Year in Review: Tech industry sees big deals, growth in 2019

By Hayley Ringle  – Reporter, Phoenix Business Journal
December 27, 2019

As president and CEO of the Arizona Technology Council, Steve Zylstra has a pulse on what’s going on statewide in the tech industry. The council is one of the largest technology-driven trade associations in North America, with more than 850 members. I asked Zylstra about the biggest trends in 2019 and what he expects to see next year.

What was the most exciting thing to happen to the Valley’s tech scene in 2019? 
The Raytheon Co.-United Technologies Corp. (NYSE: UTX) merger was very exciting. Aerospace and defense has long been a technology sector staple industry in Arizona. We host some of the biggest brand’s headquarters along with their manufacturing and testing facilities. Therefore, shakeups like this are always very intriguing. This merger is particularly good news because it will lead Raytheon (NYSE: RTN) technologies to expand in our state and create thousands of new jobs.

What surprised you the most about Phoenix’s tech industry over the past year? 
I’ve been pleasantly surprised by how quickly Arizona is enacting new legislation to expand the technology industry. Ever since Gov. Doug Ducey was elected to office, Arizona’s government and economic development organizations have shouted from the rooftops that we’re open for business. Our technology sector has exploded over the past few years because we’re cutting the red tape to make it easier for companies to explore new innovation here in our state.

The efforts of Attorney General Mark Brnovich to enact a financial technology sandbox in 2018 has taken off with eight companies in the program in 2019. Gov. Ducey also recently signed House Bill 2673, which has created a property technology sandbox. The speed at which we’re opening up these sandboxes is already paying off and will continue to have a huge impact on our technology sector in the future.

What tech company set up shop in the Valley in 2019 that has you excited about its prospects and why? 
Nikola Motor Co. opened its new headquarters in Phoenix this past year, and it has piqued the interest of everyone in the technology industry and beyond. The company has the potential to completely change the electric vehicle industry with revolutionary battery advancements, and it’s expected to bring thousands of jobs to our technology sector.

What tech trend took hold in the Phoenix metro area over the past year? 
Arizona has quietly built the largest education technology sector in the nation with more than 50 edtech companies selecting Arizona for their headquarters. We’re leading the way for an industry that is expected to grow to $252 billion by 2020, as reported by Harvard Business Review. Companies such as CampusLogic, Picmonic, Parchment and Proctorio are among our top homegrown companies. In addition, companies like Zovio, which started in San Diego, have taken notice and moved their headquarters here to take advantage of our knowledge base and resources in edtech.

What’s something that didn’t happen in tech in 2019 that you believe should happen in 2020? 
Our ongoing efforts to lobby to sign the new NAFTA, now known as the United States-Mexico-Canada Agreement, have been heard and it’s looking positive that a deal will be signed in 2020. According to information collected by the U.S. Census Bureau, trade with Mexico increased 7.7% from 2017 to 2018 to a total of $16.7 billion, while trade with Canada grew by 2.4% to $3.7 billion. Arizona’s total bilateral trade with Mexico and Canada came in at $20.2 billion in 2018.