The tech boom is here, and it’s heating up. Over the past decade, the tech industry has created more than 1 million jobs across the United States. Between 2010 and 2017, tech-related job growth averaged 6% – more than four times the national average across all industries. Though the figures slowed slightly in 2018, the tech industry still boasts twice the national growth average at approximately 4%. What’s causing this growth, and where are tech hubs emerging from the woodwork? Today’s graphic, which uses data from the 2018 Tech-30 report from CBRE Research, offers a job-focused snapshot of the mammoth tech industry.
Which markets are hot or not?
Using job growth measures in various cities over two-year periods, CBRE identifies which cities’ tech markets are on the rise, and which are slowly declining. Montreal, St. Louis, and Seattle have shown the most momentum over 2016/2017, gaining 23%, 22%, and 8% growth respectively over the previous two-year period. Interestingly, cities like New York, Chicago, and even Silicon Valley have seen a drop in growth over the past two years, while San Francisco and Phoenix are at the bottom of the list with job growth falling by more than 25%. It’s worth noting many of these markets still exceed the 9.2% US average of high-tech job growth, but overall momentum is in decline. Here’s the full list of cities, along with their comparative data:
Expanding the tech footprint
As the tech job growth has boomed, so have real estate prices, particularly in prime areas favored by tech startups nationwide. In Seattle alone, the asking price for office rentals has increased by 14% over the last two years. In response, technology firms have started to diversify their presence across the United States. By expanding their office space away from established headquarters, firms benefit from preferential rental rates and the talent pool that comes with a geographically distributed workforce. Over the past five years alone, the top four tech hubs – San Francisco, Seattle, Boston, and New York City – have exported more than a combined 25 million square feet of office space to other markets. The silver lining to this tech expansion? If you aspire to a career in technology, you might not have to stray as far as Silicon Valley to get your foot in the door.
Next 10 tech markets to watch
With the tech hubs spreading across North America, a peek at 2018’s high-tech employment figures suggests which cities are on the rise. These are the cities flagged as the next ten tech markets to watch, based on tech industry growth and affordable office rent:
on Today’s chart measures the extent to which 41 major economies are reopening, by plotting two metrics for each country: the mobility rate and the COVID-19 recovery rate: Data for the first measure comes from Google’s COVID-19 Community Mobility Reports, which relies on aggregated, anonymous location history data from individuals. Note that China does not show up in the graphic as the government bans Google services. COVID-19 recovery rates rely on values from CoronaTracker, using aggregated information from multiple global and governmental databases such as WHO and CDC.
Reopening Economies, One Step at a Time
In general, the higher the mobility rate, the more economic activity this signifies. In most cases, mobility rate also correlates with a higher rate of recovered people in the population. Here’s how these countries fare based on the above metrics. Mobility data as of May 21, 2020 (Latest available). COVID-19 case data as of May 29, 2020. In the main scatterplot visualization, we’ve taken things a step further, assigning these countries into four distinct quadrants:
1. High Mobility, High Recovery
High recovery rates are resulting in lifted restrictions for countries in this quadrant, and people are steadily returning to work. New Zealand has earned praise for its early and effective pandemic response, allowing it to curtail the total number of cases. This has resulted in a 98% recovery rate, the highest of all countries. After almost 50 days of lockdown, the government is recommending a flexible four-day work week to boost the economy back up.
2. High Mobility, Low Recovery
Despite low COVID-19 related recoveries, mobility rates of countries in this quadrant remain higher than average. Some countries have loosened lockdown measures, while others did not have strict measures in place to begin with. Brazil is an interesting case study to consider here. After deferring lockdown decisions to state and local levels, the country is now averaging the highest number of daily cases out of any country. On May 28th, for example, the country had 24,151 new cases and 1,067 new deaths.
3. Low Mobility, High Recovery
Countries in this quadrant are playing it safe, and holding off on reopening their economies until the population has fully recovered. Italy, the once-epicenter for the crisis in Europe is understandably wary of cases rising back up to critical levels. As a result, it has opted to keep its activity to a minimum to try and boost the 65% recovery rate, even as it slowly emerges from over 10 weeks of lockdown.
4. Low Mobility, Low Recovery
Last but not least, people in these countries are cautiously remaining indoors as their governments continue to work on crisis response. With a low 0.05% recovery rate, the United Kingdom has no immediate plans to reopen. A two-week lag time in reporting discharged patients from NHS services may also be contributing to this low number. Although new cases are leveling off, the country has the highest coronavirus-caused death toll across Europe. The U.S. also sits in this quadrant with over 1.7 million cases and counting. Recently, some states have opted to ease restrictions on social and business activity, which could potentially result in case numbers climbing back up. Over in Sweden, a controversial herd immunity strategy meant that the country continued business as usual amid the rest of Europe’s heightened regulations. Sweden’s COVID-19 recovery rate sits at only 13.9%, and the country’s -93% mobility rate implies that people have been taking their own precautions.
COVID-19’s Impact on the Future
It’s important to note that a “second wave” of new cases could upend plans to reopen economies. As countries reckon with these competing risks of health and economic activity, there is no clear answer around the right path to take. COVID-19 is a catalyst for an entirely different future, but interestingly, it’s one that has been in the works for a while. —Carmen Reinhart, incoming Chief Economist for the World Bank Will there be any chance of returning to “normal” as we know it?
