Montana’s tech industry hits record $2.9B in revenue

Montana’s high-tech companies overcame and even benefited from the dynamics of a pandemic economy in 2020, generating more than $2.9 billion in revenues and growing at rates up to seven times faster than the statewide economy, according to a survey conducted by the University of Montana Bureau of Business and Economic Research.

The study found that Montana’s high-tech industry employs about 15,772 workers, and Montana High Tech Business Alliance members pay an average annual salary of $73,100, 59% higher than the average earnings per Montana worker. Alliance members expect to add 1,500 new jobs in 2021.

Montana high-tech companies plan to increase wages by 5% in 2021, somewhat faster than the 4.2% growth of all Montana employers in the most recent data. Survey respondents expect to make at least $164 million in capital expenditures at their Montana facilities in 2021. This represents a significant increase from the $133 million survey respondents expected in 2020 major capital expenditures.

“The data show Montana’s tech companies adapted to meet the challenges of the pandemic and continued a multi-year trend of fast growth in 2020,” Christina Quick Henderson, executive director of the Montana High Tech Business Alliance, said in a press release. “...After a tough year, it’s encouraging that Montana’s tech sector continues to create high-paying jobs to support families and keep our kids in the state after graduation.”

The 2021 survey included questions on both the challenges and opportunities tech businesses faced due to the pandemic. The most frequent COVID-related challenge was conducting internal communications and other management activities while working remotely, followed by a loss of sales and economic uncertainty.

The main opportunities created by COVID-19 according to responding firms were the increased acceptance of or need for technology and increased sales.

High-tech companies reported that access to capital was their firm’s largest impediment to faster growth. For the first year in four years, slightly more Alliance high-tech companies — 12% — said it was harder to obtain capital in 2020 compared to the previous year, when 9% reported the same difficulty. Other frequently mentioned impediments to growth were the need for new customers, visibility or marketing and hiring skilled technology workers.

FOR THE seventh year in a row, the bureau’s survey found that Montana’s quality of life – its lifestyle, work/life balance, recreational opportunities and the beauty of the landscape – provided significant advantages to doing business in the state. During the pandemic, the ability to spend time outdoors was a particular advantage. Survey respondents also mentioned Montana’s high-quality workforce as a major advantage.

Nic McKinley, CEO of Verafi, said quality of life was the biggest motivator for moving his company to Whitefish last August.

“Part of the reason we came up here was to wait out COVID and we decided to stay,” said McKinley, whose business provides digital due-diligence services to a range of clients.

When he made the move, McKinley said he was pleasantly surprised by how accommodating the valley was to high-tech businesses. He had little trouble with many of the anticipated challenges of relocating to the Flathead, such as connectivity, workforce and operating on a national scale.

“I think people just assume there isn’t anything big happening here in the valley,” McKinley said. But tech companies like Verafi see a vastly different outlook.

Like many of the survey respondents, McKinley said Verafi is hoping to add more positions in the coming years with staffers coming from the valley and out-of-state.

“We’re in growth mode,” said McKinley, a Billings native.

The full Montana High Tech Industries report can be found at www.mthightech.org/high-tech-surveys.

Reporter Bret Anne Serbin may be reached at 758-4459 or bserbin@dailyinterlake.com