Using EMSI data to analyze the high-tech economy and STEM jobs, our friends Joel Kotkin and Mark Schill published an outstanding piece about the best cities for tech jobs. The article appears on Forbes and NewGeography.
They provide some great analysis and insight, so be sure to give the article a good read. We especially recommend the article on NewGeography, which offers a tad more detail.
Below we have included their data, as well as some of our thoughts and a few excerpts that help describe their process:
To determine which metropolitan areas are adding the most tech-related jobs, my colleague Mark Schill at Praxis Strategy Group developed a ranking system for Forbes that measures employment growth in the sectors most identified with the high-tech economy (including software, data processing and Internet publishing), as well as growth in science, technology, engineering and mathematics-related (STEM) jobs across all sectors. The latter category captures tech employment growth that is increasingly taking place not just in software or electronics firms, but in any industry that needs science and technology workers, from manufacturing to business services to finance. We tallied tech sector and STEM job growth over the past two years and over the past decade for the 51 largest metropolitan statistical areas in the United States. We also factored in the concentration of STEM and tech jobs in those MSAs.
The clear leader in their analysis is Seattle, which experienced 12% growth in the tech sector and 7.6% growth for STEM jobs. Joel and Mark also note this interesting fact:
More important for potential job-seekers, the Puget Sound regions has grown consistently in good times and bad, boasting a remarkable 43% increase in tech employment over the decade and an 18% expansion in STEM jobs. Seattle withstood both recessions of the past decade better than most regions, particularly the Valley. The presence of such solid tech-oriented companies as Microsoft, Amazon and Boeing — and lower housing costs than the Bay Area — may have much to do with this.
Two government dominated cities, D.C. and Baltimore, take 2nd and 5th place on the list, and San Diego (3rd, and the highest ranked in CA) and Salt Lake City (4th) round out the top five. Interestingly, San Jose is 7th and San Francisco is 13th. Most of us would have probably placed them higher. Metros like Jacksonville, Columbus, Raleigh, Nashville, Boston, and San Antonio now rank ahead of San Fran.
Joel notes California’s slipping hold on the tech-sector:
Silicon Valley may be churning out millionaires like burritos at a Mexican restaurant, but looking into the future, one has to wonder if its dominance will diminish. Limited developable land, an extremely difficult planning environment, high income taxes and impossibly stratospheric housing costs may lead more companies and people to relocate elsewhere, particularly if the big paydays needed to make ends meet wind down. Mark Zuckerberg and company can bask in their big IPO this week, but the Valley may soon need to consider what it must do to compete with the many other regions that are inexorably catching up with it.
Finally, the authors suggest that metros like St. Louis, Chicago, Philadelphia, and Los Angeles are loosing ground to other regions.
The complete list:
|San Diego-Carlsbad-San Marcos, CA||3||66|
|Salt Lake City, UT||4||58.5|
|San Jose-Sunnyvale-Santa Clara, CA||7||57.2|
|San Antonio-New Braunfels, TX||12||50.7|
|San Francisco-Oakland-Fremont, CA||13||48.5|
|Houston-Sugar Land-Baytown, TX||14||47.6|
|Austin-Round Rock-San Marcos, TX||16||46.8|
|Atlanta-Sandy Springs-Marietta, GA||17||46.5|
|Dallas-Fort Worth-Arlington, TX||20||44.2|
|Buffalo-Niagara Falls, NY||23||42.3|
|Charlotte-Gastonia-Rock Hill, NC-SC||24||42.1|
|Minneapolis-St. Paul-Bloomington, MN-WI||26||41|
|Providence-New Bedford-Fall River, RI-MA||27||40.5|
|Miami-Fort Lauderdale-Pompano Beach, FL||28||40.1|
|Louisville/Jefferson County, KY-IN||31||38.6|
|New Orleans-Metairie-Kenner, LA||32||38|
|New York-Northern New Jersey-Long Island, NY-NJ-PA||33||37.8|
|Hartford-West Hartford-East Hartford, CT||34||37.6|
|Tampa-St. Petersburg-Clearwater, FL||35||36|
|Oklahoma City, OK||36||35.7|
|Riverside-San Bernardino-Ontario, CA||38||33.8|
|Los Angeles-Long Beach-Santa Ana, CA||39||33.7|
|Las Vegas-Paradise, NV||40||33.4|
|St. Louis, MO-IL||47||24.9|
|Kansas City, MO-KS||48||24.4|
|Virginia Beach-Norfolk-Newport News, VA-NC||49||24.3|
|Milwaukee-Waukesha-West Allis, WI||50||24.1|
Here is a note on Joel and Mark’s methodology:
Our Best Cities for Technology Jobs ranking is a weighted index measuring growth and concentration of technology-related employment in the nation’s 51 largest metropolitan regions. The index includes both tech industry employment data and occupation-based employment data. Our technology industry component covers 11 six-digit NAICS sectors covering information industries such as software publishing, Internet publishing, data processing, and tech-related business services such as computer systems design, custom programming, engineering services, and research and development. The technology industry data covers 4.5 million jobs nationally. The occupation-based component includes 95 science, technology, engineering, and mathematics (STEM) occupations as classified by the federal Standard Occupation Classification system. This covers 8 million STEM workers that could be employed in any industry. Employment data in our analysis is courtesy of EMSI, Inc. and is based upon over 90 federal and state data sources.
The index comprises four weighted measures: 50% STEM occupation growth, 25% technology industry growth, 12.5% STEM occupation concentration, and 12.5% technology industry concentration. Growth measures are evenly balanced between the 2001-2011 growth rate and the 2009-2011 growth rate, while the concentration measure are job location quotients from 2011.
Note that there is likely to be some double-counting of STEM workers working in tech industries. The tech industries are also obviously employing others, such as salespeople, managers, janitors, etc.
Though these types of rankings typically include only industry data, we felt the STEM jobs data captured “tech” more cleanly so we weighted it higher. However we felt it still important to include the data covering the industries that most identify with the high-tech economy. The heavier weight on STEM helps minimize the effect of a double-counted STEM worker in a tech company.