Indeed: Tech jobs remain concentrated in 8 cities; Seattle leads nation in growth in tech-job openings

At the Oregon Office of Economic analysis, Josh Lehner comments on trends in tech employment, citing an interesting analysis of job openings.

Over at Indeed, Jed Kolko has a new piece looking at high-tech job postings across the nation. Among the trends he highlights, Jed notes that the eight biggest tech hubs — Austin, Baltimore, Boston, Raleigh, San Francisco, San Jose, Seattle, and Washington D.C. — have tightened their grip on the industry. He writes:

Therein lies a key point about the dynamics of tech hubs: Although the overall share of tech jobs in hub metros has been essentially flat from 2013 to 2017, higher-salary tech jobs have become more concentrated in top-tier tech centers over the past year, while lower-salary tech jobs have dispersed a bit. In other words, tech hubs are keeping their grip where it really counts.

For those of us concerned about reducing the urban-rural divide, Lehner makes a point worth noting. The (job) rich get richer.

I think one key point is the importance of agglomeration, particularly when it comes to these tech hubs. It is hugely beneficial for these companies to locate near one another, develop a strong labor market full of people with these particular skills, enjoy the fruits of knowledge spillovers and so forth. And while tech jobs are being added all over the country, they are not increasingly moving outside of the existing hubs, or at least not yet.

Of the Portland area, he writes,

In terms of the regional outlook, I remain optimistic. The transition that Oregon tech is making in terms of moving from hardware into software is encouraging. Historically Oregon has not had much of a software sector, but it is growing in recent years. These jobs are diversifying our economy and are needed and welcomed. Plus our region’s ability to attract and retain young, skilled workers is a huge advantage. We have even seen a shift toward more young migrants to Oregon with scientific, technical and medical degrees than has traditionally been the case.

However, even with all this good news, our tech jobs are not growing significantly faster than in the rest of the nation.

It’s a good brief discussion, worth your time.

The Indeed report by Kolko also has much to commend it. He asks the familiar question: Where’s the next Silicon Valley? Some argue it’s time to stop asking. Even business leaders in Austin, Texas – one of the eight tech hubs – don’t compare the city to Silicon Valley

Kook writes,

…what is it that really sets Silicon Valley and other vibrant tech hubs apart? It turns out it’s not just the sheer amount of technology-related activity, but also the kind of activity—notably an unusual mix of technology jobs that skews toward high-paying and newly emerging tech occupations.

Tech jobs remain as concentrated in the same big eight US tech hubs as they have been for several years, despite the high cost of housing and labor in these metros. Furthermore, these big eight hubs are tightening their grip: Higher-salary technology occupations are becoming increasinglyconcentrated, while lower-salary technology jobs are dispersing slightly to the rest of the country. In this sense, the US technology jobs landscape is becoming more unequal—yet another example of how the country is becoming increasingly differentiated and polarized.

Seattle, to no one’s surprise, is doing well.

Indeed’s job postings in the first half of 2017 reveal that San Francisco and Seattle, more than any other US metros, share the Silicon Valley pattern of plentiful high-paying and newly emerging tech jobs—cutting-edge occupations like computer vision engineer and machine learning engineer. Seattle is the tech hub with the fastest growth rate in tech-job openings. Two additional hubs, Boston and Austin, have tech-job mixes similar to Silicon Valley’s, but, unlike Seattle, they are not gaining tech-job share.

He makes an important point, relevant to Lehner’s observations about agglomeration and clusters.

Although the overall share of tech jobs in hub metros has been essentially flat from 2013 to 2017, higher-salary tech jobs have become more concentrated in top-tier tech centers over the past year, while lower-salary tech jobs have dispersed a bit. In other words, tech hubs are keeping their grip where it really counts—on higher-salary tech jobs. Only lower-salary jobs are dispersing. 

And to the big question:

So which metro is the next Silicon Valley? The answer is none, at least for the foreseeable future. Silicon Valley still stands apart.

Of course it does.