Montana's outdoor recreation is big draw for fast-growing high-tech industry
Software engineers and other tech experts like to hike, ski, hunt, fish and boat as much as anyone else, and they're finding Montana is a great place to live and work — without the traffic jams.
According to a recent survey completed by nearly 189 technology and manufacturing companies in Montana, the state’s outdoor recreation opportunities are a major reason why they’ve been able to attract and retain enough skilled talent to generate nearly $1.7 billion in revenues in 2017 and grow at rates up to nine times faster than the statewide economy.
That’s according to a new study conducted by the University of Montana’s Bureau of Business and Economic Research, which got responses from the businesses about everything from hiring plans to wages, employment and capital expenditure over the past four years.
“Ninety-nine percent of our customers are outside the state, but Missoula continues to be an ideal place for our tech business,” said Jason Corbally, president of Education Logistics (EduLog), a Missoula company that provides transportation tech solutions all over the world. “The University of Montana provides a steady pool of well-educated, diligent applicants, and the area’s recreational and cultural opportunities are very attractive to talented out-of-staters. After all, who doesn’t want to work and live in paradise?”
According to the study, Montana high-tech companies expect to increase wages by 5 percent in 2018 and the survey respondents expect to add more than 1,200 new jobs, which would be an 18.5 percent increase over 2017. These employers pay more than twice the median earnings per Montana worker.
“The growth trajectory of Montana’s high-tech industry has far exceeded our expectations when we began collecting this data in 2015,” said Christina Quick Henderson, executive director of the Montana High Tech Business Alliance.
“The removal of geography as a barrier to doing business, Montana’s attractiveness as a location for startups and second offices, and the economic success of companies like RightNow Technologies in Bozeman and onX in Missoula have all converged to create billions of dollars in revenue in a state with just over 1 million people. This data tells a new and surprising story about what is possible not just for our state, but for other rural communities across America.”
In fact, Henderson said economists at UM believe the impact of the tech industry in Montana is two to three times greater than the BBER report states because there are roughly 570 tech and manufacturing firms in the state, but only 189 responded to the survey. The Alliance has 325 member firms in the state, of which 80 percent are high-tech companies and 20 percent are law firms, banks, public institutions and economic development groups. The total employment of Alliance firms has increased from 2,742 in 2014 to nearly 6,000 in 2017, and the companies pay a median wage of $50,700.
When ClassPass, a New York City-based tech company that developed an app to give fitness lovers more freedom to choose gyms, announced it was opening a Missoula office with plans to hire more than 50 positions, CEO Fritz Lanman said the Garden City’s outdoor recreation opportunities were a major reason for the move.
“When Missoula made the short list, I was ecstatic as I had personally experienced the abundant active lifestyle opportunities in the area and the dynamic and unique character of the city and community,” Lanman said. “We wanted to find a city that was a fit for our mission and culture; a place that offers an active lifestyle and access to inspiring experiences, a progressive mindset, forward-thinking civic leaders and a respected University. Missoula checks all those boxes and more.”
Like many tech companies in Montana, ClassPass’ customers are all out-of-state, so money is flowing into Montana rather than being taken from in-state competitors. Other tech companies that are focused on the outdoors include onXmaps in Missoula, a mapping technology company that recently announced it had acquired $20.3 million in venture capital funding.
"We launched onX in 2009 from my wife’s scrapbooking room in our Missoula home,” said Eric Siegfried, CEO of onX. “Since then, the company has moved into much larger offices in Missoula and opened an office in Bozeman to house almost 70 employees. Over the past nine years, tens of millions of dollars in revenues and investment from out of state have flowed through onX and into Montana.
"This state’s culture, people, and landscape all played a major role in that growth story," Siegfried said. "Today’s report reinforces that Montana is the ideal place to build enduring tech companies."
Attracting talent remains the No. 1 barrier to growth, Henderson said, because the unemployment rate is low and Montana’s skilled workers often leave for better wages elsewhere. However, for the fourth year in a row, the BBER survey found that Montana’s quality of life including the recreational opportunities, the emphasis in many workplaces on a work/life balance, and the beauty of the landscape provided significant advantages to doing business in the state.
That's good news for the Missoula economy. A recent impact study done by BBER showed that a single tech company, Advanced Technology Group in Missoula, generates $20 million for the community and employs more than 100 people.
"The latest survey about Montana's fast-growing tech industry confirms what we've come to expect from doing business in Montana: a high-quality workforce, opportunities for growth and a supportive environment in which to do business." Matt Rizai, chairman and CEO of Workiva in Missoula, a tech company that created a cloud-based collaborative work management process.