How has Pittsburgh’s tech economy changed over 3 years? Fewer workers, higher wages

This fall, the North Side-based tech trade association Pittsburgh Tech Council released its annual State of the Industry report, produced in partnership with PricewaterhouseCoopers, detailing trends in local tech for three years ending in 2021.

Focusing on information technology, life sciences, advanced manufacturing, advanced materials, environmental technology and energy technology as the six main industry clusters, the report examines job growth, average wages and number of establishments, plus other markers of economic success.

The 2022 results are a double-edged sword of sorts: After examining the data from 13 counties in the region, the Council found that on the one hand, wages have increased, but on the other, there remains an issue of a shrinking workforce.

Some other significant stats from the 2022 report, compared to the 2021 report:

• The Pittsburgh region has 11,258 technology establishments employing over 295,000, versus 10,229 technology establishments employing over 305,000 people at the previous count. In the most recent three years, that translates to 24% of the area’s overall workforce.
• The life sciences again had a strong showing, with the number of establishments (487), employment count (19,700), total annual payroll ($2.17 billion) and average wages ($109,623) up over the past three years. Health sciences saw growth, too, with establishments (3,059), payroll ($8.23 billion) and wages ($79,197) all up; employment saw a 5.6% dip.
• R&D expenditures at local universities rose to $1.7 billion as of 2020 — the most recent year with complete data in that category — representing a 10.6% increase over three years.
• The number of graduate students in science, engineering and health fields decreased from 12,268 in 2018 to 11,303 in 2020. A whopping 76% of them represent two schools: Carnegie Mellon University and the University of Pittsburgh.

The Council’s VP of communications and media, Jonathan Kersting, told Technical.ly that although there are issues in the region that need to be addressed, there’s more cause for optimism than concern based on the report’s findings.

Kersting noted that it’s promising that industries in the city are still managing to get things done, even if they don’t have as many workers as they’d like. He highlighted the report’s findings about the IT field, namely that it had employed more than 29,700 workers (albeit down from 30,900 in 2019) and paid them an average annual wage of $128,642 in 2021, up from the $103,846 average that was found in 2019.

The number of employees in the IT field represents a 3.8% decline. Pointing to national labor shortages, Kersting said that’s not unique to the field or even to the region as a whole. (Note, too, the Great Resignation led by mid-career tech workers.)

“Everyone’s looking for talent, around the world,” Kersting said. “So this is more showing how IT and technology in general is just hungry for talent, wherever and however they can get it — and when they get people, they’re paying very well.”

IT and technology in general is just hungry for talent, wherever and however they can get it — and when they get people, they're paying very well.

One ongoing cause for concern is Pittsburgh’s longstanding problem with inequality. A 2019 report conducted by the City of Pittsburgh’s Gender Equity Commission found that Black residents would have better health outcomes and employment prospects by leaving the city. These conditions, Pittsburgh Technology Council CEO and President Audrey Russo wrote in in her introductory letter of her org’s report, has led to an “exodus” among the city’s Black population.

“It’s something Pittsburgh needs to improve on. I know there are leaders and stakeholders that want to jump on that and at the Tech Council specifically this is what keeps her, our CEO, up at night,” Kersting said. “Can we ensure Pittsburgh as a place where every single person can get accounted for and matter?”

Why does that matter for the tech industry, especially? For one, it’s among the most lucrative for those employed within it. Less diversity means less wealth going to historically underrepresented groups,

On the upside, though, was the finding that there’d been a more than 15% increase in the total companies in this area, compared to 2021. What makes Pittsburgh so appealing to the companies based here? Kersting pointed to a desire for community.

“I think many companies are looking for quality of life so they can attract talent, and so they want to make sure that if they’re going to get talent to come here, that we can maintain them,” Kersting said. “They realize that to attract talent from around the world, they’ve got to feel at home in Pittsburgh and they’ve got to feel like they’re part of a community.”