• Nearly 9,600 employers in the Austin metro area are in high tech industries in 2021.
• Jobs in Austin’s tech industries total 184,177, or 16.7% of all jobs, compared to 9.2% nationally.
• In 2021, jobs in Austin’s tech industries grew by 4.3%, while the metro’s total jobs increased by 7.3%.
• Austin’s share of national jobs in tech industries has steadily grown over the last decade.

Annual average employment in high tech industries in the Austin MSA in 2021 was 184,177, up by 7,669 or 4.3% from 2020. Job growth for all industries was higher at 7.3%, but that performance follows 2.8% negative growth in 2020. Despite COVID-19, Austin saw 3.6% growth in high tech jobs in 2020. Nationally, employment in tech industries grew 3.3% in 2021, following a 0.2% decline in 2020.

Over the last five years, employment in tech industries has grown by 28.7%, compared to 16.0% for all industries in Austin. Over the last ten years, the gain for tech (58.4%) also surpasses the gain for all industries (41.3%). Growth of Austin’s tech sector also outpaces tech growth nationally, which was 9.4% over the last five years and 18.7% over the last decade.

Tech industries represent 16.7% of jobs in the Austin MSA, compared to 9.2% nationally. Austin has a location quotient (LQ) of 1.81 for the collection of industries making up tech, meaning that Austin employs workers in tech industries at just under two times the national rate. Industry LQs are calculated by comparing the industry’s share of regional employment with its share of national employment. Dividing 16.7 by 9.2 yields an LQ of 1.81. A decade ago, Austin’s tech industries LQ was 1.73. Over that period, Austin has also steadily increased its share of all U.S. jobs in tech industries from 1.0% in 2011 to 1.4% in 2021.

New industry data through the final quarter of 2021 was recently released by the Texas Workforce Commission (TWC) and the U.S. Bureau of Labor Statistics (BLS). The Quarterly Census of Employment and Wages (QCEW) produces much finer industry detail than the monthly Current Employment Statistics program and allows users to examine distinct and narrow sectors like computer systems design or scientific R&D at the metro or even the county level. Since Austin is one of the most technology intensive metro economies in the U.S., we regularly examine new releases of QCEW to quantify the character and trends of Austin’s tech sector. To simplify the data for this look at the composition and current trends of Austin’s tech sector, this article aggregates individual tech industries into several groupings—manufacturing; energy; trade; information and other IT; and engineering, R&D, labs/testing and other.[1]

There are 9,565 high tech employer firms in Austin. The number of tech firms grew by 1,226 or 14.7% in 2021. Total firms in Austin number 59,694 in 2021, up 4,705 or 8.6% over 2020. Over the last five years, the number of firms has grown 47.4% in tech industries compared to 29.2% overall. Tech firms account for 16.0% of all firms in 2021, up from 14.0% five years ago and 13.2% ten years ago. Among Austin's tech firms, 5.3% (509) are manufacturers and 94.7% (9,056) are in nonmanufacturing industries.

Tech payrolls in 2021 totaled $27.6 billion, or 31.9% of the Austin metro’s total payroll of $86.5 billion. Total payroll growth in 2021 was 16.4%, while the gain for tech industries was 14.6%. Tech payrolls have an edge over the last five years, gaining 81% compared to all payrolls gain of 58%. Over the last decade, tech payrolls are up 141% compared to 119% for all payrolls.

For all industries, the average annual salary in Austin is $78,224, up 8.5% from 2020, while the average salary for tech jobs is $150,026, up 9.8%.

Since 2016, the all-industries average annual salary is up 36.6% and the average tech salary is up 40.5%. Over the last decade, the average salary is up 54.8% overall and 52.0% for in the tech sector. In 2006, before the Great Recession, the average tech salary was 200% of the average salary. The average tech salary registered a post-dot-com recession low of 185% of the all-industries salary in 2014, attained 194% in 2019, and is at 192% in 2021.

Austin’s tech employment is 21.9% in manufacturing industries (40,376 jobs) and 78.1% in nonmanufacturing industries (143,801 jobs). Jobs in tech manufacturing gained 2.7% in 2021 while nonmanufacturing tech jobs gained 4.8%.

Manufacturing’s share of Austin’s tech jobs has declined significantly over the long term. Before the Great Recession, manufacturing accounted for over a third of Austin’s tech jobs and before the dot-com recession, the share was over half. Tech’s share of all manufacturing jobs in Austin is 62.8% in 2021, down from 63.4% in 2020. Tech’s share of all manufacturing has averaged 63% since the dot-com recession, but in the decade preceding, the share was about 69%. Nationally, tech’s share of manufacturing jobs is 26.9% in 2021.

Computer and electronic product makers (219 firms) dominate Austin’s tech manufacturing jobs (28,389 or 70.3%). Of those jobs, 14,357 are in semiconductor and electronic components and 8,814 jobs are in computers and peripheral equipment. Pharmaceuticals and medicines manufacturing employs 2,330 and medical equipment and supplies manufacturing employs 1,623.

Austin has an LQ of 1.6 for the collection of industries making up tech manufacturing, meaning that Austin employs workers in the sector at over one-and-a-half times the national rate. Austin’s computer and electronics manufacturing industry employs workers at over 3.5 times the national rate. However, within that industry grouping, computer and peripheral equipment manufacturing has an LQ of 7.4 and semiconductor manufacturing has an LQ of 5.1.

