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Montana’s Tech Industry Continues to Grow Despite Pandemic

Many tech companies across the state were able to adapt well to the pandemic-induced changes that allowed the industry to continue to grow. Montana’s tech sector generated $400 million more in 2020 than it did the year prior.

(TNS) — Montana's high-tech industry overcame and even took advantage of the economic shifts that occurred in the pandemic, according to a new report from economists at the University of Montana.

The tech sector in the state generated $2.9 billion in revenues in 2020, $400 million more than the previous year, per data from the Bureau of Business and Economic Research.

"We were pleasantly surprised to see growth in the industry continue despite the effects of COVID-19," said Christina Henderson, the director of the Montana High Tech Business Alliance, a nonprofit trade association that represents about 250 companies.

There are another 350 high-tech firms in the state that are not members of the Alliance, Henderson said.

Economists John Baldridge and Janet Stevens surveyed 100 Alliance firms and 95 nonmember firms for their report, which can be found online at bber.umt.edu.

They found that the average annual salary was $73,100 at Alliance-member firms and $59,500 at non-member firms last year. Combined, those 195 companies paid an average of 59 percent more than the average earnings of a Montana worker.

Only workers in the mining, utilities and management sectors make more than tech workers.

"By essentially any measure, growth projected in member and nonmember high tech businesses significantly exceeds average statewide economic growth," Baldridge and Stevens wrote in the report. "Employment and revenues are expected to grow roughly seven times BBER's projected statewide growth rate (in 2021)."

Henderson said many tech companies were able to adapt to the changes brought on by the pandemic.

"It was interesting to see the way a lot of tech companies were pretty well-positioned to make it through the pandemic with a more rapid adoption of technology," she said. "The ease with which a lot of tech companies were able to shift to remote work helped them navigate the choppy waters of 2020."
Sherri Davidoff, the founder of Missoula-based cybertechnology firm LMG Security, told the Missoulian in the spring of 2021 that the pandemic was beneficial for her business in many ways.

First and foremost, the shift to remote work allowed her staff to save time and money.

"And so now our consultants don't have to travel," Davidoff explained. "They used to be on airplanes all the time. We used to have to take a day to go out to the East Coast and a day to fly back and then we multiply that by, like, you know 20 consultants, and all of a sudden, that's a huge amount of time that was being wasted on travel which now we can put to good productive work."

The coronavirus wasn't beneficial for every tech company in the state. ClassPass, a fast-growing fitness tech firm that remodeled a large downtown office in Missoula before the pandemic hit, was forced to lay off scores of employees as gyms around the country shut down.

Other Missoula firms surged forward.

Cognizant ATG, a tech consulting company in Missoula, is constantly hiring and is in the midst of building two new buildings to house an estimated 350 more employees in the Old Sawmill District.

"A lot of companies shifted and opened up new lines of business to help facilitate businesses and consumers ramp up online ordering or adopting new IT services and software," Henderson said. "It was a combination of the marketplace shifting and companies adapting to that and just hustling and finding new business."

Tech companies in Montana are having a hard time finding workers right now, even with high wages.

"We're hearing a whole new dynamic that companies are facing," Henderson said. "They're having to recruit more aggressively and jobs are open for a longer period of time before they're filled."

The skyrocketing price of housing all across the state is playing a big role, she noted.

"Even though high-tech is generally a higher-paying field, with wages in tech twice the overall Montana economy, housing costs have skyrocketed at such a rapid pace that employers are really worried where new hires or employees are going to live," Henderson explained.

She's heard from tech company executives that employees are seeing rents go up by hundreds of dollars a month, she said.

"If folks can't find places to live, there's a real workforce concern with the higher cost of housing," she said.

Montana Governor Greg Gianforte is a former tech company executive and co-founded the Montana High-Tech Business Alliance in 2014. In a statement emailed to the Missoulian, he said he supports Montana's tech industry, which is important to the economy.

"In addition to agriculture, natural resources, manufacturing, and tourism and hospitality, Montana's diverse economy includes the high-tech sector, which as Montana's fastest growing industry, continues to expand and create good-paying Montana jobs," Gianforte said.

Gianforte also noted the state is looking at ways to attract more tech businesses.

"As we increase access to reliable broadband, high-tech businesses can be in any Montana community, and we'll continue inviting Montanans who've left to return home, bringing their jobs and their appreciation for our Montana way of life with them," he said.


(c)2021 Missoulian, Mont. Distributed by Tribune Content Agency, LLC.
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