The Great Tech Hub Exodus Didn’t Quite Happen

Last October, a local couple from the small Midwestern town of Greensburg, Indiana, volunteered to be the people’s grandparents upon request. The couple, Tami and Dan Wenning, volunteered to babysit and accompany children to Grandparents Day at the local elementary school in an effort to attract homeworkers to their area. Not to be outdone, the Ozark Mountain town of Bentonville, Arkansas soon began paying free-range workers $10,000 in Bitcoin plus a bicycle to move there. These were the latest in a series of efforts to lure tech workers away from hubs like San Francisco and Seattle to sleepier locations.

If they tried to seed the next Heartland Silicon Valley, they would have done their job for them. New data from the Brookings Institution shows that despite hopes that work from anywhere would thrive during the pandemic, most tech workers didn’t fan out across the country at all. Instead, they remained concentrated in a small but growing group of cities.

In recent decades, high-paying tech jobs in the US have become increasingly concentrated in a handful of cities, contributing to regional economic inequality. The tech sector grew 47 percent in the 2010s, and in the second half of that decade, nearly half of tech job creation took place in eight “superstar” metro areas: San Jose, New York, San Francisco, Washington DC, Seattle. , Boston , Los Angeles and Austin. By the end of the decade, those eight cities accounted for 38.2 percent of tech jobs.

“With the onset of remote work during the pandemic, there was great hope that footloose techs would leave the major coastal hubs, move into the hills and help decentralize technology,” said Mark Muro, a senior fellow at the Brookings Institution who co -author of the new report on the geographical distribution of jobs in the US technology sector.

So has the so-called remote working revolution led to a widespread proliferation of tech jobs? Not really. But it has led to a modest reshuffle.

Nine “rising stars”—Atlanta, Dallas, Denver, Miami, Orlando, San Diego, Kansas City, Mo, St. Louis and Salt Lake City—which are largely inland in the country had their share of tech jobs before the pandemic hit, with an average annual growth rate of 3 percent between 2015 and 2019. Like the superstars, these cities boasted proximity to major universities and an abundance of highly skilled tech workers.

Pandemic-driven telecommuting did little to ease these cities’ stranglehold on jobs. In 2020, the first year of the pandemic, both superstars and rising stars added tech jobs, slightly increasing their overall share. However, the growth rate slowed from about 5 percent pre-pandemic to 2.9 percent in 2020.

“The digital economy has a ‘winner-take-most’ character.”

Mark Muro, Brookings Institute

Instead, 36 other cities recorded stronger growth in tech jobs than before the pandemic. These include northern business centers such as Philadelphia and Minneapolis, major warm-weather cities such as Charlotte, North Carolina, major college towns such as Chapel Hill, and vacation centers such as Virginia Beach. Facility-rich and vacation towns such as Santa Barbara and Barnstable, Massachusetts saw job growth increase by more than 6 percent, while college towns such as Boulder, Colorado and Lincoln, Nebraska grew more than 3 percent.

George Valdes, head of marketing at the architecture software startup Monograph, holds one of these jobs. His wife gave birth to their daughter in June 2020, three months after the company went completely remote. Valdes lived in Oakland, California, where the air quickly grew thick with smoke from wildfires. When this happened, Valdes would drive his family south to stay with his aunt in Los Angeles until air quality improved. “After doing that a few times, we thought, we have to get out of here.”

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