Oregon hasn’t produced a major homegrown technology employer in decades. The state has missed out on a string of new chip factories now planned elsewhere in the country.
And yet, Oregon tech jobs are surging and have finally surpassed the high-water mark set in the heyday of the dot-com boom, according to a new analysis by Josh Lehner at the Oregon Office of Economic Analysis.
Oregon’s robust growth reflects two factors, Lehner found: A decade of steady expansion in software employment and a burst of hiring in the semiconductor industry. Oregon chipmaking jobs grew by 14% in just the last year.
“It’s crazy. It’s unbelievable,” Lehner said, to see the chip sector grow so quickly after 20 years of flat or modest hiring. Oregon’s concentration of chip jobs is seven times higher than the national average.
Intel has just completed a $3 billion expansion of its D1X research factory in Hillsboro, and several other Oregon tech manufacturers found ways to boost capacity without building brand-new factories. Scrambling to staff those expanded facilities, employers took to the airwaves to recruit technicians and began hiring workers even before they finished school.
While the worker shortage persists, Oregon’s semiconductor industry added 4,000 jobs in the past year. Lehner said that’s equivalent to the direct employment that would come from two of the brand-new chip factories being built in Arizona, Texas, Ohio and New York.
Tech jobs, broadly speaking, encompass both computer hardware and software. Electronics design and manufacturing provided most Oregon tech employment until a decade ago, when software began taking off. Software jobs now make up a majority of the state’s tech industry and the bulk of its growth since the Great Recession.
Though Oregon’s technology sector is overshadowed by the major innovation hubs in Seattle and the Bay Area, the industry has long been among Oregon’s most vital. It now accounts for 109,000 jobs and approximately half of all the state’s exports.
Crucially, Oregon tech jobs pay $126,000 annually on average – nearly double the average across all jobs statewide.
What’s intriguing is that Oregon tech is thriving even though the state doesn’t have a single major technology company based here.
Many of the state’s biggest tech employers – among them Mentor Graphics, Tektronix, FEI Co. and Flir – sold to larger companies based elsewhere in the years since the dot-com bubble. And no major Oregon-based employer has emerged to replace them.
Instead, the state has thrived as an outpost economy. That’s an enduring trend that appears to have accelerated recently. Lehner said the number of Oregon technology “business units” – a category that includes individual companies as well as divisions of a larger corporation’s operations – doubled in the past decade.
“We’re seeing growth, and actually quite a bit of it, in the number of companies, the number of business units, but without a recognizable superstar that employs a lot of people,” Lehner said.
In the absence of big, local tech companies, or a major venture capital firm, Oregon has benefitted from business incubators, collaborative associations and investment funds, according to Kristin Hammond, a senior vice president in the Portland office of commercial real estate firm CBRE.
“There’s been a lot of investment by the business community over the past decade that’s still paying off,” Hammond said. She highlighted the Oregon Venture Fund, Rogue Venture Partners and the Technology Association of Oregon.
“They’re still doing a really great job of building a culture for the tech (companies) to network with each other,” Hammond said.
Oregon tech employment plunged after the dot-com bust and again during the Great Recession. With inflation soaring, the war in Ukraine and intermittent COVID-19 lockdowns in China, economists fear another downturn could be on the horizon.
Intel, the state’s largest corporate employer, ordered a hiring freeze in its software group last month and ordered a slowdown in adding jobs in other fields, too. CEO Pat Gelsinger said the company needed to position itself to weather “broader macroeconomic uncertainty.”
The global chip shortage remains acute, though, constraining production of autos, appliances, PCs, smartphones and other tech gadgets. Oregon-made semiconductors play crucial roles in all those in-demand products
The shift to remote work could further undermine growth in Oregon technology employment.
Portland outposts are conveniently located close to corporate headquarters in Seattle or Silicon Valley, but if few people work in offices, then remote workers could be nearly anywhere – including many more affordable parts of the U.S.
“Does that mean some of that growth will go even farther afield? I think you could make the case that it might,” Lehner said. He said that smaller western metros with lower housing prices might look increasingly attractive to software developers.
To Hammond, though, Portland remains attractive because it’s still cheaper than other West Coast cities and because it offers unique lifestyle amenities in the outdoors and distinct cultural attractions.
“I see there being upside,” Hammond said. “It might go a little bit slower than in the past five years, but I would argue that’s probably going to be the case for most markets.”
This is Oregon Insight, The Oregonian’s weekly look at the numbers behind the state’s economy. View past installments here.
-- Mike Rogoway | email@example.com | Twitter: @rogoway | 503-294-7699