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.
Winners, Losers and Stagnaters
Detroit’s rise since our last study tells us something about the importance of industry to tech and the allure of lower housing prices. Another clear Rust Belt winner in this year’s survey is Pittsburgh. Still an energy and industrial center, and with low housing prices, the former steel capital jumped 10 places on our list to 21st. Pittsburgh has gained tech momentum as a center for autonomous vehicles, with Uber and Ford setting up operations there to tap talent at Carnegie Mellon. Like other upstart regions, Pittsburgh has seen a rise in high-tech business services, with 2,400 new jobs in engineering and 3,900 in systems design.
Rochester, N.Y., is up 13 places to 36th, and Washington, D.C., gained 12 spots to 38th, while No. 41 Milwaukee and No. 25 New York both rose 10 places. New York’s improvement is tied to social media and a surge in biotech research and development. The region saw nearly 400% growth in employment at internet and web-based firms, but was not as competitive in many other tech sectors in our analysis. This plays to the city’s communications industry strengths, as well as Wall Street-connected fintech growth. While the metro area has by far the nation’s largest number of STEM workers at 450,500, in part by virtue of its massive population, New York is certainly not likely to emerge as a Silicon Valley competitor --the number of STEM jobs per capita in the New York metro area remains below the national average.
Many traditional tech powerhouses have just held onto their positions, with little movement up or down. No. 16 Portland and No. 18 Boston held their own. So too, despite the excitement around Snapchat’s IPO, did Los Angeles at 37th. Its per capita STEM employment has now disturbingly dropped below the national average.
And then there are the big losers, which include some traditional tech powerhouses. Despite its powerful medical and chip technology industry, San Diego dropped sixteen places to 39th. Houston dropped the most, some 39 places to 43rd, due to the energy bust. Yet it’s too early to count either of these places out in the long run since they both retain larger than average shares of STEM workers. A Trump defense boom could help jumpstart San Diego and Houston’s energy industry could be a prime beneficiary of the President’s “America first” energy policy.
Future Prospects
In the immediate future, no place will challenge the Bay Area as the mecca of technology and STEM employment. Other metro areas may now be growing as fast -- and Charlotte even faster -- but the Bay Area juggernaut has a big lead, even if it may finally be slowing down. James Doti, who directs the regional forecast at Chapman University, estimates that the job growth rate in the Valley’s information technology sector dropped to 2% in 2015 from a torrid 9% the previous year.
Doti and other observers trace this in large part to the area’s soaring housing costs, now the highest in the nation. This particularly impacts millennials, many of whom are now entering their 30s, the prime age for family formation and home buying. If millennials continue their current rate of savings, notes one study, it would take them 28 years to save up enough to afford a median-priced house in the San Francisco area, but only five years in Charlotte, or three years in Atlanta.
In 2015 7,500 more Americans left the Valley than arrived, the first time there’s been a net loss since 2011, according to the Silicon Valley Competitiveness and Innovation Project.
If these trends represent the future, there could be an increasing exodus of jobs and talent from the Valley. In many of the upstart regions, there likely will be opportunities for economic migrants in the robustly growing (if less “sexy”) tech services sector, which includes engineering, systems design and custom programming.
The big question is who will be the biggest beneficiaries, already established tech hubs like Seattle or Denver, or a long list of rising wannabes?
In a word, as Sherlock Holmes would say, “the game’s afoot.” The future of regional economies around the nation could be at stake.
| 2017 Metropolitan Tech-STEM Growth Index | ||||||||
