Tech still a footnote in region’s economy

Houston’s dogged efforts to build a technology and innovation community made little progress in 2019, with the tech sector adding fewer than 1,000 jobs and making only a minor impact on the city’s economy, according to a study by a national tech industry advocacy group.

In its Cyberstates 2020 study, CompTIA found the Houston-The Woodlands-Sugar Land area added just 826 tech jobs in 2019. The region came in 12th in U.S. metropolitan markets in terms of overall employment rankings, but only 38th in terms of tech jobs added.

Tech accounts for just 5.4 percent of the goods and services produced in Houston’s economy, low compared to other cities, accord

ing to the study, which was release in late April.

The report, however, may not account for some tech jobs that are embedded in the area’s more traditional business sectors, including energy and healthcare. Tim Herbert, executive vice president for research and market intelligence at CompTIA, conceded that including those jobs in the report can be “one of the challenges” in painting a picture of tech in a market such as Houston.

“There is a lot of blurring of the lines across many industry sectors,” Herbert said. “A lot of these nontechnology companies are developing their own technologies.”

The latest study shows Houston with 235,802 technology jobs in 2019, compared to 234,976 in 2018. But Houston did better when viewed through a longer lens: From 2010 to 2019, the area added 25,904 tech jobs, a 12.3 percent increase.

The 2019 data is preliminary, CompTIA spokesperson Steven Ostrowski said, and will be updated with government statistics in the fall. The revision to 2018 numbers showed the region gained tech jobs from 2017-2018 rather than posting a loss, as suggested by preliminary data.

“We expected to see a large gain in the 227,000 jobs that were published in last year’s report, and we did see that growth,” Susan Davenport, senior vice president of economic development at the Greater Houston Partnership, said in a statement. “In fact, Houston saw the 13th-highest gain in jobs when you compare the two reports year-to-year — more than 8,000 jobs. We expect that increase to continue, even if it takes those numbers a little while to surface in official statistics.”

CompTIA, which offers certification programs for tech workers and conducts research into the sector nationally, found that Texas as a whole fared better. The state ranked second behind California in overall tech employment and in the number of sector jobs added last year, with an additional 27,466 new positions.

Dallas was the Texas city that did best in the study, adding 9,932 new tech jobs for a 2.8 percent increase in 2019, ranking seventh in net technology employment and sixth in new jobs added. In Dallas, a hub for telecommunications companies such as AT&T and technology manufacturing, tech accounts for 12.4 percent of the regional economy, giving it a rank of 14th among U.S. metro areas.

Austin, which is often thought of as Texas’ tech capital, lagged Dallas with 7,131 jobs added for a 4.5 percent increase last year, but ranked 10th in terms of net tech jobs added. Tech in Austin makes for a bigger chunk of that city’s economy at 23.8 percent, coming in fourth for economic impact rank.

Marc Nathan, who counsels startups in Austin but worked for three years with startups at the old Houston Technology Center, echoed CompTIA’s Herbert that Houston’s tech landscape may mask what’s going on.

“Oil and gas is an old industry, and it’s still involved in getting something out of the ground and making it useful,” Nathan said, even though those businesses may be hiring tech workers to improve their efficiencies.

“What a lot of people don’t realize is that technology actually means fewer jobs,” he said. “The whole point of tech is to automate things. Technology as a whole is designed to take away jobs.”

Although it’s not included in the report, Herbert shared some background data on technology-related job postings in Houston in 2019, supplied by Burning Glass Labor Insight. The 25 companies with the most tech job listings included nine in the energy industry, among them Baker Hughes, Halliburton, KBR, Shell and ExxonMobil. In total, the top 25 posted 8,575 tech-related job listings in 2019.

Houston has been aggressively seeking to nurture and build a technology community over the past few years. A collaboration between the city and Rice University is behind a drive to build an innovation district south of Midtown, centered around the old Sears building located there.

Construction continues even during the coronavirus lockdown to convert it into a hub for tech activities called the Ion.