Tech Cities 1.0 top 25. Washington, DC has emerged as the promising tech city center after San Jose (Silicon Valley) and San Francisco, according to Cushman & Wakefield’s inaugural “Tech Cities 1.0” national report launched today.
A dominating hub for life sciences and government, Washington, DC also serves as a significant outpost for tech companies seeking proximity to policymakers as well as for burgeoning cyber-security investment.
The top 25 tech cities were determined by analyzing the concentration of factors such as talent, capital, and growth opportunity – the key ingredients that comprise a tech stew. The heartiest of these tech epicenters are: 1. San Jose, CA (Silicon Valley); 2. San Francisco, CA; 3. Washington, DC; 4. Boston/Cambridge, MA; and 5. Raleigh/Durham/Chapel Hill, NC.
Cushman & Wakefield created the “Tech Cities 1.0” report to provide greater insight for its clients and industry stakeholders into existing and emerging tech centers that are driving much of today’s U.S. economy.
Ken McCarthy, Cushman & Wakefield’s New York-based Principal Economist and Applied Research Lead for the U.S., states that “tech is in everything” and that people would be left behind if they did not adopt technology and change with that technology.
“Basically every company today is a tech company in one way or another. We’re all using it, we’re using various aspects of tech companies to do various things,” Mr. McCarthy elaborated. “Whether it’s Salesforce as customer relationship management, or Workday for HR, and various other database programs, the old way of doing business just doesn’t work anymore.”
Report co-author and Regional Director, Northwest U.S. Research at Cushman & Wakefield, in San Francisco, Robert Sammons, said that while it was not surprising to see San Jose (Silicon Valley) and San Francisco continue to dominate, that mass-transit issues and escalating housing costs in those areas have fanned a tech spillover into secondary markets such as Austin (no. 7), Denver (no. 8), San Diego (no. 9), and Salt Lake City (no. 24).
Remarking on Seattle’s number six ranking, Mr. Sammons said, “It’s certainly one of the biggest, if not the biggest competitor to Silicon Valley and San Francisco. Seattle is an interesting case because it was driven by Microsoft early on, which endures, and now Amazon is huge in the downtown area and it continues to be significant.”
He pointed to tech titan Google, which continues to spread its wings outside of Silicon Valley, for opening operations in Seattle to entice the existing talent pool.
Mr. Sammons cited Seattle’s cost-of-living as a lingering issue, somewhat mitigated by a recent uptick in residential development that’s outpacing San Francisco’s, as well as mass transit challenges.
“Seattle has played catchup over the past few years but with housing creation now outpacing that of the Bay Area and with a huge $54 billion transportation initiative that recently passed at the ballot box, it will likely allow it to compete much more aggressively with those markets at the very top of the list.”
To many startup and tech community workers around the world, it may be surprising to see New York (no. 15) and Los Angeles (no. 18) so far down the list.
“In the case of New York, when we started to see a growth in tech employment here about four or five years ago, one of the big issues for the companies coming to New York, particularly from San Francisco or Silicon Valley, was a lack of the skilled labor force they needed, particularly engineers,” Mr. McCarthy said.
“Now what we’re seeing in response to the growth in the TAMI sector has been an increase in investment by local universities in engineering and tech schools. All the local universities recognizing the need have begun to invest in these areas of education, and as a result you’re getting more of a tech-savvy, talented workforce. These things tend to feed on themselves, and I would expect that if we did this ranking three or four years from now, it might look a little different for New York.”
In terms of Los Angeles, both Mr. McCarthy and Mr. Sammons noted its exceptionally diverse economy.
“Media is important, and you can’t lose sight of the fact that historically it’s also been an important manufacturing and industrial center,” Mr. McCarthy said, “There are myriad industries centered in LA, which has a good talent pool, and I would expect that also will come into play as we start to see these things evolve.”
“Los Angeles is a market that’s just enormous, it’s sprawling. And tech, even though it gets a lot of press for LA and Southern California, kind of gets lost in the mix because of media and entertainment. With Snap and other tech companies centered along “Silicon Beach” and with media and entertainment becoming even more tech-oriented, LA has nowhere to go but up,” Mr. Sammons said.
Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and live. Our 45,000 employees in more than 70 countries help occupiers and investors optimize the value of their real estate by combining our global perspective and deep local knowledge with an impressive platform of real estate solutions. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $6 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. 2017 marks the 100-year anniversary of the Cushman & Wakefield brand. 100 years of taking our clients’ ideas and putting them into action.
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