Skip navigation
tech-workforce.jpg Hinterhaus Productions/Stone/Getty Images

The Next 25 Tech Markets Primed for Growth

The rise of remote and flexible work options will likely present unique opportunities in smaller markets in the U.S. and Canada.

As more companies offer their employees remote and flexible working arrangements, local and multi-market tech talent employers have an opportunity to grow their tech talent teams and develop a more diverse and talented workforce by expanding into untapped markets.

While established tech hubs like San Francisco, Seattle and Toronto maintain a steady inflow of tech workers, the rise of remote and flexible work options will likely present unique opportunities in smaller markets throughout the U.S. and Canada.

CBRE’s 2021 Scoring Tech Talent report identified 25 promising tech talent markets that offer strong labor market fundamentals and growth opportunities for companies—especially those seeking to capitalize on a newly mobile and flexible workforce. Lower labor costs and high concentrations of tech workers propelled these 25 less established markets into CBRE’s 2021 tech talent rankings.

As companies and workers favor more flexible work arrangements, the costs and benefits of exploring smaller markets will likely enlarge the geographic range of tech talent supply and demand. Expectations are that the following COVID-induced trends will last well after the pandemic is over and fuel growth opportunities in these Next 25 Tech Markets.

Mobile & aging millennials moving to smaller markets

Tech workers have greater control over where they live and work today. While the office will remain the central work environment, flexible arrangements like remote working and hub-and-spoke locations will likely allow workers to capitalize on their increased mobility.

Markets like Colorado Springs, Stamford, Conn. and Trenton, N.J. all boast strong tech wage to cost-of-living ratios, as well as total employment costs that are well below those of top tech markets. The increasing inflow of millennials to suburban markets likely buoys their appeal for retaining and attracting workers.

Suburban migration patterns, especially among older millennials, indicate an emphasis on less dense markets with lower housing costs. Recent inflow of millennial workers to Tucson, Ariz., Boise, Idaho and Las Vegas may accelerate in the coming years as housing costs in core tech markets continue to rise.

Tech graduates in smaller markets continue to grow

North America’s largest tech markets also require the largest inflow of out-of-area tech talent. Incentivizing the migration of talented workers has proven costly, while emphasis on tech degrees and tech research funding at universities continues to climb.

Many markets with less established tech industries but proximity to leading tech universities will likely benefit from their in-place talent pipelines in the coming years. Markets like Buffalo, N.Y., Providence, R.I., Des Moines, Iowa and Albany, N.Y. each had nearly 2,000 graduates with tech degrees from local universities in 2019, while Dayton, Ohio saw one of the largest increases in National Science Foundation funding for engineering research in the nation.

More flexible work options and decentralized office strategies will likely lower the cost of expanding into smaller, talent-laden markets as occupiers seek to find tech talent at the source.

Increasing investment in tech talent by other industries

Over 60 percent of tech talent works in non-tech industries that increasingly rely on technology within their business operations. Automobile, health care and financial services industries have significantly increased their tech workforces in recent years, while most industries have placed greater emphasis on data analytics for business decision-making.

This broader “technification” of traditionally non-tech industries has increased the demand for tech talent in many of the Next 25 Tech Markets. For example, the “technification” of Des Moines’ insurance and finance cluster has become an engine of economic growth for the region. Huntsville’s historic aerospace industry has opened the doors for high-tech manufacturing, resulting in one of the most tech-dense labor forces in America. At 8.9 percent, Huntsville has a higher share of tech talent than more established markets like Seattle and Washington, D.C.

Budding tech ecosystems often begin around core industries, but can quickly flourish as start-ups and spin-offs that foster more innovation.  

A more widely dispersed labor pool

North America’s top tech markets continue to grow rapidly, but a more mobile and remote-enabled workforce means more opportunity to find new talent.

The budding tech ecosystems of North America’s Next 25 Tech Markets are unlikely to supplant the inflow of talent to core tech markets, but innovation exists and thrives in these smaller markets.

Affordable metros, college towns and more tech talent demand by traditionally non-tech industries will fuel an abundant labor supply for multi-market and remote-work-enabled employers.

Nolan Watson is a CBRE senior research analyst based in Seattle. Colin Yasukochi is executive director of CBRE’s Tech Insights Center in San Francisco.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish