The hottest emerging markets for tech talent include Dayton, Huntsville, Colorado Springs, Omaha, and Des Moines. But the best value for tech talent (versus cost) can be found in Waterloo, Pittsburgh, Madison, and Vancouver.
These are just some of the many insights you can find in CBRE's 2021 Scoring Tech Talent report. Colin Yasukochi and his team at CBRE's Tech Insights Center generate the study annually; this year they looked at 50 North American markets and 10 Latin American markets through a variety of statistical lenses.
"Fifty of the largest markets by number of tech talent professionals in the U.S. and Canada were analyzed to create a scorecard ranking them comparatively. The scorecard uses 13 metrics to measure each market's depth, vitality, and attractiveness to companies seeking tech talent and to tech workers seeking employment. Each metric is weighted by its relative importance to job creation and innovation. Tech talent concentration metrics have the highest weights because they signify clustering of tech workers. Labor costs for tech talent are weighted more heavily than office rents because companies allocate more capital to labor than to real estate." (CBRE, pg. 13)
Despite the hype about a tech talent exodus from the Bay Area, NYC, and other major cities, the usual suspects continue to lead the scorecard, and none of the 40 largest tech talent markets showed a net decline. The Bay Area and NYC tech populations grew by 16.4% and 6.7% respectively over the past year.
However, the percentage growth of the tech talent pool was more pronounced in some unexpected markets. Among larger cities, the tech talent pool surged notably in Toronto (+42.8%), Vancouver (+36.1%), and Salt Lake City (+33.9%). Among smaller cities, 2021 saw big talent pool growth in Edmonton (+53.3%), Waterloo (+47.2%), Nashville (+36.1%), and Madison (+31.9%).
We particularly like to pay attention to the "Next 25" section (page 68-69), where the data is filtered to only 8 of the 13 criteria - presumably dropping absolute size, for example. Interestingly, many of this year's Next 25 are in the Midwest, South, and even Eastern US. These markets could be particularly interesting to companies looking to build a development center or similar tech operation with just 10 to 150 people. Choosing to locate in these emerging tech markets - including Dayton, Huntsville, Colorado Springs, and 22 others - could allow you to attract & retain great tech talent, without competing with the likes of Google or Amazon.
The topic was also featured in today's Weekly Take podcast, with report author Colin Yasukochi, Dan Harvey (CBRE Vice Chair), and Lisa Picard (CEO of EQ Office). Picard emphasizes that core tech markets will continue to be dominant for quite some time, and the recent migration to secondary markets is mainly an acceleration of pre-existing trends. She emphasizes that moves driven by affordability are not sustainable ("affordability is not a lifestyle; that gets wiped out pretty quickly"). In short, she predicts a reversion to core markets for quality tech talent and optimal collaboration, and both Harvey and Yasukochi seem to agree. Harvey credits Picard for coining the phrase "phygital" (physical+digital) to describe the key balance that companies will work to achieve for their post-COVID workplace experience. Yasukochi also discusses diversity, and notes that Pittsburgh (perhaps surprisingly) tops the rankings of diverse tech talent, while Washington DC is the best market for female tech talent.
NB- Notice a handful of unexpected Canadian cities showing strong on these lists? CBRE does not directly provide context on this topic, but we will be looking into it, and will post a follow-up when possible.