Watch For These Emerging Tech Hubs To Take On SF, Seattle

Established tech talent hubs like San Francisco, Seattle, and Toronto as well as emerging cities like Dayton, Huntsville and Colorado Springs will likely continue along a steady growth trajectory after holding steady for the duration of the COVID-19 pandemic, according to a new report from CBRE.

The firm’s most recent annual Scoring Tech Talent Report shows that the San Francisco Bay Area, Seattle, Washington, D.C., Toronto, and New York City metro are the top overall North American tech markets, followed by Boston, Austin, Atlanta, Los Angeles/Orange County, and Ottawa.  The top emerging tech markets were Dayton, Huntsville, Colorado Springs, Omaha, and Des Moines.

“Tech talent concentration—the percentage of total employment—is a barometer of how ‘tech’ the market is and in its growth potential,” the report notes. “Tech talent comprises 11.6% of total employment in Ottawa and 10.9% in the San Francisco Bay Area—the highest concentrations and more than double the 50-market average of 5.5% tech talent density. Toronto, Waterloo and Seattle round out the top five most concentrated tech markets, ranging from 9.4% to 10.2% of their total employment. This sizeable concentration of highly skilled workers offers an environment conducive to innovation.”

But the top tech markets also are among the most costly: San Francisco is the most expensive market in the top 50 for a 500-person tech company leasing 75,000 square feet, with combined labor and real estate costs totaling nearly $69 million a year. Contrast that with Ottawa, the least expensive in the top 50, at $31.4 million a year.

New York is the most expensive market in the top 50 for asking rents, at $77.25 per square feet, while Cleveland was the least expensive at $18.70. 

Tech occupations posted job growth of 0.8% in 2020, whereas non-tech jobs showed declines of 5.5%.  Among tech gigs, software engineers were most in-demand, adding 85,000 jobs—an uptick of 4.8% over prior year levels.  From a demographic perspective, New York led tech degree completions with 20,576 in 2019, while Seattle led in millennial population change and Ottawa, a city with 11.6% of its job base in tech talent professions, prevailing in tech labor concentration.

CBRE also added a diversity component to this year’s survey in recognition of the fact that overall, US tech talent professionals are predominantly White or Asian and male. The firm found that Pittsburgh, Charlotte, Nashville, Atlanta, and Rochester were among those markets with the most diverse tech talent pools for underrepresented races and ethnicities, while Washington, D.C., Sacramento, Kansas City, Boston and Hartford were the top most diverse tech talent markets for women.

“Many factors already are in place to fuel strong tech-talent job growth this year and beyond coming out of the pandemic,” said Todd Husak, managing director of CBRE’s Tech & Media Practice Group. “Big tech markets will gain from their established pipelines of tech graduates and many workers’ return to city centers. Smaller markets will reap benefits from their cost advantages in labor and real estate as well as the tech industry’s embrace of remote work for certain employees.”