Witnessing the Evolution of the Indiana Tech Industry

Witnessing the Evolution of the Indiana Tech Industry

Two decades ago, nobody would have guessed the manufacturing-centric state of Indiana would grow into a midwestern technology giant. Today, amazingly, it’s common to see “Silicon Valley of the Midwest” references associated with Indiana, though we haven’t officially been given the title yet.

Late last year, Indianapolis ranked fourth in the nation for technology job growth among all U.S. cities, according to data from the U.S. Department of Labor. The only cities that did better were San Francisco, CA, Charlotte, NC, and Pittsburgh, PA. This isn’t the first time that Indy has experienced major tech growth, either.

The technology sector accounted for about one-third of all the job commitments that were made from about the middle of last year through July of 2018. That figure beats out all other industries. (CBRE, U.S. Department of Labor)

For 2015-2016, the industry’s labor pool in central Indiana expanded by 27.8 percent. Before that, in 2013-2014, the industry’s employment grew by 25. 7 percent. During those periods, technology accounted for nearly half of all the new office jobs in the region, producing a corresponding boost in office real estate demand.

Overall, the technology sector accounted for about one-third of all the job commitments that were made from about the middle of last year through July of 2018. That figure beats out all other industries.

Let’s Talk Dollars

Job growth isn’t the only area in which tech saw major gains over the last few years. Investment has been huge. Last year saw technology investments and deals totaling $235,830,000 according to TechPoint, Indiana’s tech community accelerator. That’s aside from the economic impact of all the job growth; we’re just talking about venture capital here.

2017 saw technology investments and deals totaling $235,830,000. (TechPoint)

Excitingly, a substantial amount of all of this investment came from entities from all over the country, meaning that tech is pulling outside dollars toward Indiana. TechPoint reported that “the fourth quarter of 2017 finished the year strong with over $105 million in publicly announced investments and acquisitions involving Indiana tech and tech-enabled companies. This funding fueled a year rich with venture capital investments and acquisitions. $105,830,000 was pumped into Indiana tech companies from firms and investors located all throughout the country.”

Additionally, the organization noted that six company acquisitions took place in 2017 without publicly disclosing the transaction totals, so there are actually millions of additional dollars not factored in to these year-end numbers. Indiana tech companies made at least two acquisitions of their own as well, further adding to the figures.

2018 Industry Priorities

Recently, the inaugural Indianapolis Tech Census Report was published by Powderkeg, an organization with over 10,000 members that works to help high-growth tech ventures connect with resources they need to grow in areas beyond Silicon Valley. The report detailed the “maturation” of the tech industry in Indiana as it has evolved over the past few years and priorities industry responders have outlined for the coming year. In all, 138 companies participated in the census.

The responders described their number one priority for the coming months as being diversity and equality. They gave the tech community an average score of 4.4 for diversity and 6.3 for inclusivity, describing how the community has a lot of room for improvement in this area.

The community’s efforts in this regard will likely be an additional catalyst for growth over the coming years as cultural diversity has been well-documented as an effective economic development attribute.

Additional key findings from Powderkeg’s report include:

  • In 2017, over a third of respondents (34 percent) saw revenue growth of more than 100 percent and 20 percent reported revenue growth in excess of 200 percent.
  • Marketing and sales Saas (software-as-a-service) company respondents had the highest 2017 revenue growth rate, with 56 percent of companies reporting annual revenue growth over 100 percent.
  • The majority of workforce respondents (63 percent) reported annual salaries in excess of $75,000.
  • Indy’s developers are young. Eighty percent of developers surveyed are 35 or younger, while a third of developers are 21-25 years old. The majority of developers have been members of the Indy tech community for five years or less.
  • Two-thirds of investor respondents believe there will be more tech investment opportunities in central Indiana in the next 3 years and 83 percent plan to invest the same or more into local companies over this period.

Accelerating

All of the growth in Indiana’s tech industry over the last few years and the community’s willingness to become more diverse and inclusive points to nothing less than continued expansion. Supported by the state’s efforts to produce more of the talent the industry needs, it’s safe to say that we’re likely only looking at the early adolescence of technology in our state. There’s a lot of room to grow and a great opportunity for Indiana to remain a leader in this emerging endeavor. Definitely exciting times.

 


Indiana’s 10 Fastest-Growing Tech Companies
Ranked by growth rate

(Company, Industry)

  1. SupplyKick, Retail
  2. Fizziology, Advertising and Marketing
  3. SmartBox Web Marketing, Advertising and Marketing
  4. SmarterHQ, Software
  5. ClearObject, IT Services
  6. Formstack, Software
  7. The Mako Group, Security
  8. DoubleMap, Logistics and Transportation
  9. DeveloperTown, Software
  10. Hanapin Marketing, Business Products and Services

Source: Inc. 5000


 

Category Features, Tech Lab