High growth for high-tech: fast-growing, high-paying industry cluster is outpacing other sectors of Montana's economy.

Author:Barkey, Patrick M.
 
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Montana is quietly increasing its footprint in high-tech businesses, with growth projected to vastly exceed the average statewide economic growth. Unbeknownst to many, there are a number of high-tech companies scattered across Montana that are creating high-paying jobs and challenging the older stereotypes about our economic base.

From rural areas of Montana, companies like Spika Welding and Manufacturing are doing business around the world. President and founder Tom Spika started his Lewistown business as a two-person shop and has grown it into a multi-million-dollar company that designs and manufactures equipment for technicians working on military equipment, tactical vehicles, and satellites (see article on Spika Welding and central Montana's manufacturing center, page 10). Perhaps one of the most well-known success stories is that of RightNow Technologies, which launched in 1997 in Bozeman and employed more than 1,100 people (half based in Montana) with average wages of $86,000. RightNow sold to Oracle in 2012 for $1.8 billion.

Also in Bozeman is Workiva, an Iowa-based software-as-a-service (SaaS) company whose platform allows companies to submit business reports, such as SEC filings, digitally (see sidebar, page 5). Workiva's customers include more than 65 percent of Fortune 500 companies. The company has grown to nearly 1,000 employees since its launch in 2008 and went public in December 2014. Workiva's CTO, Jeff Trom, and its second-largest development office are located in Bozeman, with around 70 employees.

In Missoula, Education Logistics (EDULOG) created the first school bus scheduling and routing software for school districts more than 35 years ago and has stayed ahead of the curve with GPS and student tracking solutions, including mobile apps. Edulog has contracted with the Saudi Arabian government on a project to improve the efficiency of the country's school bus system and help females--who are not allowed to drive or go out in public unaccompanied--get to school. The privately held company has more than 150 employees and plans to grow significantly in 2015 (see sidebar on page 7).

This article summarizes a Bureau study on Montana's high-tech industry, which is the first of its kind. The Montana High Tech Business Alliance (MHTBA)--a newly formed, member-driven group of 200 high-tech businesses--asked the Bureau to collect information and insights from its members so that a better assessment of its economic footprint and its prospects for continued growth could be made. The Alliance members include businesses that make or sell high-tech products, provide professional services or consulting related to high tech, conduct e-commerce, or engage in manufacturing using skilled labor, as well as other organizations statewide. The research findings serve as a benchmark and an important assessment of one of Montana's fastest-growing and highest-paying industry clusters.

Key Findings

By almost any measure, growth in high-tech businesses is outpacing that of other sectors of the state's economy, with employment and revenues expecting growth rates that are 8-10 times of statewide growth.

Jobs at high-tech businesses pay considerably more than jobs elsewhere in the economy. Average wages are at about $50,000--twice the median earnings per Montana worker (Figure 1, page 2). One example of a business that pays its employees well for their hard work is Advanced Technology Group Missoula Solutions Center (ATG), located in downtown Missoula (see sidebar, page 8).

Tom Stergios, vice president of ATG's Missoula Solutions Center, started the business in his basement and has now grown it to 60+ employees. The Missoula company delivers strategy, implementation, and managed services for Fortune 1000 companies that have revenues ranging from $160 million to $ 16 billion per year. The average consultant salary is more than $75,000, with senior consultants earning more than $100,000.

While members of the Montana High Tech Business Alliance are located throughout the state, there is a more prominent concentration found in Gallatin and Missoula counties (Figure 2). Montanas high-tech firms are diverse, but software/software-as-a-service (SaaS) is by far the largest industry sub-group (Figure 3). Another interesting fact that emerges is that on average, the state's high-tech companies are...

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