Five US cities are dominating tech job growth

The US has a big distribution problem when it comes to careers in tech.
11 December 2019

San Francisco is at the heart of the US tech scene. Source: Shutterstock

The unprecedented pace of technology developing and integrated into everyday life has created a trillion-dollar market with worldwide spending of information technology (IT) close to US$4 trillion this year. 

In the US, the tech industry has created more than 250,000 new jobs from 2005 to 2017, though the majority (90 percent) of the jobs are located in a handful of cities, while the remaining 10 percent are spread across 377 metro areas across the country.

New research revealed the five cities leading in tech jobs are Boston, San Diego, San Francisco, Seattle, and San Jose. In contrast, cities, including Madison, Albany, Provo, are some of the cities gaining the smallest percentage of tech jobs. 

The research by scholars Mark Muro and Jacob Whiton, from the Brookings Institution and the Information Technology and Innovation Foundation, revealed the consequences of the uneven development of the tech industry across cities and emphasized the need for government initiatives to close the gap in this disparity. 

Digital divide 

The phenomenon— agglomeration— illustrates the highly concentrated tech jobs in a few cities are due to aggressive demands for talents and clustering of tech resources in a single city leading to the development of a tech hub. 

As an example, San Francisco has by far created the most high-tech jobs during the 12 years, and it is noted that three out of the five cities are from California. This form of clustering is contributing to the widening gap between tech-hub cities and other communities with minimal opportunities. 

Besides that, Mr. Muro explained the impact of such “clustering” is unaffordable housing due to the influx of tech talent to the city, while cities outside of these high-tech hubs are frozen in progress and development from a lack of tech and talent. 

In the long term, such developments in selected cities may drive the digital innovation further but are also heavily tasked with a nationwide growth. The unfeasibility alludes to a divergence in tech opportunities, counter-productivity in tech innovation and other social problems, as Mr. Muro stated;

“The superstar places are becoming extremely expensive, choked with traffic and struggling with big social costs like inequality gone wild and homelessness.”

It’s worth mentioning, however, that a study by CompTIA found that faced by sky-high rental costs, three out of four skilled tech workers would be willing to relocate away from leading tech hubs. 82 percent of workers said the cost of living would be a top factor in their decision to relocate, even if that meant a cut to their salary. This has led to an opportunity for less likely candidate cities to open doors for fledgling tech scenes.

Agglomeration isn’t a new concept as history has reflected a high concentration of the labor pool allows for the rapid spread of new ideas and innovation. However, in this case, the dynamic may differ due to the sonic speed of the tech industry and the disparity will only magnify with the greater adoption of tech concentrated in certain cities. 

Hence, the initiation of national efforts such as federal funding of US$100 billion on research and development, and workforce development in regions outside of major tech hubs. In addition, tax benefits and other programs to initiate tech growth in communities falling behind the digital race can upscale the nation as a whole in digital transformation