RALEIGH – The tech industry employed over 254,000 people accounting for only 5.8 percent of the total jobs in North Carolina, but the industry “packs a large punch in overall impact,” according to the 2019 State of Technology report from NC Tech.
The tech industry in NC was worth $86 billion in sales revenue, accounting for 11 percent of the state’s total wage earnings and sales, for instance, according to the report which cites data from 2017.
Tech growth in the industry has been particularly notable, the report says. In 2017, there were over 19,300 technology establishments operating in North Carolina, an increase of 500 from estimates in the previous report.
The tech sector in the state has an employment multiplier of 3.24, meaning that for every three jobs in the technology industry approximately seven other jobs are supported throughout the state economy across all industries. So, $86 billion in sales in the technology industry supports $164 billion in sales across the state economy, accounting for over 21 percent of sales revenue.
The most encouraging metric
Not all tech jobs are in tech companies, the report notes, citing a total of 299,518 tech positions in all industries in the state. This number is higher than the 254,230 workers employed by the technology industry because a significant portion of tech occupations are outside traditional technology companies. Only 37 percent of tech occupations jobs are actually conducted at tech companies. The rest are employed in other industries such as manufacturing and finance.
While almost every state has far from equal representation in this industry, NC is behind only the District of Columbia for its employment of women in the technology sector, making it the highest ranked, #1 state for women in the tech sector.
The most encouraging metric of NC’s technology industry, the report states, is the NC’s recent technology growth and its growth potential. In the past five years, jobs in this industry grew by 17.2 percent in the state. That is the third highest growth rate in the country and well above the national average of 6.7 percent.
Employment growth rate in IT from 2012 to 2017 was 21.1 percent. This ranks North Carolina number 6 across all states.
Two occupations saw the greatest growth and account for the most tech jobs in NC. Jobs for software and app developers grew by 30 percent since 2012, while computer systems analyst positions were up by 29.3 percent. Those positions also represented the two occupations with the greatest number of jobs in the state with software at 8.3 percent of the total and systems analysts at 7.9 percent.
Among the state’s strengths, its major research universities continue to rank highly. North Carolina ranks #3 in the nation in dollars awarded for academic science and engineering R&D.
Low cost of operation a plus
The report points out that the number of startups can indicate the level of entrepreneurship interest within a state’s universities. North Carolina ranks #6 in highest number of start-ups spin off from its universities in 2017 with 41 new companies established.
One attraction the state has for tech startups and established companies alike is its lower operational costs. In the 2018 NC Tech Talent Report, the estimated one-year cost of operating a 500-employee tech firm in Raleigh or Charlotte was $16.3 million less expensive than in the San Francisco Bay area.
Despite all this good news, North Carolina’s location quotient of 0.95 “does not indicate a statewide comparative advantage to the nation in terms of technology employment or a dominant contributor to the state’s economic base,” according to the report.
North Carolina ranks 20th among the states in this category, reflecting a more diversified statewide economic base and indicating the North Carolina technology sector is not a national technology concentration leader. However, since the first State of the Technology Sector report, North Carolina has continued to move up in this category year after year.
The report concludes: “ Based on the other strong rankings there is reason to expect tech to move to a more prominent role in the state economy.”
The report notes that NC strengths include:
- Employment growth across 1-year and 5-year time frames
- Competitive wages with high purchasing power
- High levels of academic R&D funding for science and engineering
- Top 10 state in rate of technology transfer from universities
- High percentage of women in the industry workforce
- Cheaper operational costs than traditional tech markets