Study: Cities Hungry for Tech Workers
More than one in four private-sector workers in the San Jose/Silicon Valley area work in high-tech jobs, according to an AeA report. New York held the most overall tech jobs. Smaller cities, however, are on the rise -- places like Baltimore and Pittsburgh are attracting tech businesses with low costs of living and proximity to research universities.
Jun 24, 2008 3:04 PM PT
Fifty-one of the country's 60 largest metropolitan areas made gains in tech employment in 2006, the most recent year from which data was available, according to the American Electronics Association, a technology trade group.
The report is the first comprehensive survey on the state of high-tech jobs in cities by the AeA since 2000 -- just prior to the dotcom bust. The organization looked at employment, wages, payroll, establishments, employment compensation and wage differentials in the top 60 metropolitan areas in the U.S.
San Jose, Calif./Silicon Valley led the nation with the highest concentration of tech workers -- more than one out of every four private-sector workers in the Valley worked in the tech industry in 2006.
The tri-state area around New York City held the most overall tech jobs with a total of 316,500.
Seattle topped the list of cities that added the largest number of jobs in 2006, packing on 7,800 net jobs in 2006. New York City came in second, adding more than 6,400 jobs; Washington, D.C. added 6,100.
Where the Jobs Are
Joining New York in the top tier of the nation's leading cybercities based on employment are Washington, D.C.; San Jose/Silicon Valley; Boston and Dallas/Fort Worth.
The survey also included cities not commonly associated with technology. Pittsburgh, Pa., perhaps best known for football and steel mills, is a growing tech hub in the mid-Atlantic region. The city came in 10th among medium-sized cities, adding more than 1,500 jobs in 2006 for a total of 91,400. The positions were concentrated in the engineering and research and development (R&D) testing lab sectors.
Baltimore, Md., another city built by the steel industry, increased the number of tech jobs by 1,500 in 2006. The city had the fifth largest workforce in measuring and control instruments manufacturing, employing 8,700 workers, while the bulk, 20,800, worked in the computer system design and related services sector.
"In a larger sense, the reason those particular cities are very strong -- and [that is] definitely true for Baltimore and Pittsburgh -- is the proximity to really fine research universities. That's usually where high-tech companies cluster, because people in the graduate programs at Johns Hopkins, Carnegie Mellon and the University of Pittsburgh really spawn a lot of startup companies that are really fast growing," said Josh James, a senior research analyst at the AeA, told TechNewsWorld.
Other factors driving the creation of high-tech jobs in these cities are the lower cost of living they offer employers and employees.
"In these cities and others like them, the cost of living is much lower, but the standard of living is fairly high. One of the problems Silicon Valley has it that it has one of the highest costs of living in the country. Same with New York and Washington, D.C., Boston and Dallas all have a high cost of living. So you have to pay workers a lot more. So both companies and talent are looking at these mid-level cities where the quality of life is higher," James pointed out.
Supply, Meet Demand
Currently, demand for workers in the tech industry is "high across the board," said Lisa Rowan, an IDC analyst.
"Research I have conducted with recruiters over the last few years [shows that] IT is the No. 1 most pressing need for job candidates -- three years in a row, including 2008," she explained.
Silicon Valley remains the top area in terms of the concentration of technology workers, fueled by the number of vendors needing help, Rowan noted.
"What we're starting to see is an increased need for internal IT people at corporations in all industries and of all sizes. The key driver is the complexity of and speed at which new technology is being introduced," she told TechNewsWorld.
While demand has seen a steady increase, the AeA report also cautions that if changes are not made in the U.S.'s the immigration policies educational system, the supply of workers will continue to decrease, jeopardizing the technology industry in the U.S.
Many high-tech master's degree programs are populated predominantly by foreign nationals, James said. Streamlining the visa process to encourage them to stay in the U.S. after graduation would go a long way to help meet the industry's needs.
"At least half the master's and Ph.D. candidates are foreign nationals. Yet once they [graduate], we make it incredibly difficult for them to stay. We push very strongly for increasing the cap on H-1B visas and streamlining the process for green cards," he explained.
On the education front, cities need to take the lead and create programs that provide a quality education in primary and secondary schools.
"Our competitive slide is a serious issue. We're No. 1 [in the world in technology], but we're feeding off of a past success, not investing in more research and development or the kinds of programs that will get kids interested in math and science, competent in math and science, and encourage them to take to those fields," said James.