Steve Zylstra will presenting at the Technology for Accounting Conference on Dec. 7th. His topics is: Technology Paves the Road For Success.
The Technology for Accounting Conference is focused on providing CPAs in all fields of accounting with the tools and skills needed to keep up to date with changes in technology. What do you know about Bitcoins and the Blockchain? How about Cloud Computing? Are there opportunities to build relationships between those in Finance and IT? Learn how the Arizona Technology Council has been making strides in our state legislature to show the value of technology in raising social and economic standards in Arizona.
If you keep tabs on business news in Arizona, you likely have read or seen stories about how hot our startup technology scene is. Our state is home to dozens of business accelerators, incubators and maker facilities that are bringing new innovation to the marketplace. And the rest of the planet is taking notice. For example, the Global Accelerator Report 2015 named Phoenix-based Seed Spot as one of the top 20 global startup accelerators in the world.
Yes, there is enough success in this sector to make us proud. But as head of the largest member-supported technology association in Arizona, I know this segment is a just a piece of the expanding technology ecosystem here. The Arizona Technology Council gets a front row seat to the positive news created by a plethora of companies that often started with an idea to make our lives better.
As those companies—some new, some household names—make their mark, they contribute to economic development throughout the state. According to the “Cyberstates 2016” report published by CompTIA, Arizona’s technology sector employs just under 135,800. That translates into 61 of every 1,000 private sector workers in the state being employed by high-tech firms, which pay an average annual wage of $95,617. On a national level, Phoenix is ranked third for tech job growth among large markets in CBRE’s 2015 annual “Scoring Tech Talent” report. The Valley had 58 percent growth from 2010 to 2015, behind only the San Francisco Bay area and Baltimore.
In some cases, the road to success started in research and development occurring at Arizona’s universities. U.S. News & World Report ranked Arizona State University No. 1 among the “Most Innovative Schools” in the nation for 2016 after surveying the university’s curriculum, faculty, students, campus life, technology and facilities. That means ASU outpaced second place Stanford University, the breeding ground of Bay Area tech talent. In 2015, the university also received 107 National Science Foundation grants, including a $2.8 million award for an electron microscope. The University of Arizona was awarded 58 grants and Northern Arizona University, 14.
It’s off-campus, however, where our leading tech sectors have really taken shape. For example, Arizona remains a leader in aerospace and defense. Tucson's Raytheon Missile Systems has been awarded a $523 million contract by the U.S. Department of Defense to build 47 SM-3 Block IB missiles in 2016. Interest remains high in the Apache helicopters produced by Boeing, which employs 3,800 at is Mesa site. And Phoenix-based Honeywell Aerospace this year received FAA approval for its JetWave wireless in-flight connectivity system that will deliver high-speed Wi-Fi for airline passengers.
Speaking of connectivity, two Valley companies are getting ready to launch the next generation of satellite communications at a price of $3 billion. Iridium Communications, based in Virginia but with large operations in Tempe, in September is scheduled to launch its first batch of Iridium NEXT satellites. Among its largest partners in the effort is Orbital ATK, which is assembling the satellites at its Gilbert facility.
Another hot spot for Arizona is the community of data centers, with the Site Selection Group and Datahawk ranking Phoenix seventh in the Top 10 largest data center metro areas based on presence of enterprise facilities and wholesale colocation capacity. The recent big news was CyrusOne opening a new data hall at its Chandler campus, adding 36,000 square feet to the local campus and 2 megawatts of power capacity. The expansion moves the global data center services provider further down the path of making the Valley one of the world’s largest data centers for colocation of services. Separately, Aligned Data Centers is building its second facility in Phoenix, which will become one of the largest multi-tenant data centers in the state. Also, IO has begun planning for an expansion next to its Phoenix data center with a three-story, $400 million to $500 million project.
As vast amounts of data move into the cloud and our digital economy expands, cybersecurity has become one of the critical issues facing our nation. Phoenix is the growing center for cyber solutions for the national and international epidemic of cyberware, intellectual property theft, identity theft and data breach. Even the Council is playing a large role in this area. We are working with public and private sectors leaders, including elected officials and corporate CEOs, as well as the city of Phoenix and other cities in the region to get “Cyber Security Valley” off the ground. Our annual Cybersecurity Conference draws IT security leaders throughout the Southwest. Also, our Cybersecurity Committee produces data security-focused events for the ecosystem.
As data becomes the backbone of the Internet of Things (IoT), companies with Arizona ties are playing leading roles in their respective arenas. Scottsdale's TASER continues to define smarter policing with its Axon brand, which includes a growing suite of connected products and services such as body cameras. Honeywell International recently introduced its integrated Industrial Internet of Things analytics platform, Uniformance Suite. Tempe-based PADT’s IoT-related projects are expected to double by the end of this year, including new products and making existing products smart and connected. To support our members involved in this new wave, the Council just launched an IoT Committee.
Despite a wealth of good news, some sectors such as the semiconductor industry have hit a rough spot. However, even with the recent news of downsizing at Intel, we have a lot for which we can be grateful. ON Semiconductor, Microchip Technology, Intel, Cactus Semiconductor and other companies here continue to operate at healthy profits and contribute significantly to our global reach. All are major exporters and work with countries around the world on a regular basis. According to “Cyberstates 2016,” Arizona ranks fourth in the nation for semiconductor manufacturing careers with over 19,400 jobs.
While the venture capital front also has had it challenges, there’s even some positive news on this front. Dow Jones Ventures Source reported the state’s venture capital total for the first half of the year topped $171.8 million — 36 percent ahead of the same period last year. One Scottsdale company, Centauri Health Solutions, received the lion's share of statewide funding at $50 million. The company provides software for government-sponsored health-care programs and other applications. The Halo Report from Silicon Valley Bank, the Angel Resource Institute and CB Insights cited the Arizona Technology Investor Forum in Phoenix and the Desert Angels in Tucson as among 10 angel groups nationwide that had put the most money into companies. Still, Arizona ranked No. 18 in the nation in terms of total venture capital invested, so we still have work to do.
This is just a snapshot of the sectors that collectively have shaped Arizona’s tech ecosystem today. Space here doesn’t allow me to tell every story of success. But just based on what’s happened so far, I can’t wait to see what’s next.
Steven G. Zylstra Sc.D. (Hon.), President & CEO, Arizona Technology Council
Steven G. Zylstra Sc.D. (Hon.) serves as president and CEO of the Arizona Technology Council, a role he assumed in December of 2007. He is responsible for strategy, operations, all financial matters and accomplishment of policy development for the Council. Zylstra is a vocal spokesman for the value technology can provide in raising social and economic standards in Arizona. He has served in numerous technology leadership and advisory roles to the Governor and currently serves on several association, industry and community boards. Between August 2013 and August 2015 he served as the Chairman of the global organization Technology Councils of North American (TECNA), which connects over 50 regional technology associations into a cohesive network that focuses on issues important to the technology industry. Steve earned a bachelor’s degree in automotive engineering technology from Western Michigan University and was awarded an Honorary Doctorate of Science in Technology from the University of Advancing Technology.