Technology’s silver lining

Where are all those technology jobs we’ve been hearing about?

The Pittsburgh region’s technology sector didn’t produce a torrent of new jobs between 1990 and 1996, acknowledges Ray Christman, president of the Pittsburgh Technology Council. In fact, employment in the technology sector in the Pittsburgh metropolitan statistical area was flatter than flat, down nearly 2 percent over the period.

But the numbers revealed in the council’s State of the Industry Report, Christman maintains, show only part of the picture. A more balanced and optimistic view should come out of the council’s next report, a project its leaders are in the process of developing.

“When we do the next update, I suspect you’ll see a significant increase in employment,” Christman advises.

Christman says the early years covered by the study were sluggish for the economy overall. Given the assumption that Pittsburgh tends to lag behind national trends, he says he believes that data gathered for 1997 and later will show much higher employment numbers.

According to the study, the good news for the region, says Christman, is that there’s been an overall increase in the number of companies in the technology category. That development, he says, will begin to show its effects on employment levels when the council issues its next report.

The report shows that the number of companies increased from 3,078 to 3,780, a rise of nearly 23 percent. The job creation from those firms should show up in future reports, Christman predicts.

And beyond the raw number of jobs, Christman points to the quality of those technology jobs and their respective contribution to the economy. While jobs in information technology and software made up 10 percent of the total positions, for instance, they garnered 20 percent of the overall wages and salaries, indicating that the industry is yielding the high-paying jobs that technology advocates have promised.

While finding and keeping skilled technology workers is of some concern, Christman suggests the old complaint that Pittsburgh is not a place where highly-skilled technology workers can move from firm to firm to seek out new opportunities and develop careers has been debunked.

“I don’t think people worry about that as much, if at all,” says Christman.

And recent reports of companies in the region being purchased and, in some cases, moved out of the area, are overemphasized in proportion to their impact, Christman said. That process occurs in every region of the country, he says, and doesn’t always lead to an outflow of companies.

The report also lends support to the idea that nothing helps technology companies grow more than proximity to other technology companies. Don Smith, executive director of the Center for Economic Development at Carnegie Mellon University, which assisted in the design and compilation of the study, says he sees evidence in the report and otherwise that the technology sector is reaching a critical mass that will bolster the start of new firms, the growth of existing enterprises and investment in Pittsburgh by outside companies.

“Technology companies thrive best when they’re embedded in complexes of technology companies,” says Smith. “We’re now approaching critical mass in some of those key areas.”

And to support the view that such a complex is developing in the region, Smith calls attention to entrepreneurial spinoffs spawned by former employees of companies like Fore Systems and Galt Technologies.

“We’re starting to see some second- and third-generation start-ups,” he says.

That would appear to be good news, if, in fact, a critical mass in technology is developing.

“The reality is that entrepreneurs tend to start companies where they’re from,” says Christman.