- Over 7,700 employers in the Austin metro area are in high tech industries in 2019.
- Jobs in Austin’s tech industries total 173,837, or 16.4% of all jobs, compared to 8.8% nationally.
- In 2019, jobs in Austin’s high tech industries grew by 7.7%, surpassing the metro’s 3.9% total job growth.
Annual average employment in high tech industries in the Austin MSA in 2019 was 173,837, up 7.7% from 2018. That’s a stronger gain than the 3.9% increase for employment across all industries. High tech jobs represent 16.4% of all Austin area jobs in 2019 and 30.8% of the year’s net new jobs. Nationally, high tech accounts for 8.8% of all jobs.
Over the last five years, employment in high tech industries has grown by 28%, compared to 20% for all industries in Austin. Over the last ten years, the gain for high tech (62%) also surpasses the gain for all industries (43%). Growth of Austin’s tech sector also outpaces tech growth nationally.
New industry data through the final quarter of 2019 was recently released by the Texas Workforce Commission (TWC) and the U.S. Bureau of Labor Statistics (BLS). 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 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 examine new releases of QCEW to quantify the character and trends of Austin’s tech sector. To simplify the data for this look at the composition and currents of Austin’s tech sector, this article aggregates individual tech industries into several groupings—manufacturing; energy; trade; information and other IT; and engineering, R&D, labs/testing and other.
There are 7,706 high tech employer firms in Austin. The number of tech firms grew by 490 or 6.8% in 2019. Total firms in Austin number 52,099 in 2019, up 1,994 or 4.0% over 2018. Over the last five years, the number of firms has grown 34% in high tech industries compared to 24% overall. High tech firms account for 14.8% of all firms in 2019, up from 13.7% five years ago and 13.1% ten years ago. Among Austin's high tech firms, 6% (490) are manufacturers and 94% (7,259) are in nonmanufacturing industries.
High tech payrolls in 2019 totaled $21.8 billion, or 31.2% of the Austin metro’s total payroll of $69.9 billion. Total payroll growth in 2019 was 9.8%, while the gain for high tech industries was 13.8%. High tech payrolls also have an edge over the last five years, gaining 61% compared to all payrolls gain of 46%. Over the last decade, tech payrolls are up 123% compared to 98% for all payrolls.
For all industries, the average annual salary in Austin is $65,843, up 5.7% from 2018, while the average salary for high tech jobs is $125,425, also up 5.7% over last year. Since 2014, the all-industries average annual salary is up 21.5% and the average tech salary is up 26.2%. Over the last decade, the differential between all industries and tech is slighter—38.7% overall and 38.2% for tech. High tech salary growth in Austin primarily faltered relative to all industries in 2013, as well as during the last two recessions. In 2006, before the Great Recession, the average high tech salary was 199% of the average salary. The average high tech salary registered a post-dot-com recession low of 183% of the all-industries salary in 2014, but attained 190% in 2018 and 2019.
Austin’s high tech employment is 22% manufacturing industries (39,980 jobs) and 78% nonmanufacturing industries (134,856 jobs). Jobs in high tech manufacturing gained 4.5% in 2019 while nonmanufacturing tech jobs gained 8.6%. Manufacturing’s share of Austin’s tech jobs has declined significantly over the long term. Before the last recession, manufacturing accounted for over a third of Austin’s tech jobs. High tech’s share of all manufacturing jobs in Austin is 62.8% in 2019, up from 62.0% in 2018.
Computer and electronic product makers (195 firms) dominate Austin’s high tech manufacturing jobs (27,906 or 72%). Of those jobs, 14,218 are in semiconductor and electronic components and 9,097 jobs are in computers and peripheral equipment. Pharmaceuticals and medicines manufacturing employs 2,113 and medical equipment and supplies manufacturing employs 1,400.
Austin has a location quotient (LQ) of 1.6 for the collection of industries making up high tech manufacturing, meaning that Austin employs workers in the sector at over one-and-a-half times the national rate.Austin’s computer and electronics manufacturing industry employs workers at over 3.6 times the national rate. However, within that industry grouping, computer and peripheral equipment manufacturing has a LQ of 7.9 and semiconductor manufacturing has an LQ of 5.3.
Salaries are higher in high tech manufacturing, $141,475, compared to the average of $120,786 in nonmanufacturing high tech industries. In Austin’s tech sector, manufacturing salaries have gained 23.2% over the last five years, while the nonmanufacturing average has risen 29.2%. Over the same period, the average salary for all industries rose 21.5%. Over the last year, salaries in high tech manufacturing rose 10.6% and high tech nonmanufacturing gained 4.2%, while the average salary for all industries increased 5.7%.
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 (238 Austin firms); motion picture and sound recording (273); telecommunications (134); data processing, hosting and related services (205); and internet publishing, broadcast and web portals (201). Other information technology (IT)-related industries include computer systems design and related services (3,261 firms) in the professional and business services sector and computer training (43) in the education sector.
