Startups looking to fund their business ideas might have a greater opportunity to connect with investors in Arizona.
Investors poured more than $1.8 billion into startups in Arizona in 2021 and venture capital funding was up more than 144%, compared to the prior year, according to the Arizona Technology Council’s third quarter technology industry impact report.
“We have the most robust, technology-focused entrepreneurial community than we’ve ever had before,” said Steven Zylstra, president and CEO of the Arizona Technology Council.
Zylstra attributes the rise in venture capital to an abundance of support for entrepreneurs via organizations like StartupAZ and business pitch events, such as the Arizona Innovation Challenge, which had more than 2,500 applicants since its inception in 2011.
“Today, there’s so many of these kinds of programs in our community,” Zylstra said.
The report, released this week, indicated the number of technology companies in the state rose more than 8% year-over-year for a total of 14,493.
The report, however, found technology job postings dropped about 18% during the third quarter to reflect the cooling job market, although postings were greater than the same time last year.
Professional, scientific and technical services had the greatest number of technology jobs in the state with 41,064, followed by information technology, and finance and insurance with 19,848 and 17,157 jobs, respectively, according to the report.
Education needs
Data show the state lags 25% below the national average for the number of college graduates in the science and engineering fields.
“Arizona, in general, has a low percentage of people who have achieved a four-year degree, period, and science and technology is part of that,” Zylstra said.
To rectify that, the Arizona Technology Council Foundation is focusing efforts on K-12 STEM education through programs and events to foster early awareness of technology career paths, Zylstra added.
Zylstra said the New Economy Initiative at Arizona State University, Northern Arizona University and the University of Arizona is also addressing the need for innovative research and education to ensure economic growth and employment.
ASU led the way in science and engineering degrees completed in 2021 at 6,120, followed by The University of Arizona at 3,058 and University of Phoenix at 2,734, according to the report.
Arizona ranked 12th in the nation for technology employee diversity, according to the report.
The technology council has made diversity, equity and inclusion a top priority by allocating resources for events, groups and speakers, in addition to partnering with industry leaders and nonprofits to improve awareness.
“Research has shown that having a diverse workforce is critical for innovation,” Zylstra said. “… In my view, it’s an important thing for technology companies’ bottom line.”
The Arizona Technology Council’s quarterly report is compiled by eImpact, an organization that creates web-based data to assist cities, industries and planners create policies and engage stakeholders. Data is sourced from Emsi, the Brookings Institution, AngelList, the National Science Board and the U.S. Census Bureau, among others.