Amazon’s February announcement that it will create more than 15,000 new jobs in Bellevue over the next few years tells you all you need to know about the technology industry on the Eastside: Job-growth is robust, and tech-sector activity is electric.

Michael Schutzler

Michael Schutzler, CEO of the Washington Technology Industry Association

Amazon currently has more than 2,000 employees in Bellevue, part of approximately 135,000 technology-related jobs in about 3,700 Eastside tech companies, largely in Bellevue, Redmond, Kirkland, Issaquah, and Renton, according to Michael Schutzler, CEO of the Washington Technology Industry Association (WTIA).

“That’s a 15 percent compounded growth over the last five years — it’s a lot of growth,” Schutzler said, noting job figures are based on projections for final 2019 numbers based on early 2019 data and all of 2018 data, some proprietary, some publicly available.

He expects at least that rate of growth to continue over the next five years.

“Barring any sort of macro-economic radical shift, there is no reason to expect that the job growth will slow on the Eastside because fundamental economic drivers of the tech industry are talent and intellectual property,” he said. “There’s a critical mass of that on the Eastside that will continue to grow.”

Kristina Hudson

Kristina Hudson, Executive director at OneRedmond

Kristina Hudson, executive director at OneRedmond — the city’s combined economic development enterprise, chamber of commerce, and public foundation — also expresses tech job-growth optimism.

“On the Eastside, Microsoft, Facebook, Amazon, and Google are growing significantly over the next few years,” she said. “This, in addition to new tech companies choosing to locate to the Eastside, means there will be a dramatic increase in tech jobs over the next few years and well into the future.”

One Amazon executive, asked about the Eastside’s future trajectory as a technology hub in 10 to 20 years, sees the region’s lure remaining strong.

Dave Clark

Dave Clark, Senior vice president of worldwide operations at Amazon

“There’s no reason that I could come up with that this part of the country doesn’t continue to be an incredible draw for talent,” said Dave Clark, senior vice president of worldwide operations at Amazon. “If Bellevue plans for the next 20 years the way they planned for the last 20 years, there’s no reason to think that you couldn’t imagine continued substantive growth. There’s a lot of room to grow out from where you’re at in downtown today. And I think there’s a lot of opportunity there.”

Generally speaking, in the next five years, most business leaders WTIA’s Schutzler talks to are confident, even though a pause in the long-running bull market is expected, perhaps later in that time window.

Schutzler says roughly a couple hundred new tech companies form on the Eastside annually. But technology job growth doesn’t occur just in so-called tech companies.

“The definition of technology company used to be vertical, and you used to be able to refer to a company that produces software applications or software technology as a tech company,” Schutzler said. “But there are more software developers working in Starbucks than every other company in downtown Seattle, with the exception of Amazon.”

Numerous tech workers are employed in life-sciences companies, too, where data modeling precedes test-tube work, meaning there can be as many data scientists as life scientists in such companies, he said.

“So … that tech company definition has become a very horizontal, smeary thing to look at,” Schutzler said. While there are about 3,700 tech companies on the Eastside with about 135,000 workers, “When you define it in terms of an employment sector or a capability sector, it’s substantially larger than that; there are easily twice that number of employees in the Eastside who are working in a technology field. They just don’t happen to work for a tech company.”

Looking at projections from the Washington State Employment Security Department, computer and mathematical occupations in the Seattle-King County region, for example, were projected to grow at an average rate of 3.79 percent from 2017 to 2022, and an average rate of 2.83 percent between 2022 and 2027. For software developers-applications, the rates are 4.72 percent and 3.48 percent, respectively.

That’s compared to average rates for all jobs of 2.06 percent and 1.55 percent for those periods, respectively, underscoring the surge in tech-related jobs.

Joe Fain

Joe Fain, President and CEO of the Bellevue Chamber

As the healthy rate of tech job growth continues, so, too, does the continuing need for labor, said Joe Fain, president and CEO of the Bellevue Chamber.

“If you’ve got the skills, and in many cases even if you don’t, if you’re smart and ambitious and willing to work, more and more of these companies are trying to get you earlier and earlier and train you up to be what they need, and I think that trend continues,” Fain said.

Also, more talent is gravitating toward seeking work on projects meaningful to them, and that fit their interests and lifestyle, he said. That is good news for some of the smaller tech firms that also are located in the region because “what they offer, it’s something that sometimes can’t be matched by the big guys.”

Tech companies gobble up space

Gary Guenther

Gary Guenther, Senior vice president and partner at Kidder Mathews

Gary Guenther, senior vice president and partner at Bellevue commercial real estate firm Kidder Mathews, said about 70 percent of all new office leases on the Eastside (largely the so-called Innovation Triangle, encompassing a concentration of technology companies and workforce talent in Redmond, Bellevue, and Kirkland) are tech-related, based on square footage.

He said the tech growth he’s seen in his 20 years in the business is unprecedented.

“I think it’s going to continue,” he said. “Particularly in Bellevue, it’s a very business-friendly environment — safe, clean streets; really great schools; all things that today’s worker is looking for.”