Combined, high tech information and other IT accounts for 73,175 jobs and 4,353 firms in Austin in 2019. Jobs in this group of industries are up 8.7% (5,846) over the last year, dominating the net jobs added (10,687) by nonmanufacturing tech industries in 2019. Computer systems design and related services employs 40,266 and grew by a moderate 2.7%, or 1,062 jobs, in 2019. Driving growth this year were the smaller data processing/hosting (up by 1,376 jobs or 23.0%) and internet publishing/broadcasting/web search portals (up by 2,276 jobs or 78.8%) industries.
Austin has a LQ of 2.3 for the group of industries we’re calling high tech information and other IT, meaning that Austin employs workers in the sector at more than two times the national rate. Data processing/hosting is the sector with the largest LQ (2.9) in this grouping.
The average annual salary in high tech information and other IT was $122,013 in 2019, with data processing/hosting and computer systems design being the best compensated industries ($136,501 and $134,480 respectively). Salary gains (2.4%) were below average (all industries and all tech both grew 5.7%) in 2019. The industry group gained 26.7% over the last five years, compared to 21.5% for all industries.
After computer systems design and related services, the next largest nonmanufacturing tech industry is computer/computer peripherals and software merchant wholesalers (173 firms) which employed 19,927 in Austin in 2019, up 1,151 jobs or 6.1% from 2018. This industry, together medical equipment merchant wholesalers, business-to-business electronic markets, and electronic shopping and mail-order houses represents 705 firms and 26,541 jobs in Austin’s high tech wholesale and retail trade industries. The average annual salary is $127,206 in 2019, up 8.8% over 2018.
Austin has 37.3% more high tech trade jobs in 2019 than it had in 2009, while jobs in the sector nationally are up by 31.6%. The driver of job growth nationally has been electronic shopping and mail-order houses. This industry has grown 68% over the decade, while computer and software merchant wholesaler jobs are essentially unchanged nationally. As of 2019, electronic shopping and mail-order accounts for 44.2% of high tech trade jobs nationally. In Austin, electronic shopping and mail-order represents only 15.6% jobs in the grouping, but growth over the decade is 372%.
Austin is highly concentrated in high tech trade. Austin has over four times the national concentration of jobs in this group and has more than 12 times the national concentration for jobs in computer and software merchant wholesaling. The other trade industries are also more concentrated in Austin, but less dramatically (with LQs of 1.1 to 2.0).
High tech energy (oil and gas extraction and electric power generation, transmission and distribution) is the smallest tech grouping in Austin with 118 firms employing 6,253 in 2019. Oil and gas extraction presently only accounts for 1,251 jobs, and growth has been slower than average—negative over the last year and less than half overall growth over the last five years and the last decade. Oil and gas’ average annual salary, $369,436, is by far the highest within tech and also the highest across all industries in Austin in 2019.
Architectural and engineering services (1,270 firms), environmental consulting services (102), other scientific and technical services (278), scientific R&D services (250), medical and diagnostic laboratories (76), electronic and precision equipment repair and maintenance (104), and national security and international affairs (4) round out the remainder of the high tech sector. This grouping employed 28,888 in 2019, up 11.4% from 2018 and up 19.7% since 2014. Architectural and engineering services employs 16,670 of the total while scientific R&D employs 4,115. Austin’s LQ for this grouping we're calling "engineering, R&D, labs/testing and other services" is 1.1.
An Excel file of TWC data for Austin MSA establishments, firms, employment, payrolls, and average salary data for 1990-2019 for all of the high tech industry classifications referenced above, plus data for all other industry classifications is here. The file opens on an extract of the data for high tech industries as employed in this article. The second tab in the file contains national employment data from the BLS for 2008-2019 for high tech industries. Other tabs in the file contain Austin MSA data for all industries from major sectors to 6-digit NAICS. The data in the file is “total,” i.e., represents private and public employers.
- 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. TWC’s data begins in 1990, and for Austin in 2019, estimates are published for over 1,350 industry classifications. The U.S. BLS also publishes a database of QCEW data for all U.S. counties, metros and states, however, the level of industry detail available at the local level is often more limited than desirable for estimating the tech sector, hence the omission of metro comparisons from this article. ↩
- Industry LQs are calculated by comparing the industry’s share of regional employment with its share of national employment. High tech manufacturing represents 3.7% of jobs in the Austin MSA, compared to 2.3% nationally. 3.7 divided by 2.3 yields a LQ of 1.6. ↩
- Computer systems design and related services (NAICS 5415) includes custom computer programming services (24,459 jobs), computer systems design services (14,715 jobs), computer facilities management services (389 jobs), and other computer related services (703 jobs). ↩
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