LOS ANGELES-Last week, CBRE released a report identifying the top US markets for tech talent, as reported by GlobeSt.com. Los Angeles, however, was not among the top five markets for tech clusters, which included San Jose, San Francisco, Washington D.C., Boston and Seattle. GlobeSt.com sat down with CBRE senior research analyst John Vitou to explore Los Angeles' tech-talent ranking, and found that Los Angeles has a core tech market with an emerging tech talent cluster.
The report shows that Los Angeles is one of the top markets for tech occupations with 180,000 tech-related occupations, ranking in the top ten for programming and developing jobs, and, overall, ranks number two in college graduates with tech-related degrees. This data shows that Los Angeles has a strong pool of tech talent already located in the city. “We have seen significant labor shortages, so from an occupier standpoint Los Angeles is really an attractive market,” says Vitou. It can fill job openings and job replacements more efficiently than some of the other more concentrated markets that are smaller, making it is less vulnerable to labor shortages than other smaller emerging markets.”
Los Angeles universities are highly competitive in tech-related research and development expenditures, showing that the city has a financial stake in the technology field. However, the market scored some of the lowest marks for labor costs and tech concentration because the market has a diverse job market. “In markets like Dallas and Atlanta, the labor costs are just lower,” says Vitou. “It makes them more competitive, but at the same time, Dallas and Atlanta are still large markets. So, they are both large and cheaper.” Vitou explains that older, established and more diversified markets, like New York and Chicago, are a better comparison to Los Angeles. When compared to those markets, Los Angeles performed very well.
Because the report measured tech-talent in relation to other fields, concentrated tech markets, like San Jose, San Francisco and Boston, were boosted to the top of the list. However, Los Angeles does have a strong tech presence, especially when grouping technology with entertainment and media. In the past few years, Los Angeles has experienced a surge of start-up groups migrating down from the Silicon Valley and settling in Santa Monica, a movement hailed Silicon Beach, and in Downtown Los Angeles, where creative office space is more readily available and a bit cheaper. Mixed-use developments in the downtown market are also becoming attractive to tech talent, and are starting to draw attention from real estate investors.
“What really drives where these occupations or industries locate has everything to do with talent retention and attraction,” says Vitou. “That is part of the reason why you are seeing this migration to downtown Los Angeles and western Los Angeles, because they are either established and historically have been appealing for this generation, as is the case with western L.A., or they are emerging and potential hub for this generation, who are moving to downtown L.A.”
Overall, Los Angeles remains a core tech market with strong talent—one of the largest talent pools in the nation—as well as emerging tech start-ups.
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