Read the full article from USA Today here.
SAN FRANCISCO – Denver and some smaller cities in the Midwest are showing their tech chops.
While the San Francisco Bay Area and Seattle dominate in availability of these high-paying jobs and the ability to attract tech workers, cities in the Midwest, Southern California and Canada are also becoming sought-after tech hubs, according to an annual analysis released by commercial real estate firm CBRE.
It ranked the best cities for tech talent, based on metrics such as rental costs for employees and companies, as well as available tech talent and outlook for jobs.
The top 10 cities remained largely the same as last year’s report, led by the San Francisco Bay Area, Seattle, Washington, D.C., Toronto and New York City. Denver is the one newcomer, replacing Dallas/Fort Worth.
Smaller markets (with fewer than 50,000 tech workers) in the Midwest – where there has been a major effort to attract more tech startups in recent years – saw increases in the number of tech talent jobs.
These jobs include software developers and programmers; computer support, database and systems jobs; technology and engineering-related jobs; and computer and information system managers.
Madison, Wisconsin, added 6,720 tech talent jobs in the last five years, a 39.5 percent increase, to 23,740. Columbus, Ohio, and Pittsburgh both added more than 6,700 tech talent jobs in the last five years. The latter two cities are close to surpassing 50,000 tech workers and becoming major markets for tech.
In Canada, where the cost of living is generally lower, Toronto added more than 80,000 tech talent jobs in the last five years, a more than 50 percent increase, bringing its total to 212,500 total tech jobs. That’s almost two-thirds the size of the San Francisco Bay Area’s tech talent labor pool.
In Ottawa, Ontario, tech talent jobs are up about 16 percent in the past five years.
Some smaller markets in the Midwest and Canada are surging thanks to more affordable costs of living and cheaper wages, says Colin Yasukochi, director of research and analysis at CBRE. Orange County, California, home to UC Irvine, is also growing quickly.
Major tech companies currently employ 37 percent of the tech labor force. The remaining 63 percent of jobs are in other industries such as finance, insurance, government, transportation and education, among others.
Technology jobs remain a huge draw, both for salary and availability. In the U.S., these account for 3.5 percent of total workers. But the tech labor force has increased 16 percent in the last five years, a pace more than three times the national job growth average.
While Amazon continues its search for a city to house its second headquarters, the CBRE report provides insight on what the e-commerce giant might be looking for in a new market.
There are three questions an employer would ask in Amazon’s situation, Yasukochi says. How much has the city invested in research and development? Is there an innovative culture and infrastructure? And does the city have the universities able to continually supply tech companies with skilled workers?
“One overarching theme we’ve seen over the years, including this year, is the tech employers are going where the tech talent is,” Yasukochi said.
The amount of tech talent in the San Francisco Bay Area and Seattle is still growing – thanks to the amount of quality universities and tech infrastructure in those cities. But they’re are also among the most expensive places to operate.
In the San Francisco Bay Area, where average salaries for tech employees run more than $125,000 and office rent could be around $4.7 million annually for a 75,000 square-foot office, CBRE estimates the total annual cost for a company to operate would be just more than $59 million.
The cheapest of the major tech markets is Montreal, where a business could run on about $27.6 million annually.
CBRE also did a brain gain versus brain drain analysis – meaning researchers charted the difference between where tech workers are employed and where they were educated.
Toronto topped the list of cities attracting educated tech workers from area universities and elsewhere, adding about 82,000 tech jobs to the pool of 27,000 tech graduates that its universities produced over the last five years. Toronto was followed by the San Francisco Bay Area; Charlotte, North Carolina; Seattle and Atlanta.