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Silicon Valley tech firms power job growth in the hinterlands

This image shows Columbus, Ohio was ranked 28th overall in the 2017 CBRE Scoring Tech Talent Report.

The growth speaks for itself. The concentration of tech talent in Madison, Wisconsin increased by more than 30 percent over the past two years. In Fort Lauderdale, Kansas City (Missouri), Miami, and Salt Lake City, there were gains of more than 20 percent. Oh, and Omaha, Pittsburgh, and Columbus, Ohio? They each registered rises of more than 11 percent.

These latest figures from CBRE’s Scoring Tech Talent Report provide strong evidence that new tech jobs are being created far beyond Silicon Valley, and underscore the region’s role in creating new employment opportunities across the country. Released today, the report measures the quality and concentration of tech talent and the growth of tech jobs in 50 markets across America and Canada.

“What we’re seeing occurring now is the impact and influence that Bay Area tech companies are having in markets all across the country. Bay Area-based tech companies are opening offices and creating jobs in strategic markets like Pittsburgh and Detroit for example, as they work in partnership with universities and automotive companies on integrating their technologies into self-driving cars,” said Colin Yasukochi, a director of research and analysis at CBRE and author of the report, in a statement.

CBRE’s report comes as a conversation about how to best connect the so-called Rust Belt with Silicon Valley tech firms. One idea gaining momentum is the establishment of business development offices by regional economic development boards.

Echoing this, Yasukochi said, “We’ve seen tech talent location strategies closely aligned with innovation both in the Bay Area and in strategic markets around the country. Companies are finding the competitive advantage within a market and leveraging the skills of the talent there.”

This chart shows The top 10 markets for tech talent momentum grew at least 10 percent faster during the recent two-year period.

Above: The top 10 markets for tech talent momentum grew at least 10 percent faster during the recent two-year period.

Image Credit: CBRE Scoring Tech Talent Report 2017

Lower costs of doing business are one factor driving job creation outside of Silicon Valley. According to CBRE, one year of operating costs for a 500-person tech firm requiring a rental obligation of 75,000 square feet ranged from a high of more than $57.4 million in the San Francisco Bay Area to $24.3 million in Vancouver, British Columbia. Meanwhile, across America’s heartland, annual operating costs for Columbus, Ohio came in at $40.9 million and Detroit at $38.8 million — 29 percent and 32 percent cheaper, respectively, than the San Francisco Bay Area.

Below are figures for the tech labor pools in both large and small markets.

These charts show tech talent labor pools in bit large and small markets.

Above: Source: CBRE Scoring Tech Talent 2017, U.S. Bureau of Labor Statistics (Metro Area) April 2017;
Statistics Canada (Metro Area), 2017. (Footnotes: 1: 2011-2016; 2: 2011-2016; 3: 2016.)

Image Credit: CBRE Scoring Tech Talent Report 2017

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