Portland high-tech is surging
PORTLAND — Oregon tech employment grew at its fastest rate in a decade last year, according to a new state report that finds those jobs pay unusually well and have an outsized impact on the economy.
"High tech is certainly an important and growing sector in our economy," said Josh Lehner of the Oregon Office of Economic Analysis, author of the new report. "It drives a lot of growth and vitality, certainly in the Portland metropolitan area."
Oregon had just over 95,000 tech workers in 2015, according to state jobs data, up 4 percent from the prior year. Tech jobs paid an average of nearly $104,000 a year, more than twice the state average.
Casting a shadow over that growth are layoffs at Intel this week, putting 784 Oregon employees out of work as the chipmaker begins to remake itself for the post-PC era. Intel plans to eliminate hundreds more jobs through buyouts, early retirement packages and project cancellations.
Intel says it plans to reduce its workforce by 12,000 jobs throughout the company by the middle of 2017. If those cutbacks are applied evenly across the business, that would cost Oregon — Intel's largest site — more than 2,000 jobs of the 19,500 the company currently employs in Washington County.
"If we are going to get to that 2,000," Lehner said, "then we're talking about something that's no doubt a setback."
The Silicon Forest, rooted in electronics manufacturing, is undergoing a broad transition toward software. One embodiment of the change is the arrival of New Relic, a San Francisco software analytics company that employs 300 people in the U.S. Bancorp Tower ("Big Pink") in downtown Portland. It opened its Portland outpost during the Great Recession, when the regional tech economy was faltering and before the city had become a destination for software developers.
"There were pockets of talent in and around town. When we started, the opportunities in Portland were a little more limited than what they are today," said Jim Gochee, New Relic's chief product officer.
Gradually, though, software developers began to coalesce at a handful of well-funded startups and at outposts like New Relic's. Portland's emerging reputation as a relatively affordable city overflowing with microbrews, food carts and bike routes is helping draw workers and companies to Portland from other states.
And Gochee said the growth in Portland tech is feeding on itself as technologists and executives in other regions — Seattle and the Bay Area, especially — view Oregon as offering a range of possibilities for coders and executives who want to build a career here.
"That opens up to a whole new category of person who maybe wouldn't have moved here six or seven years ago," Gochee said. "Now it seems like there's plenty of opportunity in Portland."
Portland still doesn't have a single large tech company of its own. The city is dominated by satellite offices like New Relic's, which outnumber homegrown tech employers. That's a "risk to the future," in Lehner's view, because tech outposts have historically proven less durable than corporate headquarters during tough economic times.
Venture dollars invested in Oregon companies have been steadily rising for several years, though, as investors warm to startups like Zapproved, a legal services company that moved last year from Hillsboro to the Pearl District. Zapproved raised $15 million last year as Oregon venture activity grew 20 percent to $226 million.
Zapproved chief executive Monica Enand said the rise of cloud computing has unseated large corporations like Oracle and IBM, giving young companies like hers a chance to jump in with newer products.
"That means startups have a huge opportunity and level playing field that they've never had before," Enand said. For a state like Oregon, with no big tech companies of its own, she said that's a big plus.
The growth in Portland tech has come with strains, however.
Nearly all the tech expansion has been in Multnomah County, according to the state data, leaving out rural areas and even some of Portland's suburbs. That concentration of highly paid tech workers is one factor pushing up housing costs in the city, though the effect isn't nearly so profound as in San Francisco or Seattle.
Indeed, Enand said Oregon's affordability remains one of its key advantages. She said investors get a bigger return on their dollar in Portland, and employees know their money goes further here.
"This is the most affordable city on the West Coast," Enand said. "I get calls all the time saying they want to move."
As tech grows and more big companies move into town, wages keep going up. Enand acknowledged that puts pressure on young companies like hers — but she said if Zapproved succeeds in its market, it will be able to afford those higher costs and keep hiring the workers it wants.
"As long as we move fast enough then the growth outweighs the pressures," she said. "Time is of the essence."
A former Intel manager, Enand said that company's layoffs will obviously be painful for the workers who lose their jobs. Even with the growth in Oregon tech, some people working in especially technical jobs may have trouble finding comparable positions elsewhere.
But Enand said Intel's restructuring does present an opportunity to bring experienced technology workers from Washington County into Portland's fast-growing tech ecosystem. Oregon suffers from having "two different tech sectors, 10 miles apart from each other," she said.
"In my honest opinion they're just fat, dumb and happy out in Hillsboro," Enand said. She said Intel is filled with talented employees, but they've grown too comfortable out on Highway 26: "They need to engage in our community."