The effort to substantially grow the region’s technology workforce is facing stiff headwinds.
St. Louis is dealing with some of the national employment trends in the sector, like layoffs and companies cutting back on hiring new positions.
From 2022 and 2023, the total number of active job listings for tech positions dropped 45%, according to a March report from TechSTL, the region’s tech council. The report also finds the St. Louis region had steeper drops in active listings compared to the U.S. as a whole in that same time period.
As stark as this news was for TechSTL Executive Director Emily Hemingway, it also offered a sense of relief, she said.
“When this [report] came out, it was really validating for all of us because we had seen in life, in reality, that things had shifted,” Hemingway said.
She cites two culprits for the current contraction: an end to the pandemic hiring spree in tech and the explosive growth of artificial intelligence prompting some companies to become leaner.
While the report found the number of active job listings dropped dramatically between 2022 and 2023, overall employment in the local tech industry ticked up slightly, by 2%.
This comes as the U.S. Bureau of Labor Statistics anticipates some tech-sector occupations like software developers, information security analysts and data scientists, will grow as much as 35% by 2032 compared to about 3% growth for all occupations in the country.
Hemingway said that means the underlying skills for a technology-focused role are still in demand, just maybe not at a large firm.
“When you have significantly fewer jobs, you can’t be dependent on our large anchor institutions or corporate partners to really drive the workforce,” Hemingway said. “These jobs that are being cut are largely in these larger hiring agencies.”
She said the St. Louis region needs to prioritize the development and growth of local startups and entrepreneurs as a way to support the existing tech talent in the region.
“If we can’t find these folks a good way to make money in St. Louis, they will either change their industry or they will change their town,” Hemingway said. “It is a race to support what we have here and give them a reason to stay in St. Louis.”
‘A lot of fluff in the startup ecosystem’
An innovative idea typically forms the basis of new startups, but there can be a downside to focusing too much on pitching them, said Christian Johnson, who runs the geospatial startup Metis Analytics, which provides workflow management software for intelligence analysts.
In the 8½ years that Johnson’s been involved in the local startup scene, he said he’s seen some organizations catering to startups favor pitching and promotion over concepts like how to build and scale a new venture.
“There’s a lot of fluff in the startup ecosystem,” he said. “It becomes a fashion show basically, instead of it being about can you actually build a product that people want and that will buy from you?”
Johnson also runs Founders Lounge, a weekly forum where entrepreneurs of any experience level can discuss their ideas and any obstacles they’ve faced. It also has events that bring in speakers from other cities who shed light on marketing, sales and the technical sides of a business, like choosing a cloud database or how to incorporate large language models into an application, he said.
“Just different things that will help move the needle in your business that actually do help,” Johnson said.
Spaces for these kinds of interactions are vital, yet lacking in St. Louis, he said, that adding other markets in the U.S. have established places like these.
“This is not something that is foreign but something that is super powerful that we’re bringing to St. Louis,” he said.
Financing and customers
Beyond more programming to help startups with their business strategy, there’s the sticking point of securing local capital or customers that will invest in or buy a local company’s product.
It’s something Arch Grants specifically looks for when vetting the companies it eventually supports, said Executive Director Gabe Angieri. The nonprofit awards grants to companies with high growth potential in St. Louis that are either already located in the region or that will relocate here, he said.
“We want companies that see their long-term path to success in St. Louis and this region,” he said. “We put a high barrier to entry on that.”
It helps when a startup, local or otherwise, can clearly articulate potential partners, customers or when it can point to people in the St. Louis region who have weighed in on its business plan or innovation, Angieri said. Locating capital and customers are frequent challenges for new ventures in the region, he added.
“St. Louis is an extraordinarily generous city — there’s a lot of wealth in this region,” Angieri said. “It is not the most adventurous when it comes to investing in early-stage startups. And it is a high-risk endeavor, no question about it.”
