing, Hosting, and Related Services, which provides infrastructure for
web hosting and streaming; Architectural, Engineering, and Related Services, which includes the
planning and design of buildings and testing laboratories that are engaged in performing physical,
chemical, and other analytical testing services; and, Telecommunications, which are primarily
engaged in operating or providing access to facilities for the transmission of voice, data, text, sound,
and video. Finally, Scientific Research and Development Services establishments conduct research
and experimental development in the physical, engineering, and life sciences.
Exhibit 2: High Technology Sectors with Highest Location Quotients in Orange County
Industry Orange Establishments Number of
County LQ Employees
3333 Commercial and Service Industry Machinery 5.02 9 2,920
518 Data Processing, Hosting, and Related Svcs. 1.49 99 2,133
5413 Architectural, Engineering, and Related Svcs. 1.45 606 11,647
517 Telecommunications 1.21 258 6,771
5417 Scientific Research and Development Svcs. 1.14 95 3,890
Sources: BLS Location Quotient Calculator, InfoUSA 2009
While NAICS codes are widely used to study local economies, they are less effective when used to
study some high tech industries. These are industries that are hard to define, because they use a
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3. variety of new technologies and encompass several fields. Thus, they would not be directly counted in a
ranking system like Milken’s. The best example is the Modeling, Simulation, and Training Sector
(MS&T), which is one of Orange County’s largest technology industries. There is no traditional NAICS
classification for the MS&T sector because most of the companies within this industry perform tasks and
create technologies that defy traditional industry codes. This makes it extremely difficult for researchers
to quantify the impact that this industry has at the national and local level. However, these companies
are technology-intensive and rely on state-of-the art information and interaction software. Therefore,
they are an important high technology industry.
What is Modeling, Simulation, and Training?
A simulation is typically the implementation of developed models that are used in a variety of
applications, such as military and flight training, entertainment, test and evaluation, education, analysis,
digital media, and product design (Hagen, Martin & Caswell, 2002). Orange County’s industry started in
the 1960s, when the Navy transformed a former Air Force base into a training facility and started to use
early versions of simulator technologies. The opening of UCF in 1968, then known as Florida
Technological University, and the first moon landing helped to establish the area’s simulation industry.
In 1980, UCF officials offered the Navy 40 acres next to the campus to establish what is now known as
Central Florida Research Park.
The rush in homeland security investment after the 9/11 attacks created a boost for the research park
and its simulation companies. In 2002, a total of 102 MS&T companies created approximately 5,591
jobs in the Orlando MSA (Hagen, Martin & Caswell, 2002). Team Orlando, the Army’s office of
simulation and training in Orlando, awarded $17.5 billion in contracts earlier this year, most of which
went to simulation and training firms in Central Florida Research Park.
Exhibit 3: Orange County’s MS&T Companies by NAICS Code
6% 541 Prof., Scientific & Tech.Svcs
8%
443 Electronic & Appliance Stores
8%
34% 999 Unclassified Establishments
11% Other Classifications
14% 611 Educational Services
19%
928 National Security
334 Comp. & Electronic Prod. Manuf.
Sources: InfoUSA 2009 and Orlando Business Journal’s 2009 Book of Lists.
Using the InfoUSA establishment data (2009), staff found more than 130 MS&T companies in Orange
County. Less than half of these companies are within the “high tech” sectors defined by the Milken
Institute. Exhibit 3 shows the industry sectors that comprise the local MS&T sector. The majority of
these companies (45) are within the Professional, Scientific, and Technical Services category. MS&T
companies within this subsector are classified within diverse industries, such as engineering services,
custom computer services, human resource consulting, process and logistics. A second group was
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4. classified as Electronic and Appliance Stores. The rest of the companies belonged to an array of
industries, including manufacturing, educational services, performing art related companies, and
national security companies. Fourteen percent of the companies were unclassified.
The lack of a specific NAICS code for MS&T companies made this search very time consuming.
Therefore, staff decided to search for clusters or concentrations of these companies. Clustering
makes it easier for high technology companies to share resources and new technologies.
