Tech jobs have dispersed during the pandemic, but future dispersion isn’t guaranteed

The big coastal cities “superstars” of the tech industry aren’t going anywhere. This is Brookings Metro’s first takeout new look to the geography of the tech sector as it weathered the COVID-19 pandemic.

With reports of technicians working remotely head for the hillsmany experts have predicted that the Bay Area and other tech superstars would become ghost towns. And indeed, California tech giants such as google, Apple, Palantizeand Intel move work to new locations such as Denver, Raleigh, North Carolina and ColumbusOhio.

But even so, the initial story we see is one of continued superstar dominance. Globally, the eight tech superstar cities (San Francisco; San Jose, CA; Austin, TX; Boston; Seattle; Los Angeles; New York; and Washington, DC) represented half job creation in the country’s tech sector in the first year of the pandemic. Moreover, these superstars slightly increase their share of total national tech employment in 2020, even as hopes rose for a greater dispersion of tech work.

Overall, tech remains fundamentally a “win-win” employment sector, even amid widespread disruption, including the nationwide explosion of remote working.

And yet, for all that, our new analysis job creation in six key high-tech industries during the pandemic surface genuine signs that technological work could to be begins to spread.

On the one hand, job growth in the technology sector among the eight superstars slow motion in 2020 in all but one (New York), while in many smaller places it increase. Often far from shore and less established as tech hegemons, these new markets are showing, at least for now, a wider spectrum of tech growth, including:

  • A group of nine increasingly important “rising stars” have grown as fast as the superstars in 2020. Especially indoors or Sun Belt, rrising stars Atlanta, dallas, denver, Miami, Orlando, Florida, San Diego, Kansas City, Missouri, St. Louisand Salt Lake City all gained ground in the first year of the pandemic. Overall, these cities added a combined 14,000 tech jobs to their core ecosystems and slightly increased their overall share of the country’s tech sector. Dallas, Atlanta, Denver and St. Louis all added tech jobs at annual growth rates above 3%. And St. Louis has seen its technology growth rate increase from 3.9% over the 2015-2019 period to 4.8% in 2020. Some of these metropolitan areas are showing a dynamism that puts them on the verge of “superstar” status. .
  • Several regional trade hubs across the country (including the core) saw tech sector growth rates increase in 2020 compared to 2015-2019. These centers included northern business towns such as philadelphia cream, Minneapolisand Cincinnati as well as large cities with warm climates such as Charlotte, CN, San Antonio, Nashville, Tennessee, Birmingham, Alabama., Albuquerque, New Mexico, New Orleans, Greensboro, North Carolina, El Paso, TX, and Jackson, miss. Cities like these likely participated in the rapid “digitalization” of the economy in the first year of the pandemic, as many industries shifted more of their operations to the internet. Overall, nearly half of the country’s major secondary metropolitan areas added tech jobs at a faster rate than in 2015-2019, while only one superstar did.

  • Numerous small quality-of-living meccas and college towns dubbed “Zoom cities” in first year of pandemic. Among the first group, high-convenience coastal cities such as Santa Barbara, California., Gulfport-Biloxi, Miss.and Salisbury, MD. all saw their employment in technology increase by 6% or more, while Barnstable, Mass. and Pensacola, Florida. saw their tech communities grow by more than 3%. These locations offered proximity to major technology centers in addition to an attractive quality of life for businesses and remote workers. Likewise, attractive and convenient university towns such as Boulder, Colorado., Madison, Wis., Lincoln, Neb., Charlottesville, Virginia., Tallahassee, Florida.and Ithaca, NY all increased their tech jobs by more than 3% in the first year of the pandemic. Job increases in small towns like these likely reflected the at least temporary employment of local or mobile technicians whose work relied on digital tools.

In summary, even as tech superstar metropolitan areas persist in their dominance, scattered signals suggest that tech work has expanded quite a bit in the first year of the pandemic. Confirming the impression, more recent data points from information on city-by-city job postings and new business start-ups. Far from definitive, the new information provides real, at least temporary, evidence of what AOL co-founder and investor Steve Case calls “the rise of the rest”— the spread of technological activity in the heart of the country.

Whether these mixed signals represent more than short-term disruption will depend on the broader dynamics of the technology. For example, if remote work fades or is subsumed by “hybrid” work with a significant connection to offices, the spread of tech work in small towns will subside.

Meanwhile, the urgency of Big Tech’s relentless search for talent, especially diverse talent, could play an even bigger role on the future geography of the industry. Tech companies have previously pledged to narrow their persistent talent and diversity gaps, including moving beyond their extreme concentrations on the coasts. If in the next few years these companies target new talent in new places by expanding their presence in metropolitan areas away from the usual superstars, that in itself could change the current narrow geography of technology. The hirings associated with the new Google and Apple satellite offices already announced in the Southeast could alone be the difference.

Either way, it remains difficult to analyze whether the pandemic turns out to be a one-time disruption or a real inflection point leading to decentralization. Future spread of the technology to more places is possible, but the superstars remain entrenched.

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