Phoenix Punches Above its Weight in Tech Sector with 46,400 Internet Jobs

Article originally posted on Phoenix Business Journal on February 6, 2018

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A new report highlights Phoenix as a city that punches above its weight in the tech sector with 46,400 internet jobs and 2,900 internet businesses.

The report released today by Washington D.C.-based Internet Association and National League of Cities details the size and impact of the internet sector on cities throughout the U.S.

Phoenix was highlighted among four cities as a case study city, including Columbus, Ohio; Kansas City, Missouri; and Pittsburgh.

The study cited Arizona’s emphasis on innovation to keep technology and innovation front and center, including Uber’s self-driving car pilot in Tempelaunched last year and Gov. Doug Ducey’s 2015 executive order supporting the testing and operation of self-driving cars in the state.

“Phoenix leads the nation in its commitment to technology and innovation thanks to smart policy at the city and state levels,” said Christopher Hooton, chief economist for Internet Association. “The area has opened up its data for broader use, embraces new technologies, and is the place to be for autonomous vehicle testing.”

The purpose of the report is to highlight and draw lessons from cities actively pursuing a greater integration of technology into their economies, environments, and policy making. The report looks at ‘up-and-coming’ tech cities rather than more established hubs.

Here are the stats provided for the Phoenix area in the report:

  • Total employment – 1,574,000
  • Internet sector employment – 46,400
  • Internet sector employment as a percentage total – 2.9 percent
  • Total businesses – 90,900
  • Internet establishments – 2,900
  • Internet establishments as a percentage total – 3.2 percent
  • Ratio of internet sector employment to national average – 5.13
  • Ratio of internet sector establishments to national average – 5.23
  • Rank among MSAs (Metropolitan Statistical Areas) – internet establishments – 18
  • Rank among MSAs – internet employment – 17
  • Rank among MSAs – population – 13
  • Phoenix is the fifth largest city in the U.S.
  • Between 2006-2016, the area increased its number of tech workers by nearly 50 percent.
  • The number of tech companies located in downtown Phoenix has quadrupled over the past five years from 67 to more than 275.

“Each of the case studies are in the beginning stages of a positive tech-driven urban revitalization and offer precisely that type of perspective,” according to the report.

  • The internet sector contributes an average 3.3 percent of total jobs and total number of businesses in America’s urban areas.
  • Cities with stronger internet economies are more likely to have lower unemployment and poverty levels.
  • An urban area’s median income level and GDP per capita correspond to the strength of its internet sector.

Based on the report’s case studies, it finds the following specific areas of application for city leaders and stakeholders:

  • Transportation systems are critical infrastructure and can greatly and quickly benefit from new technologies.
  • Open data systems provide win-win opportunities to cities and their citizens; businesses can utilize the data to improve products, services and efficiency while governments can gain important insights on services and constituents.
  • Fast pilot projects in procurement systems allow for more rapid development of innovative city services while minimizing the risk from larger scale implementations.
  • Partnerships are key to achieving policy goals. Governments can often draw on the technical expertise of the private sector while companies can draw on the vision and policy expertise of local leaders to find solutions that help both parties involved.

“Every single community in America benefits from the internet, and its importance to Americans in all cities will only continue to grow,” said Michael Beckerman, Internet Association’s president and CEO, in a statement. “Smart policy making at all levels of government – especially from cities – is essential to ensure the internet economy continues to grow and succeed in the 21st century.”