The Arizona tech industry is one of the largest and fastest-growing economic drivers for the state. Technology companies such as Axon, Carvana, and GoDaddy have all headquartered in Arizona, helping bring top-level tech talent into this new desert hub. The startup community continues to multiply due to the abundance of resources such as co-working spaces (like Galvanize and The Department), and an increase in available investment capital. Additionally, large universities such as Arizona State University and the University of Arizona provide companies with easy access to hiring entry-level tech talent. Bottom line—Arizona has proven itself a force to watch as it competes with the nation’s leading technology hubs.
*Source: Technology Impact Report Arizona Technology Council (Q1), Gregslist Phoenix
Arizona Hiring Jumps Despite Pandemic Challenges
The COVID-19 pandemic presented considerable challenges across the nation, but the tech industry in Arizona remained resilient. The latest quarterly report from the Arizona Technology Council, the Technology Industry Impact Report, reveals demand for hiring with 3.45 percent growth in technology sector employment.
“While some companies are experiencing a downturn in business due to the disruptions caused by the COVID-19 pandemic, Arizona’s technology sector has become well-diversified,” said Steve Zylstra, president and CEO of the Arizona Technology Council. “This will allow the technology industry sector to remain resilient and recover quickly. Most manufacturers have continued to operate all through the pandemic. Most other technology companies pivoted quickly and successfully to working from home.”
Key Advantages that Attribute to Arizona’s Resiliency
Arizona’s continued growth only confirms the strength of the state’s positive momentum before the pandemic. Multiple factors contribute to this success and continue to slingshot Arizona as a prominent player in the tech industry.
As businesses adjusted to rapid change brought on by the pandemic, the demand for technology tools and services to empower telecommuting and e-commerce spiked. As a result, cybersecurity and systems engineers became the most sought-after professionals.
- Cybersecurity Engineers: Technical experts were in high demand as businesses moved to virtual and e-commerce, and the number of cyberattacks and scams increased.
- Systems Engineers: The prioritization of IT infrastructure and support became paramount as large numbers of employees began to work from home daily.
Vibrant Talent Pool
Arizona has shown remarkable success in recruiting tech companies such as Amazon, Gainsight, Opendoor, Waymo, and Yelp to the greater Phoenix metro area. This increased Phoenix’s awareness footprint among Millennials (the generation born between 1981 and 1997) as a desirable, career-friendly destination. Phoenix earned the No. 20 spot on CBRE’s Tech Talent Scorecard, part of its annual Scoring Tech Talent Report, which ranks 50 U.S. and Canadian markets according to their ability to attract and grow tech talent.
“As the Phoenix tech ecosystem continues to grow, tech companies will have an ample supply of talent to choose from given Phoenix’s fast-growing millennial population and a large supply of well-educated tech graduates being produced by Arizona’s higher education institutions like Arizona State University, the University of Arizona and Grand Canyon University,” said Kevin Calihan, Executive Vice President with CBRE.
Arizona Technology Council reported in their recent Technology Industry Impact Report that an impressive 29 percent of the tech graduates in Arizona stay within the local workforce after graduation. The perfect atmosphere has been created for job seekers and hiring organizations that show no signs of slowing.
Practical for Living and Doing Business
Arizona’s Phoenix-metro not only boasts diverse opportunities for recreation, entertainment, culture, dining, and shopping, but also for its affordable real estate and low cost of living (the rent-to-tech wage ratio is 15 percent). The average apartment’s rent for a year in 2019 was $13,242 ($1,104/month), and the average annual tech wage is $86,303. Compare that to the most expensive market, New York (Manhattan), NY, whose numbers are $49,445 ($4,120/month) and $113,500, (a rent-to-wage ratio of 43.6 percent) respectively.
|Phoenix, AZ||Manhattan, NY|
|Average Apartment Rent (Annual)||$13,242 ($1,104/month)||$49,445 ($4,120/month)|
|Average Tech Wage||$86,303||$113,500|
Venture Capital Acceleration
Arizona’s focus on economic acceleration is attractive to VCs and entrepreneurs. In just the past two years, Arizona has set records for venture dollars investing in Arizona-based tech startups. According to Crunchbase, $723 million in funding across 114 deals went to startups based in Arizona in 2019. The year previously (2018) set records as the highest dollar amount for the past decade, with $800 million in venture capital across 133 deals.
While VC investment deal numbers dropped in 2020 as COVID-19 set in and challenged the economy, bigger deals pushed the total deal value even higher than the first quarter. Notable investments include:
- Paradox Raises $40 Million Series B to Help Companies Embrace the Future of Work with Conversational AI
- AI Cyber Attack Prediction Platform CYR3CON Secures $8.2 Million Financing
- CampusLogic Raises $120 Million To Expand Its Student Financial Platform
Arizona’s Tech Hub Rocket Ship Has Taken Off
Arizona has taken the lead in several technology sectors, including autonomous and electric vehicles, edtech, fintech, and aerospace. There has never been more persuasive evidence that Arizona is racing to become one of the nation’s top technology hubs—and doing it despite the challenges of COVID-19. Arizona’s tech sector will be the first industry to recover from the pandemic and is ready for continued success as we approach 2021.
About the Author
Vince Dorazio has 20+ years of experience in the recruiting and tech industry. He is currently the Founder & CEO of UpRecruit, a recruiting platform that intelligently matches tech talent to innovative companies. He has a passion for the start-up community and serves as a mentor, advisor, and board member to multiple SaaS companies and non-profits.