| Rank | Region (MSA) | Score | 2006-2016 Tech Industry Growth | 2014-2016 Tech Industry Growth | 2016 Tech Industry LQ | 2006-2016 STEM Occuptn Growth | 2014-2016 STEM Occuptn Growth | 2016 STEM Occuptn LQ |
| 1 | San Francisco | 98.7 | 90.0% | 17.5% | 2.87 | 36.5% | 9.9% | 1.79 |
| 2 | Charlotte, NC | 88.7 | 62.1% | 18.0% | 0.91 | 28.5% | 10.4% | 1.01 |
| 3 | Austin | 86.2 | 76.6% | 14.0% | 1.93 | 35.4% | 7.4% | 1.76 |
| 4 | San Jose | 85.9 | 79.6% | 12.5% | 5.12 | 32.2% | 8.6% | 3.43 |
| 5 | Indianapolis | 72.4 | 68.1% | 16.8% | 0.96 | 17.8% | 5.3% | 0.98 |
| 6 | Raleigh, NC | 70.3 | 46.9% | 8.2% | 2.07 | 31.9% | 7.0% | 1.56 |
| 7 | Nashville | 65.7 | 75.6% | 12.4% | 0.71 | 13.7% | 4.5% | 0.80 |
| 8 | Seattle | 62.7 | 47.7% | 6.9% | 2.32 | 28.5% | 4.7% | 1.89 |
| 9 | Detroit | 61.6 | 26.1% | 14.8% | 2.12 | 9.6% | 8.4% | 1.50 |
| 10 | Denver | 60.8 | 40.3% | 6.9% | 1.72 | 25.6% | 5.5% | 1.48 |
| 11 | Salt Lake City, UT | 60.2 | 38.9% | 6.5% | 1.41 | 24.5% | 6.0% | 1.19 |
| 12 | Dallas | 59.7 | 43.2% | 9.3% | 1.13 | 20.5% | 5.0% | 1.17 |
| 13 | Phoenix | 59.5 | 48.5% | 12.2% | 0.93 | 10.1% | 5.8% | 1.16 |
| 14 | Grand Rapids | 58.8 | 34.0% | 8.9% | 0.46 | 13.4% | 7.9% | 0.88 |
| 15 | Kansas City, MO | 57.1 | 37.5% | 9.8% | 1.48 | 15.7% | 5.5% | 1.16 |
| 16 | Portland, OR | 53.4 | 30.4% | 7.4% | 1.07 | 16.2% | 5.5% | 1.36 |
| 17 | Tampa | 52.4 | 20.9% | 10.6% | 0.94 | 3.8% | 8.3% | 0.90 |
| 18 | Boston, MA | 50.5 | 38.4% | 6.6% | 2.21 | 15.3% | 3.8% | 1.55 |
| 19 | Louisville, KY | 50.4 | 27.6% | 8.3% | 0.57 | 15.0% | 4.3% | 0.69 |
| 20 | Atlanta | 47.6 | 23.7% | 7.7% | 1.23 | 11.8% | 4.6% | 1.13 |
| 21 | Pittsburgh, PA | 46.9 | 32.5% | 7.8% | 1.15 | 12.8% | 2.8% | 1.06 |
| 22 | San Antonio | 46.1 | 28.2% | 1.5% | 0.82 | 22.2% | 3.4% | 0.83 |
| 23 | Orlando | 45.9 | 8.5% | 7.4% | 0.89 | 8.4% | 6.8% | 0.78 |
| 24 | Cincinnati, OH | 43.5 | 21.9% | 6.6% | 0.81 | 9.3% | 4.1% | 1.04 |
| 25 | New York | 43.3 | 30.4% | 7.7% | 0.98 | 5.9% | 3.4% | 0.89 |
| 26 | Miami | 41.9 | 8.9% | 8.4% | 0.62 | 2.3% | 6.0% | 0.63 |
| 27 | Sacramento | 40.9 | 41.0% | 7.5% | 0.90 | 3.8% | 1.7% | 1.26 |
| 28 | Baltimore | 39.7 | 25.1% | 4.2% | 1.52 | 12.5% | 2.1% | 1.38 |
| 29 | Minneapolis | 39.4 | 18.2% | 4.7% | 1.04 | 9.3% | 3.4% | 1.29 |
| 30 | Richmond, VA | 38.0 | 20.3% | 6.2% | 0.78 | 4.8% | 3.1% | 0.98 |
| 31 | Jacksonville, FL | 37.9 | 23.1% | 3.1% | 0.80 | 7.3% | 3.5% | 0.76 |
| 32 | Chicago, IL | 37.5 | 22.6% | 6.8% | 0.92 | 3.7% | 2.5% | 0.93 |
| 33 | Las Vegas | 37.2 | 6.6% | 5.6% | 0.53 | 1.5% | 5.6% | 0.47 |
| 34 | Hartford | 36.7 | 34.7% | 4.3% | 1.00 | 3.2% | 2.1% | 1.14 |
| 35 | Columbus, OH | 36.5 | 9.9% | 2.9% | 1.05 | 11.9% | 3.1% | 1.18 |
| 36 | Rochester, NY | 35.1 | 27.1% | 5.1% | 0.76 | 1.1% | 2.5% | 1.10 |
| 37 | Los Angeles | 34.0 | 16.4% | 6.6% | 0.84 | 0.2% | 2.7% | 0.93 |
| 38 | Washington, DC | 32.4 | 4.8% | 3.8% | 2.54 | 6.7% | 2.7% | 1.99 |
| 39 | San Diego | 31.2 | 19.1% | -2.2% | 1.62 | 10.0% | 2.6% | 1.38 |
| 40 | Cleveland | 29.0 | 14.1% | 3.3% | 0.73 | 1.4% | 1.8% | 0.97 |
| 41 | Milwaukee | 28.7 | 2.9% | 4.6% | 0.77 | 1.0% | 2.5% | 1.02 |
| 42 | Oklahoma City, OK | 28.6 | 7.1% | 3.9% | 0.52 | 8.4% | 0.0% | 0.96 |
| 43 | Houston | 28.4 | 18.5% | -2.3% | 1.09 | 20.0% | -1.8% | 1.22 |
| 44 | St. Louis, MO | 27.2 | 2.8% | 4.5% | 0.86 | 0.0% | 2.0% | 0.96 |
| 45 | Buffalo | 27.1 | 22.9% | 1.0% | 0.77 | 2.4% | 0.7% | 0.79 |
| 46 | Memphis, TN | 26.3 | 30.8% | -5.8% | 0.39 | 3.6% | 2.6% | 0.59 |
| 47 | Providence | 25.0 | 8.0% | 2.5% | 0.72 | 0.4% | 1.2% | 0.88 |
| 48 | Philadelphia, PA | 22.2 | 2.5% | 1.7% | 1.09 | -1.8% | 1.5% | 1.06 |
| 49 | Virginia Beach | 18.8 | -3.0% | -1.7% | 1.03 | 2.2% | 1.0% | 1.09 |
| 50 | Birmingham | 18.4 | 1.4% | 2.0% | 0.62 | -4.2% | 0.4% | 0.81 |
| 51 | Riverside | 16.5 | -15.4% | 0.8% | 0.30 | -4.6% | 2.2% | 0.48 |
| 52 | New Orleans | 16.0 | 21.6% | -1.9% | 0.62 | -0.8% | -2.3% | 0.67 |
| 53 | Tucson, AZ | 15.9 | 6.0% | -1.9% | 86.8% | -2.5% | 0.0 | 1.1 |
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.
This piece originally appeared at Forbes.
Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.
Mark Schill is a community and corporate strategy consultant with Praxis Strategy Group and Managing Editor of New Geography.
Charlotte photo by Daritto7117 (Own work) [Public domain], via Wikimedia Commons
Email this Story
.jpg){kind=link}