Las Vegas lags behind the rest of the West when it comes to technology jobs, but the trend is headed in the right direction and there’s prospects for growth ahead.
That’s the finding of the Southern Nevada Technology Industry Outlook prepared by Applied Analysis on behalf of the Las Vegas Global Economic Alliance and outlined by Applied Analysis Principal Jeremy Aguero.
“We’ve made progress relative to technology and technology-related industries, but we need to do more going forward,” Aguero said. “The outlook is positive from an economic standpoint, and this is the opportunity we can leverage the strength of this community to grow for another 20 years into our future. We’ve made pretty good inroads but we need to close the gap or we’re going to fall behind. If you look at where we rank among major Western metropolitan areas, we continue to be relatively low (in tech employment and occupations). If you look at employment share, we continue to be low. There is a great deal of room for us to move up.”
The report said Nevada is projected to have the second-fastest rate of tech job growth in the nation at 20.4 percent through 2026, behind only Utah with 21.8 percent. South Carolina is a distant third at 14.2 percent.
The Las Vegas metro area is projected to have the third-fastest rate of growth among major cities in the U.S. at 16.9 percent, only behind Austin at 20.2 percent and Salt Lake City at 18.6 percent, according to statistics from CompTIA.
The Nevada Department of Employment, Training and Rehabilitation and CompTIA, said Southern Nevada will expand its technology employment base by 5,000 positions by 2026.
“While it would be unrealistic to expect Southern Nevada to transform into the next Silicon Valley anytime soon, the region has established an environment where technology companies have the potential to thrive and where overall economic development is creating a robust market for technology workers in all industries,” Aguero said. “Shoring up this segment of the economy will be no small task. It requires a coordinated effort and specific strategies to remain competitive.”
Las Vegas benefited from the 2004 relocation of Zappos, the online retailer, that was founded in San Francisco in 1999.
Las Vegas is home to Amazon building distribution centers, Switch and its data center and will soon be home to Google, which is building a $600-million data center in Henderson with the help of $25 million in state tax incentives. It will serve billions of users around the world and employ at least 50 people, who will earn an average yearly salary of $65,000.
“We have a technology opportunity in autonomous vehicles, aerospace, artificial intelligence, internet, data storage, logistics and manufacturing and telemedicine. (These are) are the elements that will allow us to leverage things we have done and grow into 2020. It’s a huge pathway to allow students to have the jobs of the future.”
The growth in technology jobs is much-needed closure of the current gap Southern Nevada faces with a ranking as the 37th largest tech employment, contributor, CompTIA said. Tech employment in Las Vegas went from 2.4 percent of jobs in 2015 to 3.1 percent in 2019.
During the last five years, Southern Nevada has done that based on jobs numbers from the U.S. Bureau of Labor Statistics. Companies with defined technology classifications reported employment growth rising from 21,700 jobs in 2015 to 31,600 — a gain of 45.6 percent or 9,900 jobs. Nevada is fourth in tech employment growth between 2010 and 2018, Aguero said.
“We started from a low base, but we’re making substantial progress,” Aguero said. “Overall, employment growth during that time was 13.1 percent. This sector is growing faster than almost any other sector that we have. Wage growth is somewhat lower but we see it has been growing more than other areas as we are working hard to narrow that gap of where we are, have been and where we ultimately need to go.”
Worker wages for these tech companies reported a similar upward trend, jumping 59.3 percent from $1.6 billion in 2015 to $2.6 billion in 2019. It grew 30 percent for all industries, Aguero said.
“Thirty percent is not bad, but the tech sector has been able to outstrip that and continue to grow,” Aguero said. “The reason is there’s such a demand for these employees. The average tech sector employee makes $82,600 a year, and by comparison our average wage in Southern Nevada is below $51,000. This creates opportunity not only in terms of new jobs we want to have here but building wealth within our community.”
Las Vegas has about 16,000 other technology workers who are employed by non-technology companies classified in a number of industries. For example, MGM Resorts International employs technology staff responsible for managing customer databases, developing web technologies or operating a complex web of servers, slot machines and software, the report said.
Overall, the tech industry’s direct impacts include 47,400 employees earning a total of $3.6 billion in salaries and wages and supporting $9.1 billion in estimated economic activity in 2019, the report said.
The industry’s direct employment of 47,400 is comparable to the total employment in the transportation, warehousing and utilities industries in Southern Nevada, the report said.
Since 2015, total technology-related employment has grown by 29.6 percent, personal incomes sourced to the industry grew by 38.5 percent and economic activity jumped by 24.8 percent, the report said.
“One could easily come to the conclusion that nearly all of Southern Nevada’s $112 billion of gross regional output is attributable to, if not dependent upon technology,” the report said.
