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Fifty of the largest markets by number of tech talent professionals in the U.S. and Canada were analyzed to create a scorecard ranking them comparatively (Figure 3).

Figure 3: Tech Talent Scorecard Ranking

Source: CBRE Research, CBRE Econometric Advisors, U.S. Bureau of Labor Statistics, Statistics Canada, Oxford Economics, The National Center of Education Statistics, National Science Foundation, Axiometrics, 2023.

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The scorecard uses 13 metrics to measure each market’s depth, vitality and attractiveness to companies seeking tech talent and to tech workers seeking employment. Each metric is weighted by its relative importance to job creation and innovation. Tech talent concentration metrics have the highest weights because they signify clustering of tech workers. Labor costs for tech talent are weighted more heavily than office rents because companies allocate more capital to labor than to real estate.

The top five markets were the same as last year: San Francisco Bay Area, Seattle, New York Metro, Washington, D.C. and Toronto. New York moved up to No. 3 and Toronto moved down to No. 5. Markets that moved up the most were Calgary (+7 spots), Canada's Waterloo Region and St. Louis (+6), Madison (+5) and Quebec City (+4). Markets that moved down the most were Columbus (-6 spots), Minneapolis/St. Paul (-5) and Pittsburgh, Edmonton and Cleveland (-4).

As companies across all industries expand their technology usage, there is high demand for tech talent in both large and small markets. Major gateway markets dominate overall tech talent growth because of their size. These and other markets with tech talent labor pools of more than 50,000 workers are categorized as “large,” while those below this threshold are categorized as “small” (Figure 4). Both large and small markets have their advantages: While large markets generally have a deeper pool of talent, small markets typically offer business and cost-of-living savings. Between 2017 and 2022, the San Francisco Bay Area added the most tech talent jobs (75,020), followed by Toronto (63,800) and Montreal (51,500). Markets with the highest tech job growth rates were Vancouver (69%), Calgary (61%) the Waterloo Region (52%) and Edmonton and Madison (45%).

Tech talent concentration—the percentage of total employment—is an influential factor in how “tech” the market is and in its growth potential. Tech talent comprises 13.3% of total employment in Ottawa and 11.6% in the San Francisco Bay Area—the highest concentrations and more than double the 50-market average of 5.6%. Canada's Waterloo Region at 10.1% of total employment and Toronto and Seattle at 9.5% round out the top five most concentrated tech markets.

Figure 4: Tech Talent Workforce by Market (2022)

*2017-2022; **2022
Source: U.S. Bureau of Labor Statistics (Metro) April 2023, Statistics Canada (Metro), 2022.
Note: Canadian markets have been recalculated based on revisions to Statistics Canada definitions.

Tech talent concentration by industry is another influential factor for tech employers and tech cluster formation. While many technical skills are transferable across industries, specific industry experience can help to enhance innovation. Approximately 40% of tech talent in both the U.S. and Canada works within the tech industry. By market, this concentration varies considerably even though the tech industry was the largest tech talent employer in all but three of the top 50 markets. The San Francisco Bay Area, Seattle and Austin had the highest concentrations of tech talent within the tech industry (Figure 5), while Charlotte, Cleveland and Jacksonville had the lowest.

Figure 5: Tech Talent Workforce by Industry (2022)

Note: FIRE stands for Finance, Insurance, Real Estate.
Source: U.S. Bureau of Labor Statistics (Metro), Statistics Canada (Metro), CBRE Research and IPUMS, May 2023.
* Tech industry does not have the highest percentage of tech talent employment in Ottawa, Charlotte and Jacksonville.

Certain markets had high concentrations of tech talent in non-tech industries, including Ottawa (42%) and Sacramento (30%) in government, and Jacksonville (30%), Charlotte (28%) and Hartford (28%) in finance, insurance and real estate.

Traditionally, tech companies often based location decisions on which markets had the most available tech workers. Today, tech employers are more interested in attracting people with specific tech skills, which often command higher wages. This poses a challenge for non-tech employers when recruiting tech workers. Tech companies pay wages about 16% above the U.S. average, which equates to a 30% premium over non-tech employers, and have more workers earning over $150,000 per year than other industries.

Average tech talent wages are highest in the San Francisco Bay Area and Seattle, and lowest in Indianapolis, South Florida and Cincinnati.

Figure 6: Average Annual Wage for U.S. Tech Talent by Industry (2021)

Source: U.S. Census, IPUMS and CBRE Research, March 2023.
Note: FIRE stands for Finance, Insurance, Real Estate.

Software engineers are also highly concentrated in the tech industry and in certain markets. In the U.S., 50% of all software engineers work within the tech industry. The San Francisco Bay Area (77%) surpassed last year’s top market Seattle (76%) with the highest concentration of software engineers working in the tech industry. Austin, Portland and Madison also saw high concentrations, each above 64%.

Figure 7: Average Annual Wage for U.S. Tech Talent Employed by the Tech Industry (2021)

Source: U.S. Census, IPUMS and CBRE Research, March 2023.

Figure 8: Top 10 Markets for Software Engineers Employed in the Tech Industry (2021)

Source: U.S. Census, IPUMS and CBRE Research, April 2023.

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