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Detroit, Pittsburgh Boast Tech Economy Gains

April 03, 2014

Groups in the greater Detroit and Pittsburgh regions recently released reports documenting the progress these metros have made over the past few years in building thriving technology economies. Detroit’s Automation Alley found that tech industry employment in the region grew by 15 percent in 2011, outpacing growth in all of the other 14 regions used as benchmarks in the study. A report on Pittsburgh’s investment economy, conducted by Ernst & Young LLP and Innovation Works, shows the region to have grown its per capita venture capital investment levels by 34.6 percent during the 2009-2013 period.

Detroit ranks second only to Chicago in tech employment among Midwest cities, according to the Automation Alley report. The researchers estimate the region’s total number of technology jobs exceeds that of San Jose. Detroit’s concentration of tech employment in 2011, the percentage of all jobs that are focused on technology, was the highest in the Midwest. Many of these jobs are associated with the region’s automotive industry, which remains the largest in the country. About 9.7 percent of all advanced automotive employment in the U.S. remains in the greater Detroit region, according to the report. The growth of advanced automotive employment, as well as life sciences jobs, fueled an increase in tech employment twice the national rate in 2011.

The report also notes several encouraging trends in the region’s highly skilled workforce. Among Midwest cities, Detroit ranks second to Pittsburgh in the number of residents with STEM degrees and second to Chicago in STEM degree completions. Detroit leads the country in engineering and engineering technology degree completions, according to the report.

Read the Automation Alley Technology Industry Outlook

In a similarly encouraging report, Innovation Works finds that Pittsburgh is having a great deal of success in translating its manufacturing roots into a high-tech economy supported by investment capital. Fueled by research and companies coming out of the region’s universities, Pittsburgh has increased its venture investment dollars by 113 percent since 2009. The report includes data on 18 benchmark regions for venture capital investment between 2009 and 2013. Within that period, Pittsburgh rose from 12th to 8th place in venture dollars, joining the rank of the nation’s second-tier venture capital hotspots. Pittsburgh ranked third in 2013 among its peer metros, after Boston and Austin, in venture deals per capita.

In addition to its research universities, the report links Pittsburgh’s success in attracting venture investment to the industrial diversity of its tech economy. While many regions with strong venture activity have a close association with a single sector, such as life sciences, Pittsburgh has been successful in attracting the attention of outside investors in a variety of industries and in building local capital resources for individual clusters. Between 2009 and 2013, medical device companies received more venture dollars than any other industry. However, the medical device sector represented only 17 percent of total dollars. Investment was nearly as high in Electronics, Enterprise Software and Energy. The report suggests that these trends should continue to drive growth in the local tech economy.

Read Building Momentum: Investing in Pittsburgh’s Technology Sector, Trends and Highlights, 2009-2013

Michigan, Pennsylvaniastats, metrics, stem, metros