Tech workers sit around a table on their laptops in San Francisco, California
San Jose and San Francisco lead the pack in share of tech jobs. Gabrielle Lurie/Reuters

Despite established urban tech hubs, some smaller cities are attracting high-tech jobs with lower living costs, unique talent pools, and geographic diversity.

Is high-tech America reaching an inflection point?

The nation’s leading tech hubs in the Bay Area, Seattle, and across the Boston-New York-D.C. corridor have become increasingly expensive, unaffordable, and embroiled in a deepening backlash against big tech. This has led to growing speculation—and increasing action by some tech leaders—around the “Rise of the Rest,” an effort to invest in and bolster the tech ecosystems of up-and-coming hubs like Pittsburgh, Nashville, and Miami, to name just a few.

New research by Jed Kolko, chief economist of job listings website, finds that America’s established tech hubs continue to dominate high-tech employment. His study examines tech jobs in the country’s 51 largest metros (those with more than one million people), based on 2018 data from job postings to, and census employment data from 2015 to 2017.

San Jose, in the heart of Silicon Valley, has the largest concentration of high-tech jobs, which made up nearly of a quarter of all its job postings in 2018. The Washington, D.C., metro was next with 15 percent, then Seattle, San Francisco, Baltimore, Raleigh (in the Research Triangle), Austin, and Boston.

New York’s share of tech job postings ranks 10th, but New York has a diverse economy. “Tech doesn't stand out in New York as it does in those other hubs where tech is a higher share of the local job market,” Kolko told me via email. “The geography of tech employment could differ from the geography of venture funding—with venture funding skewed more toward places like New York that already have a massive financial sector.”

These leading hubs also saw strong growth in tech jobs. The proportion of high-tech jobs grew 10 percent in San Jose, 9 percent in Austin, and 6 percent in Boston. Raleigh and San Francisco had slightly smaller increases, and Seattle saw no change. Washington, D.C., and Baltimore faced declines, though the cities still rank in the top eight of tech job share. Plus, D.C. may rebound as the “winner” of Amazon’s HQ2 sweepstakes.

(Jed Kolko)

America’s eight leading tech hubs account for about a third of all high-tech job postings, a share that increased slightly between 2018 and 2017. In large metros, tech accounts for 6.6 percent of all job postings, double the 3.3 percent share in mid-size metros with between 250,000 and a million people. This, Kolko notes, is a reversal of the previous trend where tech jobs were spreading to other parts of the country.

Despite countless attempts to create the “next Silicon Valley,”America’s leading tech hubs have different specializations and jobs structures. As Kolko notes, “[i]n San Francisco, San Jose, Austin, and Seattle, more than half of local tech jobs were at technology businesses rather than at workplaces like banks, manufacturing companies, or government agencies.” The Bay Area also has an outsized concentration of jobs in fields like artificial intelligence and deep-learning. These jobs were ten times more prevalent in San Jose than nationally, Kolko reports. And while private-sector tech firms dominate the Bay Area, government-related tech jobs accounted for a much greater share of tech jobs in Baltimore and D.C.

Washington, D.C.—Amazon’s choice for HQ2—is the polar opposite of Seattle in terms of types of tech jobs. In fact, as Kolko points out, the two are the most dissimilar tech hubs. “If Amazon had wanted a metro like Seattle for its major expansion, the Bay Area would have come closest,” Kolko writes. “And several metros outside the eight hubs, like Portland, Oregon, and San Diego, looked more like Seattle in tech mix than Washington did.”

The top eight tech hubs also lead in their concentration of the most cutting-edge jobs or what Kolko dubs “hot tech”—jobs with high salaries and rapid growth, like data scientist or cloud engineer. San Francisco had the largest concentration of these hot-tech job postings, making up nearly a fifth of all tech job postings, followed closely by nearby San Jose. Boston, Austin, and Seattle, also had large concentrations of hot tech jobs. But Raleigh, Washington, D.C., and Baltimore were either at or below the national average for these hot tech jobs. Hot-tech jobs were also concentrated in large metros, making up 12 percent of tech job postings there, compared to 6 percent in mid-sized metros.

(Jed Kolko)

Where the rest is rising

So what about the “Rise of the Rest?” Kolko finds that there are, in fact, smaller tech hubs growing outside of the dominant cities, to take advantage of lower costs of living, different talent pools, and geographic diversity.

To capitalize on that talent market, startups increasingly locate in college towns like Boulder, Colorado; Ann Arbor, Michigan; Durham-Chapel Hill, North Carolina (the other pillar of the Research Triangle); and Trenton, New Jersey (which includes Princeton). Other metros tend to offer other unique industries: Huntsville, Alabama, and Palm Bay-Melbourne-Titusville, Florida, are both military or aerospace hubs. And Fayetteville, Arkansas is home to Walmart and the University of Arkansas.

(Jed Kolko)

“The big takeaway is that the established hubs are maintaining their lead. Plus: fast-growing, high-paying tech jobs are especially concentrated in the top hubs,” Kolko notes. “Other metros really haven't broken into their ranks,” he said. “Still, there are plenty of opportunities in tech outside these hubs, including in smaller, more affordable metros across the country.”

While the data do not show it yet, high-tech America may be approaching that inflection point. As the late great political economist Mancur Olson liked to remind us, industry leaders—like Pittsburgh in steel or Detroit in automobiles—ultimately sow the seeds of their own demise. They falter and lose their edge largely as a result of their own self-inflicted wounds, what he called “institutional sclerosis.” Today’s emerging hubs provide substantial cost advantages over these established places and appear far more willing to capitalize on opportunities that come their way. Only time will tell.

CityLab editorial fellow Claire Tran contributed research and editorial assistance to this article.

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