The report said the combination of technology industry companies and technology workers employed in other sectors of the economy directly account for about 7 percent of the total economic activity in Southern Nevada, or $9.1 billion annually. The national technology industry accounts for about 10 percent, the report said.
The rate of job growth for Southern Nevada’s tech industry was nearly triple the regional growth rate of 13.1 percent for all industries over the same period and is six times the national employment growth rate of 7.5 percent, according to the report.
None of that is possible without the addition of tech companies that have grown 16.2 percent between 2015 and 2019, the report said. There are 3,500 companies, which is 6.2 percent of the economy, Aguero said.
“If we compare that against Denver, Seattle and San Francisco, Phoenix and San Jose, we are below our competitors,” Aguero said. “It’s not that we’re not doing a good job, growing and expanding. When you look at the investment Switch is making in our community — the most important startup we have had in the past two decades — and look at Amazon and investments they are making, we are continuing to move forward.”
The fastest job growth was software publishers at 55 percent or 405 jobs. Computer system design services added the most jobs at 614. No. 2 on the job growth list is with computer training companies at 47.6 percent. Its employment concentration is two-and-a-half times the U.S. average. Computer programming services added the second most jobs at 422.
The Workforce Blueprint 2.0 released by the LVGEA in the fall said emerging technology jobs would grow by 29 percent or 2,681 jobs by 2026.
“Understanding how technology has impacted the Silver State is a foundational consideration when trying to quantifying the economic impacts in Southern Nevada,” the report said. “Nevada has done a remarkable job of embracing new technologies and opening new markets.”
In 2013, Nevada was named by the Federal Aviation Administration as one of six locations authorized to test unmanned aerial vehicles. Afterward, the state created the Nevada Institute for Autonomous Systems, which is teaming with dozens of companies to develop technologies ranging from infrastructure inspection and package delivery to advanced military command and control systems, the report said.
In 2017, the Nevada Legislature passed Assembly Bill 69 that allowed the testing and operation of autonomous vehicles on Nevada roads — operate commercially without a human driver. It was viewed as the most progressive legislation of its kind in the nation and subsequent regulations made Nevada the first in the world to have a regulatory framework for using self-driving vehicles to transport people and goods.
One of those companies is Aptiv, which develops and utilizes new software and hardware to make advances in the autonomous vehicle industry. Aptiv is working in conjunction with Lyft to provide automated taxi rides to the public using the ride-sharing application.
WAY TO INCREASE TECH JOBS
The report gave recommendations to increase technology jobs from its 37th in the nation ranking.
It encouraged the state to be an early adopter and take risks, which it did and has helped with unmanned aerial systems, autonomous vehicles and data warehousing and infrastructure. Aguero said no one should be dissuaded by failures such as the Faraday Future car plant in North Las Vegas that never came to fruition.
The report cited how Nevada is home to nascent transportation technologies such as Virgin Hyperloop and The Boring Co.’s underground transit system. Both have the potential to change how people and goods are moved, the report said.
“These are companies we couldn’t imagine a decade ago,” Aguero said. “They are here because of the choices we have made not just for technology companies but all companies in Nevada.”
The presence of tech companies in these areas provide opportunities to not only grow existing business but to also identify and grow support industries and suppliers that are part of the tech industry as well, the report said.
“Local tech companies also signal to the industry and the world that Southern Nevada is not afraid of innovation, but rather, is a partner in progress,” Aguero said.
It encouraged the Southern Nevada hospital industry to leverage how technology plays a role in its resort operations. Chief technology officers, software developers and others should look to attract providers to the region.
The report calls for recruiting and retaining tech workers from computer programmers to audio-visual equipment technicians and other occupations in the tech industry require specialized training and experience.
Aguero said the average wage of people working in the tech industry — they’re higher than the average wage in Southern Nevada — but are much lower than other areas of the country. That means it will be difficult to attract and retain technology-related workers, he said.
“Southern Nevada has successfully expanded its tech workforce in recent years to meet the needs of a growing tech industry, and future growth in the industry will only go as far as the workforce can take it,” the report said. “While qualified tech workers can be, and are being, imported from out of state, meeting the future needs of the industry in Southern Nevada will require the ongoing identification, development and training of home-grown talent.”
To address that, the report said Nevada should consider adding coding in every classroom and continue to support training and education programs at the K-12, community college and university levels. Internship programs, technical academies and industry training programs will build on that as well, the report said.
It suggested establishing a tech association, which mirrors what is done in other markets. That will help expand the industry.
“Communities that are aggressive in attracting, developing and retaining technology-related investments and businesses will be better for it in the long run,” the report said.
Since the health care industry remains one of the fastest-growing segments of the economy, the report said telemedicine, which is expected to be a $130 billion global market by 2025, can offer opportunities for doctors to serve patients from outside of Nevada.
