Oregon tech face-lift: Younger, faster, larger

By Technology Association of Oregon.

The Oregonian offered a couple eye-opening articles this week that captures news of encouraging trends in our local tech economy.

State employment figures released last week indicate that Oregon tech employment in August reached its highest level in 12 years, matching levels last seen in the aftermath of the dot-com crash in 2002. The report stated that 60,900 people were employed in Oregon in the three key categories of electronics manufacturing, software publishing, and software design.

While the report is good news, buried in the details is a more telling narrative. Back in 2002, the Oregon technology scene was dominated by electronics manufacturing, such as production of chips, circuit boards and measurement equipment. The sector was heavily influenced by Tektronix and Intel, and the supportive ecosystems that grew up around these firms. But in the intervening years, electronics manufacturing, which traditionally accounted for about 75 percent of tech jobs in Oregon, has largely moved offshore. Oregon has struggled to replace those jobs.

In the meantime, Oregon has become known for as a hotbed for open source software development. “That helped spawn a generation of startups focused on emerging technologies such as cloud computing, mobile technology and social networking,” according to the Oregonian. While these most of these startups remain small, they have attracted a growing pool of software developers to the city, which has had the effect of making Oregon an attractive location for large tech companies headquartered elsewhere to set up outposts here, based on the area’s talent pool and low operating costs.

The consequence: “Software now accounts for 40 percent of all Oregon tech jobs, up from just 25 percent as recently as 10 years ago,” according to the Oregonian.

In another article that demonstrates generational change in the region’s tech sector, the Oregonian reported that in “the Oregonian’s annual ranking of the biggest tech companies based in Oregon and Southwest Washington is experiencing a youth movement. Nearly a third of the companies among this year’s Silicon Forest 25, which ranks companies by annual revenue, were founded since the dot-com era.” To view the ranking, check out the infographic.

Not only are younger, more software-focused companies edging upward in the list of highest revenue companies, the price of admission to join this elite group of companies has also risen: The revenue threshold for reaching the Top 25 has roughly doubled in the past six years, from $10 million annually to nearly $20 million, and the average revenue of the Top 25 has jumped by 30 percent since 2011, to nearly $250 million, according to the Oregonian.

These reports auger well for increased economic growth in the coming months, with younger, larger companies producing the fastest growth the regional tech industry has seen in years.

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