Wednesday, January 23, 2013

Tech Boom Pittsburgh

Pittsburgh is a top-notch producer of different kinds of talent. Companies from all over the United States come to the campus of Carnegie Mellon University looking for superstar tech employees. Local employers also benefit from the supply pipeline. The glut of talent has suppressed wages. That advantage is eroding:

According to the latest salary survey from, an online technology careers site, Pittsburgh’s tech professionals saw their salaries rise 18.1 percent for 2012-2013 over 2011-2012.

The average salary for a Pittsburgh tech professional is now $76,207, according to the survey. The latest data from the Pittsburgh Regional Alliance, which covers 2010, puts the average earnings per job in the Pittsburgh region at $51,718. ...

... The salaries here might be the fastest growing, but they are still below some other areas of the country, which is one of the selling points for companies to set up shop here. If talent can be found, it can be cheaper than elsewhere and the cost of living here still affords people the chance to buy a house and live pretty well.

In Silicon Valley, the average tech professional salary is $101,278, according to the report. In Boston, the average salary is $94,742; in Los Angeles, $92,498; in Austin, Texas, $89,680; and in New York City, $89,669.

Given that Pittsburgh salaries are the fastest growing in the country, I figure demand is outstripping supply. But Pittsburgh tech firms have a long way to go before they can compete with the ones in those other cities listed for talent produced elsewhere. Regardless, safe to say that there is a shortage. Why pay more for workers than you have to pay?

Another data point is venture capital:

Venture capital investment across the region continued to climb steadily in 2012 with 79 deals that totaled $168.97 million, a 7.9% increase over 2011 when $156.53 million was raised and spread over 55 deals.

The news in Pittsburgh was a bright spot; nationally VC figures declined by 10 percent from the prior year. All figures are from the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association (NVCA), based on data from Thomson Reuters. ...

... The strongest showing in Pittsburgh was the life sciences and software sectors. More than 23 companies received funding in life sciences, predominantly medical device companies, and 19 software and IT services companies were funded. The number of software company deals last year is a sign of the region’s strength in this sector since software companies generally don’t require large infusions of cash, noted Terri Glueck of Innovation Works.

Emphasis added. Software companies need tech talent. If you are looking for a job, then move to Pittsburgh. This tech boom is a result of talent production. The Innovation Economy is converging. Salaries matter. CMU is a reliable pipeline that will curb costs for software companies, which in turn lessens the risk for venture capital.

In tech, Pittsburgh is a strong bet. Talent production anchors the regional economy. In terms of talent attraction, the worm is turning. Next stop, Seattle.

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