High-tech companies are an important component of Montana’s economy, generating more than $1 billion in revenues in 2016 and growing at rates seven times faster than the statewide economy, according to a recent study conducted by the University of Montana Bureau of Business and Economic Research.
The study found that Montana High Tech Business Alliance members were responsible for $1.09 billion in revenues, an increase from $867 million in 2015, and responding nonmember firms generated an additional $487 million.
This third-annual survey, commissioned by the Montana High Tech Business Alliance, includes responses from members of the statewide organization — which include 300 high-tech and manufacturing firms and affiliates — as well as responses from 82 nonmember high-tech and manufacturing companies. It also includes new insights on Montana’s business climate and beneficial business resources.
The study found the high-tech sector expects to add more than 960 new jobs in 2017 that pay average annual salaries of $60,000 — more than twice the median annual earning per Montana worker.
“Our third annual report shows once again the incredible opportunity for the high-tech industry to transform Montana’s economy by bringing high revenues and high-paying jobs into the state,” said Christina Henderson, executive director of the alliance. “But this year’s survey also showed that Montana’s positive business climate and extensive network of business resources — from our universities and nonprofits to mentor companies, banks and government — all play a crucial role in helping Montana entrepreneurs succeed.”
This year’s survey examined perceptions of the climate in Montana for new businesses, as well as various resources within Montana that have been helpful to businesses as they start and grow. The data will be used for a case study on entrepreneurial ecosystems to be completed this spring. The project is a partnership between the Montana High Tech Business Alliance, the Ewing Marion Kauffman Foundation, the UM Blackstone LaunchPad and MonTEC, UM’s business incubator.
While starting a business in any state can be challenging, 77 percent of alliance members and 63 percent of nonmembers would encourage someone to start a business in Montana, according to the survey.
“Overall, this is a strong endorsement of Montana’s business climate,” said John Baldridge, bureau director of survey research.
Among alliance members, the Montana High Tech Business Alliance was the most often cited beneficial business resource. Montana University System-based resources were cited by substantial proportions of both alliance members and nonmembers. These MUS resources included UM, Montana State University, the UM and MSU Blackstone LaunchPads, MonTEC and the Montana Manufacturing Extension Center.
Government resources and other Montana companies also were important to survey respondents for business, financial and legal mentorship, and advice.
Respondents found the following financial resources most beneficial to their firms: bootstrapping (creating and sustaining a business based on sales and little external funding), private investors and banks. Alliance members were most likely to mention bootstrapping, and nonmembers were most likely to mention banks.
For the third year in a row, the survey found that Montana’s quality of life — its lifestyle, work/life balance, recreational opportunities and natural beauty — provided significant advantages to doing business in the state. Survey respondents also mentioned Montana’s high-quality workforce as a major advantage.
“Missoula is particularly poised for growth due to the underemployment that is prevalent in our area,” said Tom Stergios, senior vice president of strategy and corporate development and general manager of Advanced Technology Group’s Missoula office. “ATG is pleased to have hired nine people already this year and plans to add 25 to 30 more jobs in 2017.”
Stergios said Montana university programs, particularly management information systems, have morphed and are producing instantly impactful employees, which is a significant foundational component to a growing tech economy.
“The 2017 survey shows the positive trend in tech and the definitive proof of the ability to significantly impact the Missoula community,” he said.
As in previous years, respondents mentioned several barriers to faster growth, including attracting talent, hiring skilled technology workers, access to capital and finding new customers. For the first time, challenging market conditions were mentioned as a barrier to growth.
The third annual survey was sent to 242 Montana High Tech Business Alliance member companies and 304 nonmember companies.