He expects a lot of the tech growth to be clustered around the East Link light rail opening in 2023.

“There’s still a lot of growth to be had in the (downtown) core, a lot of towers going up,” he said. Looking five to 10 years out, he sees the core potentially moving farther to the east along the Interstate 405 corridor, the Wilburton district, and onto the Bel-Red corridor and beyond.

Bel-Red includes the quickly developing Spring District, which is welcoming Facebook this spring into the first of three towers it will occupy there by 2023. Facebook Seattle counts more than 5,000 employees across 18 offices in Seattle, Bellevue, and Redmond.

Amazon grabbed recent headlines with its plans to develop a 43-story tower in downtown Bellevue, part of its growth plans. Kidder Mathews listed Amazon’s current Bellevue space commitment at about 1.9 million square feet, or about 15 percent of downtown’s Class A availability. But Guenther said he could easily see the company at 5 million-plus square feet in Bellevue in the next five years with its future plans, including the tower and other properties.

For perspective, Microsoft has 15 million-plus square feet owned or leased on the Eastside, according to Kidder Mathews data. Other big Eastside tenants include Facebook at 1 million-plus square feet leased and owned, Google at roughly about 1 million square feet leased and owned, and T-Mobile at 1.3 million leased.

“We are, with the growth, starting to develop some … world-class amenities that go along with that growth,” Guenther said.

Bellevue’s infrastructure, like light rail, and other amenities played a role in attracting Amazon’s planned expansion there. The city has what young professionals and families are looking for, Clark said. Amazon’s employment surge there will occur in phases, with a couple large groups in the fall, another batch in mid-2021, followed by more later.

“Bellevue feels alive today, but I think when you see tens of thousands of young people sort of dumping out on the sidewalks and into the community to go have lunch and dinner … and to shop in the little shops and do those things, I think it’s going to bring another level of vibrancy to downtown,” Clark told about 700 people attending the Bellevue Downtown Association’s annual celebration in February.

Asked after his talk how transformational he thinks Amazon’s pending arrival of thousands of additional employees will be on the Eastside, he said he expects Bellevue’s vibrancy to extend from the Bellevue Way mall area closer to I-405, the bus terminal, and light rail.

He sees the idea of Bellevue’s “Grand Connection” of downtown coming to life “because our people really do like to live, work, and play in the area — in the same areas,” Clark said.

In a blog post on its Bellevue expansion, Amazon said it hopes its downtown sites “help accelerate the implementation of Bellevue’s Grand Connection, a pedestrian-friendly artery through the central business district connecting Meydenbauer Bay Park to the Wilburton area.” It plans to build “significant common space” along Northeast Sixth Street to create a pedestrian connection and a new green area for residents, commuters, and downtown workers. The ground level will promote neighborhood connectivity with thousands of square feet reserved for local retail and other uses, the company said.

Amazon also is expanding in Redmond, where it’s leasing space for its Project Kuiper satellite operation. Project Kuiper, first announced in early 2019, is an initiative to launch more than 3,000 low-Earth-orbit satellites that will provide low-latency, high-speed broadband connectivity to unserved and underserved communities around the world. Kuiper Systems LLC is a wholly owned subsidiary of Amazon.com Services.

Redmond will be the primary headquarters for Kuiper’s research and development, as well as its primary prototype manufacturing and qualification facility, Amazon said in December. The facility will comprise about 219,000 square feet of leased space in two buildings. It’s unclear how many people work on Kuiper now or will work at the Redmond facility. Amazon listed 171 open positions on its Kuiper team in early February, mostly in Bellevue.

Giving Silicon Valley a run for its money, talent-wise

With all the tech expansion, is the Seattle region becoming the next Silicon Valley?

Not in terms of venture capital, WTIA’s Schutzler said, but the two are pretty close in talent.

“If you look at the total number of software developers that are involved in industry, we are on par,” he said. “We are very, very close to the total number of software developers, so we’re No. 2 by a hair in talent. And when it comes to things like innovations, like online retail or cloud application development, or artificial intelligence, or machine learning, we are actually ranked No. 1 by far.”

That’s why companies like Google, Facebook, Apple, and other Silicon Valley giants have built huge operations locally, “because we are so deep in that particular talent pool compared to any other place in the world,” Schutzler said.

Kidder Mathews’ Guenther said the California giants aren’t the only ones leasing or buying space locally.

“There’s so much intellectual capital here in this area and just such a sense of entrepreneurship that we do see a lot of spinoff companies, certainly from Microsoft and the other big companies,” he said.

Also, developers have had to construct buildings that reflect the region’s high-quality tech firms. Tech companies are highly focused on employee recruiting and retention, culture, collaboration, and having a healthy work environment, Guenther said.

“These developers are really having to cater to their needs and are building some world-class properties,” he said. “And the other thing that’s happening is because we have such great-credit tenants leasing full buildings, these buildings are selling. So we’re seeing unprecedented demand from institutional investors, both foreign and domestic, that probably five years ago couldn’t even spell Bellevue, and now they’re tripping over each other to buy these properties. … Every year, we seem to be surpassing a record price.”