Employed and self-employed workers in tech industries total nearly 132,300 (13.3% of all jobs).
In 2015, Austin’s high tech industries added 7,537 net new jobs (+6.0%).
High tech manufacturers contracted by 796 jobs (-2.3%) from 2014 while nonmanufacturing tech companies added 8,333 jobs (+9.2%).
Annual average employment in high tech industries in the Austin MSA in 2015 was 132,289, up 6.0% from 2014. That’s a greater gain than the 4.2% increase for employment across all industries. High tech jobs represent 13.3% of all Austin area jobs in 2015 and 18.7% of the year’s net new jobs. Nationally, high tech accounts for 6.4% of all jobs. Over the last five years, employment in high tech industries has grown by 32.1%, compared to 20.1% for all industries in Austin.
However, over the last ten years, the gain for high tech (30.3%) is slightly short of the gain for all industries (31.8%). The recession’s impact on Austin jobs was a loss of nearly 20,000 jobs and half of those jobs were in high tech. Thus, while high tech jobs have grown faster than all jobs in each of the last five years, as of 2015, tech’s current 13.3% share of all jobs is slightly below levels maintained before the recession.
New industry data through the final quarter of 2015 was recently released by the Texas Workforce Commission (TWC). The Quarterly Census of Employment and Wages (QCEW) produces much finer industry detail than the monthly Current Employment Statistics program and allows users to examine trends in distinct and narrow sectors like computer systems design or scientific R&D at the metro or even the county level. Since Austin is one of the most technology intensive metro economies in the U.S., we regularly take down new releases of QCEW to quantify the character and trends of Austin’s tech sector.  In this article, we’re departing from our customary practice of directly utilizing TWC’s QCEW data in favor of using QCEW-based estimates from a vendor called Chmura Economics & Analytics. This source allows us to make some area comparisons that would be less easily or not possible to execute with data from state and national QCEW releases. However, all counts of firms in this article are based on employer firms reported by QCEW as published by the TWC.
There are 5,485 high tech employer firms in Austin (12.4% of total). Although there was a small decline in total firms in Austin in 2008, the recession did not cause the number of high tech firms to fall. The number of tech firms grew by 411 or 8.1% in 2015. Firms in all industries number 44,250 in 2015, up 2,080 or 4.9% over 2014. High tech firms are a larger percentage of total firms now than before the recession (the share was 11.2% in 2007). Over the last five years, the number of firms has grown 33.1% in high tech industries compared to 24.7% overall. Among Austin's high tech firms, 5.4% (297) are manufacturing and 94.6% (5,187) are nonmanufacturing.
High tech payrolls in 2015 totaled $13.3 billion, or 23.3% of the Austin metro’s total payroll of $57.1 billion. Payrolls have shown slightly better gains than employment over the last year, and the gain for high tech industries (7.4%) exceeds the gain for all industries (5.6%). However, high tech payrolls have seen a smaller increase over the last 5 years—29.9% compared to 32.1%. Over the last decade total payrolls are up 64.9% compared to 49.7% for tech payrolls.
For all industries, the average annual salary in Austin is $54,678, up 2.8% from 2014, while the average salary across all high tech jobs is $100,625, up 2.6%. Since 2010, the all-industries average annual salary is up 14.6% and the average tech salary is up 6.9%. High tech salary growth primarily faltered in the last three years. After being at or above 197% of the average salary in 2010 and 2011, the average high tech salary fell to 184% of the average all-industries salary in 2014 and 2015. While salaries for both all workers and tech workers are higher in Austin than nationally, the national average tech salary has been increasing compared to all workers.
Austin’s high tech employment is 25.2% manufacturing (33,378 jobs) and 74.8% nonmanufacturing (98,911 jobs). Manufacturing’s share has declined significantly over the long term, however four of the last five years have seen gains in both total manufacturing jobs and high tech manufacturing jobs. High tech’s share of all manufacturing jobs in Austin is 56.5% in 2015, about the average for the last decade, but down slightly from 57.6% last year.
Computer and electronic product makers (177 firms) account for the vast majority of Austin’s high tech manufacturing jobs (28,356 or 85.0%). Of those 28,356 jobs, 13,565 are in semiconductor and electronic components and 10,910 jobs are in computers and peripheral equipment. Pharmaceuticals and medicines manufacturing employs 1,820 and medical equipment and supplies manufacturing employs 1,080.
Austin has a location quotient (LQ) of 2.12 for the collection of industries making up high tech manufacturing, meaning that Austin employs workers in the sector at more than two times the national rate. Within that group, the computer and electronics manufacturing industry employs workers at 4 times the national rate.
