Montana tech sector continues growth despite setbacks

Montana’s technology sector has continued growing in the last few years, becoming an increasingly larger presence in many Montana communities, but the industry is still seeing some serious issues holding it back.

At last month’s Economic Outlook Seminar 2022, put on by University of Montana’s Bureau of Business and Economic Research, a number of experts discussed state and local economic issues, including Montana High Tech Business Alliance Executive Director Christina Henderson, who provided an update on the state’s growing tech sector.

Henderson said the sector is continuing to grow in 2022, but, like many other segments of the economy, it is being held back by workforce and workforce housing shortages.

She said more data on the sector’s growth is being examined, but based on the data they have now it is growing seven times faster than the overall economy and, on average, offers twice the median wage, bringing in $2.9 billion in revenue.

She said the software subsector is one area that has grown significantly with Bozeman and Missoula still the main hubs in the state.

However, Henderson said, the Flathead Valley area is starting to see a cluster develop as well.

She said the opportunity for remote work also expands where workers could be located. Not all tech companies use remote work, Bozeman-based tech company New Enterprises has an office culture where it wants workers in its central location, Henderson said. But it is having problems recruiting enough workers and is looking to expand its workforce in Billings.

She said as she has gone around the state having “happy hours” with local tech people in different towns, she is hearing of people working in new locations. One example was a man who had lived in Missoula for almost a decade but couldn’t find housing so he moved to Butte and is working from there.

Other Montana tech companies have what they call remote-first culture, she said, “so you could be working from anywhere in Montana.”

She said that trend is a wonderful opportunity for people to return home to where they are connected.

She said she is hearing lots of stories about people coming home to the family ranch, returning and living with their parents for a while until they can find a house, “planting roots here because they are free to work from wherever they want.”

She said at the happy hour in Havre she met a couple who both have degrees in computer science and, once the pandemic hit, they decided to move home to Havre and they work remotely from here.

She also said she is meeting many people who got priced out of Missoula and Bozeman, and anyplace that can offer homes for $200,000 or less could attract people who would work remotely — people can’t find homes for that price in Montana’s high-tech centers.

Overall, she said the tech sector in Montana drew a significant amount of out-of-state investment last year, as well as benefiting from in-state venture capital.

Henderson said part of the recent growth may be a result of the pandemic accelerating a shift toward remote work, allowing many companies to relocate to Montana.

One high-profile example of this, she said, is Snowflake, a cloud-based data warehousing company with one of the largest software IPOs in history, which recently moved their corporate headquarters to Bozeman from California.

Despite these successes, the sector is still facing three big challenges to its future growth, housing, workforce and education.

Henderson said an ongoing shortage of affordable places to live in places like Bozeman and Missoula exists, and it is becoming a serious problem with potential workers having trouble finding homes not just in urban communities, but rural ones as well.

She said some tech firms have had to get into real estate themselves just to try to find a way to fix it, advocating on behalf of employees to landlords, buying houses and investing in real estate ventures.

She also said the workforce shortage is getting worse, with fewer and fewer experienced candidates becoming available.

She said tech is still a relatively new sector in the state and they need to raise awareness of the industry so they can get more students interested.

Henderson said many companies are working to create easier pathways for students to get into the industry, including work-based learning, as well as finding ways to streamline and simplify the grant processes for philanthropic organizations.

She said the industry is also being held back by an ongoing lack of affordable child care as well.

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Havre Daily News Managing Editor Tim Leeds contributed to this story.