It’s well known that the technology industry is playing a big and growing role in Utah’s economy, but a new in-depth study on its magnitude might surprise you.
Research by the University of Utah’s Kem C. Gardner Policy Institute suggests the sector accounted for one in seven jobs in the state in 2018 and more than 16% of all worker earnings, generating more than $2.5 billion in state and local tax money.
The study, which adds to related research published earlier this year, found that the sector’s total economic impact reached $29.7 billion last year, when direct and indirect effects on other industries were taken into account.
Unprecedented growth in technology during the past decade has given the industry an outsized share of the state’s overall economic activity, said Levi Pace, senior research economist with the Gardner Institute, who led the study.
“In terms of total employment and wages in the private sector, no state with an economy Utah’s size had a larger tech industry in 2018,” Pace said in a statement Tuesday, as the study was released in Salt Lake City.
The landmark research, funded by the Utah Legislature, is meant to help businesses and elected leaders “make informed decisions,” he said.
The tech sector’s expansion also has brought major challenges, officials said, including heightened demand for housing, pressure on transportation, wage inequities and training enough highly skilled workers to fill hundreds of new jobs created each year.
“There are rain clouds in this that we do have an opportunity to solve,” said Clint Betts, executive director of Silicon Slopes, the name given to the Interstate 15 corridor linking Salt Lake and Utah counties, where many tech companies are located.
There are now an estimated 118,600 jobs in Utah’s tech industry, devoted to software, information technology support, e-commerce and high-tech device manufacturing. Another 50,100 jobs are tech-related in aerospace, life sciences, defense and other sectors and nearly 43,800 jobs are held by tech workers in other industries, including those who are self-employed, the study found.
And when support employment elsewhere in the economy is taken into account, the tech sector is thought to account for 310,500 jobs statewide, for about 18% of the state’s total yearly gross domestic product.
That ranks technology as Utah’s third largest employer, behind jobs in leisure and hospitality and those in construction.
As Utah’s economy grew over the past decade, its tech employment rose by 4.9% a year compared with 1.9% annual job growth in all other industries. That expansion in tech employment was more than three times larger than the national rate of 1.4% yearly.
That gave Utah the second-highest tech job growth rate between 2008 and 2018 in the country, slightly behind the state of Washington, home to tech giants such as Amazon and Microsoft.
That same decade saw widening media buzz about Silicon Slopes nationally, a surge of investment, expansions into the state by Adobe, Amazon and Facebook — and, more recently, major stock offerings by Utah companies such as Pluralsight and Domo.
“We are no longer punching up. We are in our weight class, and we are dominating it," said Elizabeth Converse, director of operations for Utah Technology Council, a nonprofit devoted to growing Utah’s high-tech and life sciences sectors.
Research indicates Utahns filling tech occupations were more likely to be male, white or Asian and at a midpoint in their careers than those working in other sectors. Pace said most tech positions are filled by Utah natives, with only between 10% and 20% of jobs going to those relocating from other areas.
In key ways, Utah’s entrepreneurial and business startup culture appears to be feeding into the tech industry’s growth.
Of the 6,711 companies in the state’s tech sector, nearly three-quarters had five employees or fewer, while roughly 154 firms had more than 100 workers. Only six — L3 Technologies, Adobe, Clearlink, eBay, IM Flash and Overstock had between 1,000 and 2,000 workers, the study found.
And these are relatively well-paying jobs, according to numbers from the state Department of Workforce Services. Average compensation was at $106,100 yearly, compared with $58,500 in all other kinds of jobs.
Even at those pay rates, average salaries in Utah’s tech sector still hover about 27% below those paid in other states, Pace said.
Despite its relatively high pay, Utah’s tech sector has thousands of positions that remain unfilled each year, prompting questions on how the state’s colleges, universities and applied technology centers are teaching computer science and related skills.
By one estimate, hiring all the computer science graduates at the University of Utah in a given year would still not fill all the open positions at Qualtrics, the Utah-grown customer-experience software firm based in Provo, purchased late last year by German-based SAP for $8 billion.
“If you’re in tech and you want a job, you’ve probably got one,” said Matt Hilburn, vice president of marketing and research at Economic Development Corporation of Utah.
For now, most of the sector’s economic activity is centered in Salt Lake and Utah counties, as well as St. George and Logan, the study found. But of all 29 counties in Utah, 28 had at least one technology company. Twenty cities and towns in Utah boasted 50 or more tech firms.
Betts said industry leaders are now seeking to push some of that growth off the Wasatch Front, by encouraging new startups in rural communities, part of what he said was a larger effort to widen access to the sector’s benefits across the state.
At their most recent Silicon Slopes Tech Summit held in Salt Lake City in February, top CEOs committed $5 million to boost and expand computer science instruction, with a goal of reaching every Utah school by 2022.
“That’s going to be critical for the next wave," Betts said, "and as we extend access to opportunity to all.”
Editor’s note: Elizabeth Converse is the spouse of a Salt Lake Tribune reporter.