skip to content
Primary navigation

I.T. Takes a Village

by Cameron Macht
cameron.macht@state.mn.us
July 2017

Back in 1999 the University of Minnesota, Duluth (UMD), and Lake Superior College committed to becoming two of the first tenants in a new technology center situated in downtown Duluth. The plan for the Soft Center and Duluth Technology Village was to create a campus that joined computer software entrepreneurs and businesses, local colleges and universities, and well-trained students, all with a goal of creating hundreds of high-paying jobs in Duluth.1

However, an article in the Duluth News-Tribune recapped how the Soft Center’s “completion coincided with the crash of the technology industry in the late 1990s,” significantly altering the launch and success of the campus and changing the type of companies that currently occupy the space. 2 But while the Technology Village didn’t attract software and information technology (I.T.) companies as quickly or easily as planned, it’s important to note that Northeast Minnesota and the city of Duluth have still seen a huge increase in employment at Computer Systems Design and Services firms since 2000.

According to the most recent data from DEED’s Quarterly Census of Employment & Wages (QCEW) program, Northeast Minnesota is now home to 42 Computer Systems Design and Related Services establishments providing about 650 jobs and more than $43 million in annual payroll. That is up from just 274 jobs back in 2000, a whopping 136 percent increase. In comparison, total regional employment expanded just 1.2 percent since 2000, meaning that computer systems design accounted for 23 percent of job growth in the region over the past decade and a half (see Figure 1).

Figure 1. Northeast Minnesota Industry Employment Trends, 2000-2016


Technology Village

With 538 jobs at 19 firms, about 83 percent of the region’s Computer Systems Design jobs are located in the city of Duluth, with another 9 percent found in other parts of St. Louis County and the other 8 percent spread through the rest of the seven-county Arrowhead region. At that level, Duluth has the 12th largest number of Computer Systems Design and Related Services jobs in the state, and the largest number for any city outside the Twin Cities metro area. Duluth has nearly 150 more jobs in this subsector than Rochester, 225 more jobs than in St. Cloud, and nearly four times as many jobs as Mankato (see Table 1).

 

Table 1. Employment in Computer Systems Design and Related Services by City in Minnesota, 2016

City, County

Number
of Firms

Number
of Jobs

Total Industry Payroll

Minneapolis, Hennepin

322

9,350

$1,004,935,552

Bloomington, Hennepin

134

3,414

$390,563,283

Edina, Hennepin

91

1,966

$217,461,692

Eden Prairie, Hennepin

104

1,914

$194,789,244

Saint Paul, Ramsey

121

1,802

$178,522,767

Minnetonka, Hennepin

73

1,331

$143,257,819

St. Louis Park, Hennepin

60

1,160

$115,169,244

Eagan, Dakota

83

1,089

$108,205,893

Roseville, Ramsey

38

1,043

$127,059,250

Plymouth, Hennepin

99

866

$91,704,648

Blaine, largely Anoka

24

713

$68,600,718

Duluth, St. Louis

19

538

$37,531,141

Brooklyn Park, Hennepin

27

438

$49,054,962

Rochester, Olmsted

45

391

$35,122,978

Golden Valley, Hennepin

37

385

$35,740,270

Burnsville, Dakota

44

360

$29,043,071

St. Cloud, largely Stearns

14

311

$28,272,318

Woodbury, Washington

42

212

$18,419,021

Maple Grove, Hennepin

66

157

$11,527,006

Mankato, largely Blue Earth

13

144

$11,587,941

Source: DEED Quarterly Census of Employment & Wages

 

While Computer Systems Design and Related Services employment in Duluth doubled from 2000 to 2016, the faster growth actually happened in the rest of the region, where employment increased over 600 percent since 2000. Duluth had 94.5 percent of total jobs at the turn of the century, but rapid growth also occurred in Carlton, Itasca, and the rest of St. Louis County to bring the region up to speed.

Information Technology

At a technical level the Computer Systems Design and Related Services industry comprises “establishments primarily engaged in providing expertise in the field of information technologies through one or more of the following activities: (1) writing, modifying, testing, and supporting software to meet the needs of a particular customer; (2) planning and designing computer systems that integrate computer hardware, software, and communication technologies; (3) on-site management and operation of clients’ computer systems and/or data processing facilities; and (4) other professional and technical computer related advice and services.” 3

As such, workers in this sector have very specialized skills and knowledge and must continually learn new technologies to keep pace. Many of the largest occupations in demand in Computer Systems Design and Related Services require Bachelor’s degrees, and almost all require at least some college experience or vocational training.

This higher education has led to higher wages. QCEW data show that average annual wages in 2016 were $66,612 at Computer Systems Design and Related Services firms, compared to $41,704 across all industries in Northeast Minnesota. Wages in the I.T. sector increased 62 percent since 2000, the equivalent of a $25,500 raise.

All but two of the computer-related occupations that required a Bachelor’s degree paid more than $30 an hour in the region, while jobs that required an Associate’s degree also paid well over $20 an hour at the median. The highest wages were being paid to computer and information systems managers, who had a median hourly wage of $46.27 in the region in the first quarter of 2017 – producing an annual wage of more than $95,000. Even the non-computer-related occupations found in the industry, such as sales representatives, general and operations managers, and customer service representatives, were paid relatively high wages for the region (see Table 2).