Salaries are higher in tech manufacturing, $159,593, compared to the average of $147,340 in nonmanufacturing tech industries. In Austin’s tech sector, manufacturing salaries have gained 30.8% over the last five years, while the nonmanufacturing average has risen 44.6%. Over the same period, the average salary for all industries rose 36.6%. Over the last year, salaries in tech manufacturing rose 9.2% and tech nonmanufacturing gained 10.1%.

Nonmanufacturing tech industries include subsectors of trade, information, professional and business services, and education and healthcare.

The tech portions of the information industry include software publishers (478 Austin firms); motion picture and sound recording, excluding motion picture exhibition (331); telecommunications (137); data processing, hosting and related services (371); and internet publishing, broadcast and web portals (263). Other information technology (IT)-related industries include computer systems design and related services (4,025 firms) in the professional and business services sector and computer training (53) in the education sector.

Combined, “tech information and other IT” accounts for 5,657 firms and 84,674 jobs in Austin in 2021. Jobs in this group of industries are up 15.3% (11,216) over the last year, dominating the net jobs added (6,591) by nonmanufacturing tech industries in 2021. Computer systems design and related services employs 48,211 and grew by 17.7%, or 7,248 jobs, in 2021. The smaller software publishing industry (9,534 jobs) saw the fastest growth, 23.7% or 1,829 jobs.

Austin has an LQ of 2.4 for the group of industries we’re calling tech information and other IT, meaning that Austin employs workers in the sector at more than two times the national rate. Data processing/hosting is the sector with the largest LQ (3.1) in this grouping.

The average annual salary in tech information and other IT was $158,178 in 2021, with data processing/hosting and software publishers being the best compensated industries ($183,787 and $168,564 respectively). Average salary increased 15.2% in 2021. The industry group gained 45.3% over the last five years, compared to 36.6% for all industries.

Historically, after computer systems design and related services, the next largest nonmanufacturing tech industry in Austin has been computer/computer peripherals and software merchant wholesalers. In 2020, this industry represented 168 firms and 20,737 jobs in Austin. In 2021, there are 176 firms, but employment fell to 12,587.[2] This industry, together with medical equipment merchant wholesalers, business-to-business electronic markets, and electronic shopping and mail-order houses represents 894 firms and 20,522 jobs in Austin’s tech wholesale and retail trade industries in 2021. The average annual salary is $135,767 in 2021, down 1.0% from 2020.

Because of the 2021 drop in computer/computer peripherals and software merchant wholesalers employment, Austin has 14.5% fewer tech trade jobs in 2021 than it had in 2011, while jobs in the sector nationally are up by 39.9%. The driver of job growth nationally has been electronic shopping and mail-order houses. This industry has grown 80.8% over the decade, while computer and software merchant wholesaler jobs have decreased 0.6%. As of 2021, electronic shopping and mail-order accounts for 46.9% of tech trade jobs nationally. In Austin, electronic shopping and mail-order represents only 26.7% jobs in the grouping, but growth over the decade is 317%.

Austin remains concentrated in tech trade. Austin has nearly three times the national concentration of jobs in this group and has an LQ of 7.5 in computer and software merchant wholesaling.

Tech energy (oil and gas extraction and electric power generation, transmission and distribution) is the smallest tech grouping in Austin with 120 firms employing 6,049 in 2021. Oil and gas extraction presently only accounts for 1,010 jobs, and growth has been slower than average—negative over the last year, the last five years, and the last decade. Oil and gas’ average annual salary, $384,379, is the highest within tech and also across all industries in Austin in 2021.

Architectural and engineering services (1,418 firms), environmental consulting services (105), other scientific and technical services (351), scientific R&D services (301), medical and diagnostic laboratories (93), electronic and precision equipment repair and maintenance (114), and national security and international affairs (4) round out the remainder of the tech sector. This grouping employed 32,557 in 2021, up 8.2% from 2020 and up 30.5% since 2016. Architectural and engineering services employs 18,847 of the total, while scientific R&D employs 5,187. Austin’s LQ for this grouping we're calling "engineering, R&D, labs/testing and other services" is 1.1. Perhaps not surprising given the concentration of tech manufacturing in Austin, electronic and precision equipment and repair has the highest LQ (2.2) within the grouping.

An Excel file of TWC data for Austin MSA establishments, firms, employment, payrolls, and average salary data for 1990-2021 for all of the high tech industry classifications referenced above, plus data for other major industry is here. The file opens on an extract of the Austin data for tech industries as employed in this article. The second tab in the file contains national employment data from the BLS for 2009-2021 for tech industries. The third tab in the file contains Austin location quotients for tech industries. The last tab in the file contains Austin MSA data for major industry sectors for reference. The data in the file is “total,” i.e., represents private and public employers.

FOOTNOTES:

1. QCEW estimates are derived primarily from the reporting of private business and government agencies under the unemployment insurance program. While all states produce similar data from the program, how much of the data different states publish in terms of industry detail, periods published, and geographic regions reported varies. TWC’s data begins in 1990. For Austin in 2021, estimates are published for over 1,350 industry classifications. The U.S. BLS also publishes a database of QCEW data for all U.S. counties, metros and states, however, the level of industry detail available at the local level is often more limited than desirable for estimating the tech sector, hence the omission of metro comparisons from this article. ↩
2. This 39.3% drop in employment in computer/computer peripherals and software merchant wholesalers is of course extraordinary. Probably, at least in part, the drop represents a revision of the industry classifications assigned to a subset of employers. While this dataset offers much in industry detail and other features, it is based on administrative records and TWC and BLS do not revise historical data to control for transitions such as a correction to a reporting entity’s industry classification. ↩