Salaries are higher in high tech manufacturing, $122,541, compared to an average of $93,230 in nonmanufacturing high tech industries. In the tech sector, manufacturing salaries have gained 10.7% over the last five years, while the nonmanufacturing average has only risen 6.1%.
Nonmanufacturing high tech industries include subsectors of trade, information, professional and business services, and education and healthcare.
The high tech portions of the information industry include software publishers (148 Austin firms); motion picture and sound recording (200); telecommunications (119); data processing, hosting and related services (126); and internet publishing, broadcast and web portals (147). Other IT-related industries include computer systems design and related services (2,499) in the professional and business services sector and computer training (30) in the education sector. Combined, high tech information and other IT accounts for 56,205 jobs and 3,269 firms in Austin in 2015. Jobs in this group of industries are up 12.9% (6,410) in just one year, clearly dominating the net jobs added (7,537) by the tech sector in 2015. Computer systems design and related services employs 32,019 and grew by 17.2%, or 4,710 jobs, in 2015.
Austin has a LQ of 2.05 for the group of industries we’re calling high tech information and other IT, meaning that Austin employs workers in the sector at two times the national rate.
The average annual salary in high tech information and other IT was $96,125 in 2015, with software publishing and data processing, hosting and related services being the best compensated industries ($124,576 and $105,404 respectively). Salary gains (2.1%) were a bit below average (2.8%) in 2015. The industry group gained 12.0% over the last 5 years, compared to 14.6% for all industries.
After computer systems design and related services, the next largest nonmanufacturing tech industry is computer and software merchant wholesalers (132 firms) which employed 17,952 in Austin in 2015, up 954 jobs or 5.6% from 2014. This trade industry, together with business-to-business electronic markets and electronic shopping represents 407 firms and 20,424 jobs in high tech trade industries.Employment in high tech trade is 15.7% (3,812 jobs) below a peak the industry reached in 2012. In addition to these job losses, the sector saw average annual salary decline from $101,474 in 2012 to $88,469 in 2015 (-12.8%). Austin has fewer high tech trade jobs in 2015 than it had in 2005 while jobs in the sector nationally have grown by nearly 30%. Average annual salary has been below the national average for the last three years.
Conditions in high tech trade, which represents 15.4% of Austin’s tech jobs in 2015, significantly impact overall performance. If the sector were excluded, high tech jobs would be up 41.4% over the last five years, instead of 32.1%; and average salary would be higher as well.
Austin is highly concentrated in high tech trade. Austin has more than 6 times the national concentration of jobs in this group and 12 times the national concentration for jobs in computer and software merchant wholesaling.
Architectural and engineering services (1,136 firms), environmental consulting services (92), scientific R&D services (221), and medical and diagnostic laboratories (63) round out the remainder of the high tech sector and employed 22,283 in 2015, up 3.8% from 2014 and up 7.3% since 2010. Architectural and engineering services employs 15,260 of the total and scientific R&D employs 4,306. Austin’s LQ for engineering, R&D, and labs/testing is 1.3.
An Excel file of TWC data for Austin MSA establishments, firms, employment, and payrolls data for 2005-2015 for all of the high tech industry classifications referenced above, plus data for all other industry classifications up to at least the 3-digit NAICS  level is here. The sheets in this file open on each sheet’s high tech summary table (rows 173-207). Scroll above that table to see data for other industries in order by NAICS (rows 4-171).
 QCEW estimates are derived primarily from the reporting of private business and government agencies under the unemployment insurance program. While all states produce similar data from the program, how much of the data different states publish in terms of industry detail, periods published, and geographic regions reported varies considerably. The U.S. Bureau of Labor Statistics also produces a database of QCEW data for all U.S. counties, metros and states, however, the level of industry detail available for most areas is more limited than desirable for estimating the tech sector.
 Industry LQs are calculated by comparing the industry’s share of regional employment with its share of national employment. High tech manufacturing represents 3.4% of jobs in the Austin MSA, compared to 1.6% nationally. 3.4 divided by 1.6 yields a LQ of 2.12.
 Trade classifications are not commonly found in definitions of the tech sector used in reports such as the Milken Institute’s North America’s High-Tech Economy and others. Although labor agencies makes no disclosures of the names of companies included in different classifications, it is understood that these trade classifications include all or parts of the payrolls of employers that would commonly be considered tech companies and therefore we believe they are important to treat in a review of tech industry trends in Austin.
Related Categories: Central Texas Economy in Perspective