Unless you’ve been living under a rock for the past couple of years, you’ll know that we at tekMountain have long been touting Wilmington, NC, as the up-and-coming tech hub of the Southeast. We’re all about demonstrating the vital role that tekMountain plays in building the region’s innovation capacity and arguing for a region where life sciences are among the leading tech spaces native to the area.
We’re not a voice in the wilderness when it comes to Southeastern North Carolina. Just last summer, Forbes magazine ranked Wilmington #2 among the nation’s 10 best cities in which to start a business in 2015. Forbes cleverly remembered to mention a major component of any startup nursery — Wilmington’s now-legendary craft-beer boom — while focusing on Wilmington as a nearly unparalleled life-sciences startup ecosystem.
Now comes the North Carolina State of Technology 2017 Industry Report, adding beef to the buzz. This 2017 NCSTIR is the third in a series and presents the latest available statistics in North Carolina tech. If you’re an entrepreneur or investor, it’s worth checking out the key findings.
For this report, the technology sector is broken down into four sub-categories:
- Information technology, telecom, hardware, and software;
- Energy technology;
- Environmental technology; and
- Life sciences.
North Carolina has a concentration of some of the finest universities in the nation, institutions that attract and nurture entrepreneurship. So the number of startups can indicate the level of entrepreneurship interest within a state’s universities. According to the report, North Carolina had the seventh highest number of startups spin off from its universities in 2015, with 36 new companies established in a single year.
And for tech transfer, NC ranks 9th in the nation. North Carolina also ranks among the top 15 states in
- The average number of new entrepreneurs, and
- The percentage of women in the technology workforce.That’s right: North Carolina once again ranks as the #1 state in percentage of its tech workforce made up of women, a prodigious 36.3 percent.
What’s more, the Tar Heel State ranks first in the nation in Information-technology employment growth over the five-year period from 2010 to 2015. And that’s despite being among the top 15 states with the highest percentage of population without access to fixed broadband!
It gets better
Along comes the 2016 Kaufman Index: Startup Activity: State Trends, complementing some of NCSTIR’s findings. The Kauffman Index of Startup Activity is calculated based on three components: Rate of New Entrepreneurs, Opportunity Share of New Entrepreneurs, and Startup Density.
Rate of New Entrepreneurs
The rate of new entrepreneurs is an early and broad measure of business ownership. It measures the percent of the adult population of an area that became entrepreneurs in a given month. North Carolina’s rate of 0.33 percent means that, on average, 330 people out of 100,000 adults became entrepreneurs in the state in each month.
Opportunity Share of New Entrepreneurs
Kaufman defines the Opportunity Share of New Entrepreneurs as “the share of the new business owners that are coming out of wage and salary work, school, or other labor market statuses.” It’s a proxy indicator of the percent of new entrepreneurs starting businesses because they saw market opportunities. According to the Kaufman Index, this indicator is important in part because “Entrepreneurs who were previously unemployed seem to be more likely to start businesses with lower growth potential, out of necessity. Thus, the Opportunity Share of New Entrepreneurs serves as a broad proxy for growth prospects.”
The high Opportunity Share of 82.56 percent for North Carolina indicates strong market opportunity.
Startup density is the number of startup firms per 1,000 firm population. (Startup businesses here are defined as firms less than one year old employing at least one person.)
Among the 25 largest states (North Carolina is the eighth largest by population), the Startup Density ranges from the low end of 57.9 startups per 1,000 employer firms in Wisconsin to the high end of 101.8 startups per 1,000 employer firms in Florida. With a startup density of 75.5, North Carolina is rocking the startup tech spaces.
Sure, “some entrepreneurs still aren’t convinced,” but not everyone can be right all the time. To round out the picture, the 2017 NCSTIR provided its own SWOT analysis for North Carolina’s tech industries. Here’s a sampling:
- Strong employment growth across one-year and five-year timeframes. As of December 2016, North Carolina’s unemployment rate stood at 5.2 percent, just six-tenths of one percent above that of the U.S. overall (4.6 percent).
- North Carolina is the fastest state in IT growth.
- High percentage of women in the industry workforce.
- R&D funding for industry in the state is ranked below average.
- Private innovation not matching university innovation.
- Venture capital funding lags behind comparable technology states.
- Average performance in entrepreneurship.
- Gap between annual STEM education completion and annual job openings offer opportunity to train more local workers.
- Sector has large multiplying effect on total state economy.
- Potential to grow minority presence in industry.
- New focus on cybersecurity nationally gives new market opportunity to existing NC tech companies.
- Startups may lack adequate access to capital.
- Competition between other emerging tech states, including many Southern states.
- Talent wars.
- Political uncertainty.
To address such weaknesses and threats as these is tekMountain’s reason for being. We are all about building the pillars of the area’s tech edifice through matching entrepreneurs with investors, through mentoring, and collaborating with public agencies, companies and universities.
Asked which factors contributed most to North Carolina’s competitive position in the tech sector, respondents to an NCSTIR survey said they most valued the region’s higher education assets and quality of life as the state’s most competitive aspects (p. 24).
Just what we’ve been saying all along.
Now’s the time for you and your business to get on board and not let the North Carolina tech boom — or all that amazing craft beer — pass you by. Give tekMountain a call today.