By Chris Engle, Principal
The Technology industry has become one of the most dominant drivers of the US economy today, as it permeates more aspects of consumer life and business strategy. An urgency now exists for communities to develop their best technology workforce to ensure competitiveness – both for their local companies and their communities. Still, despite low levels of unemployment, many fear a future in which technology and automation starts to displace workers at levels never before seen, putting economic developers’ job creation mandate in peril. When Marc Andressen famously said that “Software is eating the world” in 2011, he could have finished with “…and is coming to eat your lunch.”
In this article, we review trends in new technologies and how they are changing the competitive landscape for technology producers and the communities that house them. We also examine trends in technology workforce, both where they are located today and where top technology graduates are being generated. Finally, we offer strategic insights to economic developers to ensure their communities are on the winning side of technology.
TECHNOLOGY TODAY AND TOMORROW
The technology industry is advancing rapidly – maybe more rapidly than seen since the mid-1990s tech boom. Continued improvements in cloud-based technologies and data analytics will guide the new Internet of Things into maturity. Now, rapid advancements in Artificial Intelligence (AI) aim to permeate all manners of business and consumer activity. While in development for decades, AI has found renewed acceptance as a transformative technology that is just beginning to benefit from high-speed computing and the booming amount of meta data. Industries from Financial, Health, Automotive, and Cyber Security are racing to use AI as a new layer in their business process and product development.
Regardless of AI’s rate of adoption, the relationship between hardware and software will be forever changed. More and more of our daily lives will be run through a smartphone app, or via voice-recognition services (currently in a very early stage). All of these future devices and services will need highly dynamic teams of workers to design, build, support, and serve the customer base. As such, the demand for technology workers is at an all-time high and will remain high for many years.
DEVELOPING AND ATTRACTING A TECHNOLOGY WORKFORCE
Today, there are nearly 12 million technology workers in the US according to CompTIA. This value includes 7 million workers inside technology companies as well as another 5 million STEM workers (non-health) working across all other industries. Most growth in the technology workforce is at IT companies and within the IT workforce.
Most new jobs for Computer, Math, and Engineering workers are still being created in the usual major metros: San Francisco, San Jose, New York, and Seattle. But, would you be surprised to hear that Dallas-Fort Worth ranked 5th in technology workforce expansion from 2012-2017? Detroit has seen a strong rebound (helped by resurgent auto sales), and Austin, Charlotte, and Raleigh grew their technology workforce nearly 30% in five years (see side chart).
While a growing technology workforce is an indication of new potential labor for hire, another indicator is the output of college graduates from major universities. Again, New York and Boston deliver large numbers of graduates in Computer, Software, Engineering & Science (not including Health). But, places like Los Angeles, Washington DC, and Dallas-Fort Worth have grown their graduating classes significant in recent years. Salt Lake City has more than doubled its STEM graduates in the past five years. Learn from institutions in these regions on how to grow technology programs in your own community.
With unemployment rates near zero for technology workers today, companies will likely look toward smaller markets to find workers. Ogen, UT outside of Salt Lake City had the fastest-growing IT workforce over the last five years, followed by Madison, Charleston, Knoxville, and Provo. Mid-sized metros with the fastest growing Engineering workforce are Winston-Salem, Provo, and Ogden. Clearly, as Steve Case believes in the “Rise of the Rest”, we may start to hear of new technology powerhouses – small but mighty metros in middle America.
Communities can learn much on how to attract a technology workforce from Amazon’s HQ2 site search. If you believe that technology and data will be the defining characteristic of winning companies (like I do), why not invest in assets viewed favorable by one of the largest and fastest growing technnology companies in the world? Amazon’s priorities are clear: markets that are growing their workforce, with a research university, attractive to millennials, and have a plan for dense multi-modal development. Many on their Top 20 short list are not surprises, but consider how up-and-comers like Columbus, Indianapolis, Charlotte, and Atlanta are re-defining what a technology hub will look like.
While many technology companies search for the best workers at any price, costs do play an important role in site selection for most companies. Finding cities that can attract workers, even if they are expensive is one method. San Francisco will always attract the ambitious worker, but places like Austin attract workers that want to be able to afford a house (for now). Smaller metros like Indianapolis and Chattanooga are promoting their cities to a creative workforce that can earn a good salary and live well and affordably.
A PLAN FOR THE FUTURE
Ultimately, companies choose to invest in communities that have a plan for the future that aligns with their own corporate vision – and who invest in their future. Collaboration will be critical in future place-making, as technology takes a greater hold of our economy and our cities. Quite possibly, the winners of tomorrow will be smart cities organized around the Internet of Things, powered by autonomous vehicles, verified by block chain, and hyper-linked across social media. The question is: what will your community’s vision look like?