Tech Centers

Sacramento is one, ranked 27th of 53, as this story in New Geography notes.

An excerpt.

A growing tech industry is often considered the ultimate sign of a healthy local economy. By that measure, the Bay Area still stands at the top of the heap in the United States, but our survey of the metropolitan areas with the strongest tech job growth turns up some surprising places not usually thought of as tech meccas.

Charlotte, N.C., is more often associated with banks than bots. Yet from 2006 to 2016, tech businesses in the Queen City expanded their job count by 62%, with 18% growth from 2014-16, the fastest clip in the nation. Meanwhile, over the past decade, the metro area logged a 23% increase in the number of workers in STEM occupations (science, technology, engineering and mathematics-related jobs). This rapid job growth and strong recent momentum, driven partly by health care and environmental technology, ranks it second on our list. In the past 10 years, the region has added 7,400 jobs in two key high-tech business services sectors, custom programming and systems design services, along with nearly 700% growth in software publishing employment. To be sure, the share of tech jobs in Charlotte’s economy remains one third that of Silicon Valley, and the tech and STEM workforces are far smaller, but quality of life, lower housing prices, as well as decent plane connections, seem likely to help it to continue to attract tech workers.

To determine the metro areas that are generating the most tech jobs, Mark Schill of Praxis Strategy Group analyzed employment data from the nation’s 53 largest metropolitan statistical areas from 2006 to 2016, with extra weighting for growth from 2014-16 to give credit for current momentum. Half our ranking is based on employment growth at companies in high-technology industries, such as software and engineering services. (This includes all workers at these companies, some of whom, like janitors or receptionists, do not perform tech functions). Half is based on changes in the number of workers classified as having science, technology, engineering and mathematics-related jobs (aka STEM). This captures the many tech workers in industries not primarily associated with technology, such as finance and business services. Data is sourced from EMSI.

Another surprising up and comer is Indianapolis in fifth place. The share of STEM jobs in the local economy, 5%, is close to the national average but STEM employment is up 18% since 2006. Tech employment has grown rapidly, with the job count at tech companies up an impressive 68% since 2006, led by 1,700% growth at Internet-based businesses and 8,100 new jobs in custom programming and systems design.

California-based companies are in the forefront such as Salesforce, which is adding 800 employees to its already 1,600-person office in Indianapolis. Similarly No. 7 Nashville is poaching jobs from the Bay Area with firms such as Lyft but also developing its own roster of defense and health-related tech firms. Since 2006, Nashville added jobs in nearly every tech industry we track, led by 3,700 new jobs in systems design, 1,800 in data processing, and 1,100 in engineering services.

The Bay Area continues to excel in large part as a product of the rapid growth over the past decade of social media and business applications for technology. The San Francisco metro area, which includes tech-heavy suburban San Mateo County, ranks first. The City by the Bay and its environs, a hub for technical service firms like Uber and Salesforce.com, has experienced remarkable 90% growth in tech employment and a 36.5% expansion in STEM jobs from 2006 to 2016. Silicon Valley, with a concentration of tech industry workers 75% higher than upstart San Francisco, has also achieved rapid job creation, with tech industry employment up 80% and the number STEM workers increasing 32%, ranking it fourth. STEM employment per capita is roughly twice that of San Francisco.

Other familiar faces make the top 10: No. 3 Austin, No. 6 Raleigh-Durham, No. 8 Seattle and No. 10 Denver. These lower-cost alternatives to the Bay Area have all been attracting people and companies from pricier California. Yet these areas too face rising housing prices, which is a challenge particularly for workers entering their early 30s and looking to settle down.

Easily the biggest surprise on the list is Detroit, which improved its position to ninth, a remarkable 30-place jump from the last edition of this list in 2015. It generated 26% growth in high-tech jobs and boosted its STEM employment by 8.4%. Despite the decline of the central city, the Detroit metro area has never faded as a technical center; due largely to the auto industry its per capita STEM employment has long been above the national average. This is reflected in a post-recession boom in engineering services in the region – some 14,000 new jobs since 2006 – leaving Detroit with a concentration of engineering services more than three times the national average. Its percentage of STEM workers is 50% above the U.S. norm, roughly equivalent to that of Raleigh-Durham, Boston and Denver.

More help could be on the way from a reviving urban core, says Chicago-based analyst Pete Saunders, himself a Detroit native. There is some evidence that the city itself is beginning to attract skilled and better educated workers. Microsoft has set up an outpost downtown for 165 employees and there is a small but evolving start-up scene.

About David H Lukenbill

I am a native of Sacramento, as are my wife and daughter. I am a consultant to nonprofit organizations, and have a Bachelor of Science degree in Organizational Behavior and a Master of Public Administration degree, both from the University of San Francisco. We live along the American River with two cats and all the wild critters we can feed. I am the founding president of the American River Parkway Preservation Society and currently serve as the CFO and Senior Policy Director. I also volunteer as the President of The Lampstand Foundation, a nonprofit organization I founded in 2003.
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