Where are the latest emerging tech hot spots in the U.S.? They are in Albany, Sacramento, Columbus, Colorado Springs and Madison, which all offer a high concentration of software developers, computer programmers, web developers and other conditions that offer talent-rich alternatives to established tech markets, according to a recent report, ‘Cracking the hardest code: where to find tech talent.’
The escalating war for tech talent in major tech hubs is real. While these hubs boast access to talent and a culture of innovation, they command high real estate and talent prices. Hence the report looked to uncover new markets with the following dynamics:
- A high concentration of software developers, computer programmers, or web developers (and at least 5,000 employed in such occupations)
- Some remaining slack in employment
- Vacancy rates that mean there’s still supply to choose from
- Markets that have new developments under construction
What it found was this: as of May 2016 (the latest data available), there are nearly 400,000 more software developers than computer programmers. Thanks to the advent of do-it-yourself web design, that job appears to be a dying occupation. For reference, there were 113,000 web developers in 2013, and just under 80,000 today – so the study leaves out web developers.
There’s a difference between quantity of jobs and concentration of jobs. Across the board, the New York City MSA has the greatest number of computer programmers and software developers. However, the concentration of software developers and computer programmers is highest in Silicon Valley. Meaning, the technology ecosystem is stronger in Silicon Valley.
The surprise is that the markets with the highest concentration of computer programmers are not necessarily the markets with the highest concentration of software developers. In fact, out of the top ten only five markets appear on both lists: Silicon Valley, San Francisco, Seattle, Washington, DC, and Austin. While these markets come as no surprise, the other markets that comprise the top ten do.
The report from JLL, Cracking the Hardest Code: Where to find tech talent, has uncovered new ‘hidden gems’ for tech companies. It analyzes markets with a high concentration of in-demand, affordable tech talent and available real estate.
“The top tech hubs are widely documented and their popularity comes as little surprise. So we took a look at what’s next by focusing on the key factors shaping the new, emerging tech hot spots,” said Steffen Kammerer, senior vice president and leader of JLL’s Technology group. “A ‘hidden gem’ city has a strong tech ecosystem, with a deep concentration of jobs in one or more technology professions, such as computer programmers and software developers.”
The five emerging tech hot spots are:
- Albany (computer programmers) – the capital of New York state put an early focus on creating the ‘Tech Valley’ with support from Rensselaer Polytechnic Institute and State University of New York Polytechnic Institute. That focus, combined with a handful of Fortune 500 company locations, has helped the Albany metro area achieve the second-highest concentration of computer programmers nationally. As of 2016, Albany is home to 5,880 computer programmers at an average salary of $76,000 per year. With an unemployment rate of 4.6 percent, it’s low enough to showcase a strong economy, but higher than the national average.
- Sacramento (computer programmers) – it’s surprising that Sacramento hasn’t come up as a tech hot spot before. Thanks to spillover from the San Francisco Bay Area, Sacramento is becoming an attractive option for homebuyers and a talented workforce that wants to tap into lower-cost living. With a computer programmer talent pool of more than 11,000 people with an average annual salary of $84,000, Bay Area companies looking to expand an hour north will benefit from a 21 percent discount on wages and significantly lower office rents.
- Columbus (computer programmers) – with a nearby talent pool from The Ohio State University plus an incredible amount of corporate headquarters including Abercrombie & Fitch, PNC Financial, and Nationwide Insurance, Columbus packs a surprising punch. It doesn’t stop there. With more than 11,000 computer programmers, it rivals both Sacramento and Austin, but the wages are more favorable for employers. The city’s talent pool for software developers, though not a part of the top 10, totals 13,700 people. What’s more, Columbus recently won the U.S. Department of Transportation’s smart city contest.
- Colorado Springs (software developers) – with a high quality of living plus access to the great outdoors, Colorado Springs’ talent pool and average wages for software developers is virtually equal to Boulder’s 6,000 people, but its cost for commercial office space is half that of Boulder. Supported by the University of Colorado-Colorado Springs, plus a significant military-based economy, companies like Microchip Technology, Northrop Grumman and Lockheed Martin have found a home here.
- Madison (software developers) – long hailed a Midwestern enclave for the creative types, Madison is a little-known secret to existing tech companies. Fueled by the University of Wisconsin-Madison, its tech ecosystem is also supported by maker and innovation organizations like Sector67, a non-profit dedicated to the development of the next generation of technology. And though its total number of software developers is just under 9,000, it has the 10th highest concentration of software developers in the country, relative to its size. Not only that, but wages are 40 percent lower than the highest-wage market (Silicon Valley).
“When determining if a city is right for your business, focusing on the ecosystem of a market can tell you if the city is viable over the long run,” said Julia Georgules, vice president and director of research for JLL. “The concentration of tech jobs, not just volume of tech jobs, is a sign of hidden tech talent and speaks to the stability and sustainability of the ecosystem. If there’s already a community of specific occupations in place, future job creation will likely be easier and the location should stay strong regardless of the economic cycle.”
The research is available (PDF file) to download here.