 

Table 2. Wage and Employment Estimates for Occupations in Demand in Computer Systems Design, Northeast Minnesota, 2017

Occupational Title

Estimated Regional Employment

Median Hourly Wage

Typical
Education Needed

Software Developers, Applications

220

$35.24

Bachelor’s degree

Computer Systems Analysts

180

$34.61

Bachelor’s degree

Computer Programmers

130

$33.59

Bachelor’s degree

Computer User Support Specialists

420

$22.93

Associate’s degree

Computer and Information Systems Managers

130

$46.27

Bachelor’s degree

Network and Computer Systems Administrators

230

$33.90

Bachelor’s degree

Web Developers

90

$23.12

Bachelor’s degree

Computer Network Support Specialists

90

$27.98

Associate’s degree

Computer Network Architects

70

$30.58

Bachelor’s degree

Database Administrators

60

$37.60

Bachelor’s degree

Operations Research Analysts

40

$28.34

Bachelor’s degree

Information Security Analysts

10

$37.83

Bachelor’s degree

Sales Representatives, Services, All Other

500

$21.89

High school diploma

General and Operations Managers

2,080

$33.84

Bachelor’s degree

Customer Service Representatives

1,910

$14.29

High school diploma

Total, All Occupations

141,910

$17.25

Source: DEED Occupational Employment Statistics (OES) program, Qtr. 1 2017

 

Future Growth

The future looks even brighter for the industry with Northeast Minnesota expected to see a nearly 60 percent increase in employment in the sector over the next decade. DEED’s Employment Outlook tool projects that the region will surpass 1,000 Computer Systems Design and Related Services jobs by 2024, adding 400 net new jobs in the 10-year span. At that rate, Computer Systems Design would account for one in every eight new jobs created in the region (see Table 3).

 

Table 3. Northeast Minnesota Industry Employment Projections, 2014-2024

Industry

Estimated Employment 2014

Projected Employment 2024

Percent Change 2014-2024

Numeric Change 2014-2024

Total, All Occupations

159,860

163,078

2.0%

3,218

Computer Systems Design and Related Services

679

1,079

58.9%

400

Source: DEED Employment Outlook

 

But in addition to the Computer Systems Design and Related Services sector, the information technology field is much larger, with many companies in every industry employing workers who provide these types of skills and services. For example, the Finance and Insurance, Management of Companies, Information, Manufacturing, and Health Care and Social Assistance industries also hire many of these same workers. This extra demand leads to even larger increases for many of the computer-related occupations in the region.

These occupations will also have hundreds of replacement openings, which are a count of existing jobs that become available because the current jobholder retires, leaves the occupation to start doing something else entirely, or leaves the geographic region. The number of replacement openings is projected nearly to match the number of new jobs created, with the most total openings expected for software developers, computer systems analysts, and computer user support specialists (see Table 4).

 

Table 4. Northeast Minnesota Computer-related Occupational Projections, 2014-2024

SOC Code

Occupation

Estimated Employment 2014

Projected Employment 2024

Percent Change
2014-2024

Numeric Change
2014-2024

Replacement Openings *
2014-2024

** Total Openings
2014-2024

0

Total, All Occupations

159,860

163,078

2.0%

3,218

38,200

44,660

150000

Computer and Mathematical Occupations

2,392

2,762

15.4%

370

340

710

151121

Computer Systems Analysts

254

334

31.4%

80

30

110

151122

Information Security Analysts

24

25

4.1%

1

151131

Computer Programmers

139

137

-1.4%

-2

30

30

151132

Software Developers, Applications

355

496

39.7%

141

50

190

151133

Software Developers, Systems Software

121

150

23.9%

29

10

40

151134

Web Developers

127

144

13.3%

17

10

30

151141

Database Administrators

83

91

9.6%

8

10

20

151142

Network and Computer Sys. Administrators

280

283

.0%

3

30

30

151143

Computer Network Architects

168

167

-0.5%

-1

20

20

151151

Computer User Support Specialists

487

528

8.4%

41

60

100

151152

Computer Network Support Specialists

93

108

16.1%

15

10

20

151199

Computer Occupations, All Other

210

223

6.1%

13

20

+40

* Replacement Openings: Net replacement openings is an estimate of the need for new work force entrants to replace workers who leave an occupation. It estimates the net movement of:

1) experienced workers who leave an occupation and start working in another occupation, stop working altogether, or leave the geographic area, minus

2) experienced workers who move into such an opening. It thus does not represent the total number of jobs to be filled because of the need to replace workers.

** Total Openings : Total job openings represent the sum of employment increases and net replacements. If employment change is negative, job openings caused by growth are zero and total job openings equals net replacements.

Source: DEED Employment Outlook


I.T.’s a Man’s World

While these jobs should be in high demand from the high growth and high wages, it is interesting to see that they are primarily filled by males. Data from DEED’s Quarterly Workforce Indicators (QWI) program show that 63 percent of jobs in the Computer Systems Design industry are held by men, and just 37 percent of the workforce is female. However, the share of women workers is increasing over time, rising from 32.6 percent in 2000 and increasing nearly 10 percent since the low in 2006 (see Figure 2).

Figure 2. Northeast Minnesota Computer Systems Design Industry Workforce Demographics by Gender



1Reitan, Cheryl. “An Uncommon Vision: Duluth Technology Village/Soft Center.” BRIDGE, the UMD Magazine, Volume 16, Number 1, Winter 1999. Retrieved from: http://www.d.umn.edu/publications/bridge/Winter99/cover.html#vision
2Renalls, Candace. “Duluth Tech Village nearly full as efforts by A&L’s ‘man on a mission’ pay off.” Duluth News-Tribune, May 21, 2012. Retrieved from: http://www.duluthnewstribune.com/content/duluth-tech-village-nearly-full-efforts-als-man-mission-pay
3United States Census Bureau. North American Industry Classification System. Retrieved from: https://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=54151&search=2012%20NAICS%20Search

back to top