Exhibit 4: MS&T Clusters in Orange County
Source: InfoUSA 2009, 2009 Book of Lists
As noted in Exhibit 4, there are four MS&T clusters in Orange County. These four clusters account for
85 percent of all companies and 44 percent of all the MS&T workers in Orange County. The first and
largest cluster, the Alafaya-Rouse Road cluster, has 85 companies near UCF, including the Central
Florida Research Park on the south west part and north of University Boulevard. All of these companies
are associated with national security efforts. The Aloma-University corridor contains twelve companies
and is probably an outgrowth of the previous cluster, as most of these companies are also associated
with national security issues. There are also two smaller clusters. One is located within the City of
Orlando, and it includes several Department of Defense offices that likely support the simulation
companies. A smaller cluster is south of West Sand Lake Road. While it includes some national security
companies, it also has two entertainment companies.
ECONOMIC OUTLOOK SEPTEMBER 2009

5. Conclusions
Technological innovation is expected to become the future driver of economic development, as it brings
higher-wage jobs and economic diversity to our community. Other jurisdictions across the United
States will continue to compete fiercely to attract these jobs, but Orange County shows strength in a
variety of high tech sectors, including Commercial industry and machinery, Data Processing and
Hosting, and Telecommunications. Based on our analysis, the County also has a high number of
establishments dedicated to Modeling and Simulation Training (MS&T). This field is very hard to
define, as it encompasses engineering, training, education, and a variety of disciplines. This could very
well affect the County’s position in economic rankings such as the Milken Institute’s high tech index.
The recent arrival of the Burnham Institute would certainly increase our area’s high technology profile
at the national level. A future issue in these series will discuss the role of biosciences and the health
care industry in Orange County’s economy.
References
Burnett, R. Army deals in limbo. Orlando Sentinel. Originally published on July1, 2009. Retrieved August 7, 2009
from http://www.orlandosentinel.com/business/orl-bizfuture-combat fallout070109070109jul01,0,6513272.story
Bureau of Labor Statistics, U.S. Department of Labor. 2007 Location Quotient Statistics for Orange County,
Orlando MSA, and State of Florida. Retrievd on March 11, 2009 from http://data.bls.gov
LOCATION_QUOTIENT/servlet/Lqc.ControllerServlet
Corthright, J. and Mayer, H. High Tech Specialization: A Comparison of High Technology Centers. The
Brookings Institution. January 2001. Retrieved June 2009 from
http://www.brookings.edu/reports/2001/01labormarkets_joseph-cortright-and-heike-mayer.aspx.
Devol. R.C. Klowden K., Bedroussian A and Benjamin Y. North America’s High Tech Economy: The
Geography of Knowledge-Based Industries. Milken Institute.
Executive Office of the President, Office of Management and Budget. (2007). North American Industry
Classification System United States 2007. Lanham: Bernan
Hagen, G. Martin, B., Caswell, S. (2003). Impact of Florida’s Modeling, Simulation and Training Industry.
Orlando: National Center for Simulation (NCS)
infoUSA Database License Group. (May,2009). Orange County Business Leads Report .
Lohr, Steve. Unboxed-Governments Embracing a Role in Innovation? New York Times. Originally
published on June 20, 2009. Retrieved on August 7, 2009 from
http://www.nytimes.com/2009/06/21/technology/21unboxed.html?emc=eta1
Orlando Business Journal. 2009 Book of Lists. Volume 29, Issue 29. December 19, 2008
Stokes, M. Team Orlando Military boasts large presence in Research Park. East Orlando Sun. May 21-June 17,
2009. Originally published in the East Orlando Sun. Retrieved on August 7, 2009 from
http://enewsbuilder.net/orcc/e_article001449453.cfm?x=bfD44hs,b10gGhlb
Orange County Growth Management Department
Issues Month of Publication
Planning Division
Research & Intergovernmental Coordination Section
Post Office Box 1393 Leisure and Hospitality October
Orlando, FL 32802-1393
Telephone: 407.836.5600 Health Care and Biotechnology December
Fax: 407.836.5862
E-Mail: planning@ocfl.net
ECONOMIC OUTLOOK SEPTEMBER 2009