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Tech Power Players 2024

These graphics capture the mixed bag that was the Boston tech sector in 2023

Image from Adobe Stock; Globe staff illustration

The Boston tech sector has had a tough couple of years, and 2023 was no exception.

The hangover from a pandemic-era surge in hiring spurred layoffs at local companies such as Wayfair and Klaviyo. Venture capital investment plunged by more than half from its 2021 peak. And the tech industries in other metro areas — particularly those with lower costs of living — are competing fiercely for talent, investment, and companies.

And yet, even with these challenges, the local tech sector has reasons for optimism.

“We’re coming out of an odd period,” said Carolyn April, vice president of industry research at CompTIA, a trade association focused on the IT industry. “I don’t look at the numbers this year and say, ‘Oh, my goodness, things are really veering off course for Boston.’”

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Here are some graphs that take stock of the Boston tech scene — where it’s been, where it is, and where it’s going.

Jobs

By and large, employment in the local tech sector remained robust in 2023, according to data released by CompTIA.

The Boston metro area encompassed nearly 270,000 tech jobs overall, lagging behind New York, Washington, D.C., and San Jose, but still accounting for 9.4 percent of the area’s workforce.

Layoffs, however, did take their toll. Employment in the Boston tech market last year fell by more than 1,800 jobs from 2022, a little less than 1 percent.

While Boston’s tech sector is projected to rebound this year, growing employment by about 5,000 jobs (just under 2 percent), this growth is still bound to lag behind regions such as Dallas, Miami, and Austin, Texas, April said.

“There’s a maturity here around technology that doesn’t exist in some of these other markets that are really just burgeoning and growing for the first time,” she said. “You’re not going to see these enormous leaps every year, year over year, for the Boston tech workforce, because you’d get to a level of saturation a little bit.”

Economic impact

The estimated economic impact of Greater Boston’s tech sector slipped to $75.2 billion from $75.5 billion in 2022, accounting for 14.4 percent of the area’s economy. This pales in comparison to tech’s share of local economies in San Jose (54.5 percent), Seattle (29.1 percent), and San Francisco (28.1 percent).

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Median wages for Boston tech workers essentially held steady in 2023 at $121,115, ranking sixth among the 10 metros with the highest net tech employment. When adjusted for cost-of-living, however, those earnings plummeted to $89,648, and Boston’s rank dropped to ninth, trailing metro areas such as San Jose ($124,482), Atlanta ($112,164), and Seattle ($111,571).

This cost-of-living squeeze is a longstanding problem that April said may contribute to employees of local companies choosing to live elsewhere as hybrid and remote work becomes common at many tech firms, including ezCater of Boston and HubSpot of Cambridge.

“The ability to work from home has enabled really top performers and top talent out there to not have to live in the city proper or the region proper,” she said. “So that is one way to get around that issue.”

Workforce

Hiring in the Boston area tech sector slowed in 2023, with employers listing 83,921 job postings, a 28.5 percent drop from 2022.

But where the area fared better was in the share of jobs in emerging tech, such as artificial intelligence, blockchain, and robotics. These emerging tech jobs accounted for 30.2 percent of all tech job listings, a tie with Seattle. Among the top 10 metros by employment, this puts Boston behind only San Jose and San Francisco in terms of the share of emerging tech jobs (35.3 percent and 33.5 percent, respectively).

“You want to be where the latest and greatest is in terms of technology,” said April. “The fact that we’re seeing the arrow pointing up in terms of hiring in this area, that says good things for Boston being ahead of the curve.”

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The leading tech occupations in the area were in a broad category encompassing “software, programmers, web, and quality assurance,” accounting for more than 69,000 jobs in Boston last year. In 2024, this category is projected to grow by 3.3 percent.

One area where the needle has not moved, however, is diversity. In Boston, Black and Hispanic or Latino people each account for only 4 percent of the tech workforce, while women make up just over a quarter of the tech workforce. By comparison, Black people make up 8 percent of the total Boston workforce; Hispanic and Latino people 11 percent; and women 51 percent.

This gap is an issue several of this year’s Tech Power Players are tackling, from the investors zeroing in on diverse entrepreneurs to educators creating pathways for students of color to enter the industry.

Venture capital

After soaring as the nation emerged from the pandemic, venture capital investments for Massachusetts tech companies continued to fall last year as interest rates kept investors at bay.

The value of all deals fell to $10.1 billion, down from $15.3 billion in 2022 and $21.3 billion in 2021, according to data compiled by PitchBook.

But not all companies suffered. For instance, Ascend Elements, a Westborough-based battery manufacturer, locked down $542 million in September. Many AI-focused companies, such as Lightmatter, also scored sizable infusions.


Dana Gerber can be reached at dana.gerber@globe.com. Follow her @danagerber6.