There is a push at the state level for tax credits for angel investing that could entice more early-stage investing. But even in the local biosciences sector, which has examples of successful startups that are now standalone companies or were acquired, lots of capital can be hard to come by.
“There’s just fewer examples of people taking giant home run swings and succeeding,” said Tom Cohen, chief operating officer at Panome Bio, a local biotech startup.
This can push local startups to look for capital or customers elsewhere, likely from the coasts, and that can leave startups asking, “Why am I here?” if their financial support is elsewhere, Angieri said.
One solution he sees is in some of the existing large corporations in St. Louis working directly with local startups in addition to the dollars they already dedicate to organizations like Arch Grants, he said.
“It’s shifting from a mindset of community-based philanthropy to a more risk-tolerant approach,” Angieri said. “To see the solutions and the innovations come out of the startup sector as viable options as you seek to address pain points in your own companies.”
If local corporations started dedicating a portion of their budget to pilot with startups in St. Louis, it could unlock considerable growth for small to midsize ventures in the region, he said.
‘Right now we’re whispering’
Entrepreneurs are also responsible for driving this shift in perspective for local companies, argues Chris Ocasio, a server and bartender who’s recently started developing apps.
“If we want them to listen, then we have to speak,” he said. “And right now we’re whispering.”
When Ocasio first decided to pursue his own venture less than a year ago, he said he was struck by the level of support he received.
“Two years ago, a year ago, I had no idea there was this type of ecosystem in St. Louis,” he said. “Everyone was excited to see someone hungry to get into the entrepreneurial space.”
Ocasio argues not enough people or companies in the broader St. Louis community are aware of the innovations people like him are working on or how they can get involved in the community if they wanted to.
“There’s no TikTok’s about this, you know? Like why can’t we do that,” he said. “We need to show that pride and get St. Louis talking about the fact that there’s innovators here, [that] we’re hungry [and] going to make it happen.”
A blueprint for success
Leaders across St. Louis don’t have to look far for a potential blueprint on how to respond to the current job environment in the technology sector. The biosciences sector experienced a similar contraction about 20 years ago, said Justin Raymundo, BioSTL’s director of regional workforce strategy for the bioscience sector.
“In the early 2000s, we really didn’t have what we would call a thriving entrepreneurial ecosystem or an innovation economy,” he said. “We focused particularly on having large corporations or large academic institutions.”
St. Louis saw large companies leave the area or get acquired by firms outside the region, Raymundo said. The strategic response to this and the urban depopulation of the time was to create the Coalition for Plant Live Sciences (the precursor to BioSTL) that would focus on developing an ecosystem to support homegrown innovation in the biosciences and cushion against corporate downsizings, he explained.
Two decades later, that strategy has paid off and led to key drivers of innovation in the Cortex Innovation District, BioGenerator Ventures, a dedicated fund for investing in and building biotech startups, and other markers of a healthy startup system where new ventures are making successful exits, he added.
“That’s a story of how anchors came together in this community at a point when we really needed to invest,” Raymundo said.
But it wasn’t cheap or necessarily easy, he added.
“What we're demystifying now is that a lot of this requires investment, particularly philanthropic investment, state and local investment, private-sector investment,” Raymundo said. “We’ve reached this point in our region over 20 years of a lot of patient capital and commitment.”
Johnson, of Metis Analytics, said it’s worth it for St. Louis to make similar pushes now for other sectors like geospatial or artificial intelligence.
“We have to do that,” he said. “There are more geospatial startups that are coming here from out of town. But also there needs to be more geospatial startups that are starting from here.”
The National Geospatial Intelligence Agency has plans to collaborate with more outsider organizations, academic institutions and private industry when its new headquarters in St. Louis fully opens in 2026.
It could create similar conditions in the biotech sector now, where ideas can spin out into new ventures, said Cohen with Panome Bio.
“That seems like something that could really blow up,” he said. “And could be the nucleus that creates a whole new sector. We could become the space to build geospatial companies.”
