Chapter 3
Which are the top-ranked tech talent markets?
Scoring Tech Talent 2022
8 Minute Read
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 11.6% of total employment in Ottawa and 11.4% in the San Francisco Bay Area—the highest concentrations and more than double the 50-market average of 5.6%. Toronto, Seattle and Canada's Waterloo Region round out the top five most concentrated tech markets, ranging from 9.6% to 10.3% of their total employment. This sizeable concentration of highly skilled workers offers an environment conducive to innovation.
Figure 3: Tech Talent Workforce (2021)
*2016-2021; **2021
Source: U.S. Bureau of Labor Statistics (Metro) April 2022, Statistics Canada (Metro), 2021.
Note: Canadian markets have been recalculated based on revisions to Statistics Canada definitions.
Between 2016 and 2021, Toronto had the most tech talent growth (+88,900 jobs), followed by Seattle (+45,560) and Vancouver (+44,460).
Ottawa and the San Francisco Bay Area had the highest concentrations of tech talent, more than double the 50-market average of 5.6%.
Tech talent concentration by industry within markets is another influential factor for tech employers and tech cluster formation. While many technical skills are transferable across industries, specific industry experience can be a differentiator to enhance innovation. In the U.S., 41% of tech talent works within the tech industry. By market, this concentration varies considerably even though the tech industry was the largest tech talent employer in all 42 U.S. markets. The San Francisco Bay Area, Seattle and Raleigh-Durham had the highest concentrations of tech talent within the tech industry (Figure 4), while Columbus, Pittsburgh and Charlotte had the lowest.
Figure 4: Tech Talent Workforce by Industry (2021)
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, 2022.
Note: Canadian markets have been recalculated based on revisions to Statistics Canada definitions.
Certain markets had high concentrations of tech talent in non-tech industries, including finance, insurance and real estate in Hartford (28%), Charlotte (25%), Columbus (24%) and Jacksonville (23%) and government in Sacramento (29%), Baltimore (23%) and Washington, D.C. (20%). Other notable high concentrations were manufacturing in Detroit (18%) and San Diego (15%) and health care in Nashville (16%).
Software engineers are also highly concentrated in the tech industry and in certain markets. In the U.S., 54% of the software engineers work within the tech industry. Seattle (77%), San Francisco Bay Area (75%), Raleigh-Durham (72%), Portland (68%) and Austin (59%) are the most concentrated.
Figure 5: Top 10 Markets for Software Engineers Employed in the Tech Industry (2020)
Source: U.S. Census, IPUMS and CBRE Research, May 2022.
Software engineers are also highly concentrated in the tech industry and in certain markets. In the U.S., 54% of software engineers work within the tech industry. Seattle, San Francisco Bay Area and Raleigh-Durham are the most concentrated markets.
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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 2).
Figure 2: 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, 2022.
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, Toronto, Washington, D.C. and New York, with Toronto moving up one spot to #3. Markets that moved up most in rank were Dallas/Ft. Worth, Philadelphia, South Florida and Milwaukee (+4 spots), and Vancouver, Chicago, Pittsburgh, Orlando, Edmonton and Houston (+3 spots). Austin moved up one spot to the sixth position. Markets that moved down most in rank were Madison (-6 spots) and Raleigh-Durham and Quebec City (-5 spots).
As companies across all industries expand their technology services, 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 3). 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 2016 and 2021, Toronto had the most tech talent growth (+88,900 jobs), followed by Seattle (45,560) and Vancouver (44,460).The highest percentage growth was 63% in Vancouver, 44% in Toronto and 43% in Quebec City. In the U.S., the Inland Empire, Seattle and Nashville grew the fastest on a percentage basis.
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