Missoula’s tech firms on the rise; statewide industry grows despite pandemic
During the height of the pandemic, Montana's tech companies face a number of challenges, from a loss of sales to accessing capital, and the general fog of economic uncertainty.
But despite the impacts, the industry managed to grow 7 times faster than the statewide economy, generating nearly $3 billion in revenue. Firms in Missoula earned their share of the pie, with biotech emerging as one of the city's top industries.
“Biotech is hot in Missoula,” said Christina Henderson, the executive director of the Montana High Tech Business Alliance. “We have really fast growing companies in that space cropping up that are getting investments and growing quickly. Missoula is on the move for sure.”
Henderson, who has headed the alliance since its formation seven years ago, sees a bright future for Montana's growing tech industry. A recent survey of alliance members, conducted by the Bureau of Business and Economic Research at the University of Montana, supported her optimism.
Among this year's findings, the report found that alliance members pay an average annual wage of $73,100, which is 59% higher than the average earnings of a Montana worker. With the pandemic getting smaller in the rear-view mirror, alliance members expect to add 1,500 jobs this year and boost wages 5%.
That's slightly ahead of the 4.2% growth in earnings of all Montana workers.
“This year we saw large investments in biotech companies like Inimmune in Missoula, and major acquisitions of Ascent Vision Technologies in Bozeman,” said Henderson. “After a tough year, it’s encouraging that Montana’s tech sector continues to create high-paying jobs to support families, and keep our kids in the state after graduation.”
Despite the growth in wages and the opportunities embedded in the industry, challenges linger, especially in the state's tech beds of Missoula and Bozeman. The two cities claim some of the highest housing prices in the state, and that could hinder the industry's growth.
In Missoula, the median price of a home hit $406,000 in April, according to the Missoula Organization of Realtors. In Bozeman, the median price of a single family home was $707,000, according to the Bozeman Real Estate Group.
“One thing we're definitely hearing from business leaders in Missoula and across the state really has been the effect of housing costs on their workforce,” said Henderson. “They've really ramped up hiring again, but the skyrocketing cost of housing is really concerning.”
While housing costs threaten to slow economic growth, or make it hard to recruit and retain workers, access to child care also is a concern among alliance members, Henderson said. But access to capital still tops the list.
This year's report suggested that around 12% of Montana's tech companies found it harder to obtain capital in 2020. The previous year it was 9%.
“Access to capital jumped to the top of the list, and financial uncertainty,” Henderson said. “The Paycheck Protection Program dollars helped. The economy is kind of coming back, so the financial piece is less of a concern. Now we're looking at the other impacts of the pandemic and how it effects the workforce in particular.”
Henderson said that despite the challenges created by the pandemic, Montana's tech industry was able to shift gears, and do it quickly.
Another New Jersey firm – Tonix Pharmaceuticals Holding Corp. (TNXP) – set eyes on Montana and closed on 44 acres of land in Hamilton, where it plans to break ground on the new facility this year.
Added up and alliance members expect to make at least $164 million in capital expenditures at their Montana facilities this year. That's up from $133 million last year, according to the report.
“I see a lot of tech companies hiring a lot,” Henderson said. “Last year, we saw some layoffs when the pandemic first hit. But a lot of those same companies are hiring quickly for a lot of different roles, and it's really hard for companies to find enough people. Nearly every company is struggling to attract enough workers.”