Each year the commercial real estate firm CBRE publishes their Scoring Tech Talent report which provides a snapshot of the size, growth, quality and affordability of tech talent markets across the U.S. and Canada.
According to the latest report just published this month, there are 6.3 million tech workers of which 5.4 million are in the U.S. representing 3.7% of the U.S. workforce and 900k in Canada accounting for 5.6% of the Canadian workforce. Despite these relatively small workforce shares, this highly skilled segment contributes a much greater impact on our economies through innovations in software and devices and the management of the data and systems that are the foundations for our technology ecosystems.
The top 50 markets in the U.S. and Canada were ranked according to their competitive advantages and appeal to both employers and tech talent using a 13-metric scorecard. The report defines tech talent as highly-skilled workers in over 20 tech market occupations.
Some highlights from the report findings follow:
· The top-ranked market for tech talent was the San Francisco Bay Area, followed by Washington D.C., Seattle, Toronto and New York.
· Southern California markets largely ranked in the top 25 led by San Diego (#19), followed by Orange County (#21) and Los Angeles (#26).
· Canadian markets fared particularly well led by Toronto (#4), Vancouver (#12), Ottawa (#14) and Montréal (#16).
· Markets registering the greatest rise in rankings this year were Ottawa and Orange County, both rising 5 spots.
Tech Talent Concentration
· Ottawa has the highest concentration of tech talent as a percentage of total employment at 11.3% followed by the San Francisco Bay Area at 10.3%.
· Toronto, Montréal and Vancouver all ranked highly at 8.8%, 7.4% and 7% respectively.
· In Southern California, tech holds a smaller share of the labor force at 3.1% in Los Angeles, 4.4% in Orange County and 5.1% in San Diego.
Trends
· Toronto and Vancouver were among the markets that gained the most tech talent.
· Canadian markets in the top 50 who were categorized as “Brain Gain” markets (with more tech jobs added than graduates) included Toronto, Vancouver, Calgary and Montréal with Toronto adding 43,000 more tech talent jobs than graduates.
· “Brain Drain” markets who added fewer tech talent jobs than tech graduates included Orange County, San Diego, Los Angeles, Ottawa, New York and Long Island, NY.
· Among 25 smaller markets, the Waterloo Region in Ontario ranked first. This region recorded total tech talent growth of over 51% over 5 years with a tech community now over 22,000 workers. Québec City ranked #6, Edmonton #9, Halifax #12 and the Inland Empire in Southern California #19.
Market Affordability
· Based on an assessment of labor and real estate costs, the top 50 tech talent markets were analyzed for their affordability based on a 500-employee company requiring 75k square feet of office space.
· The San Francisco Bay Area market ranked as the most expensive market at over $62 million a year of which office rent comprises approximately $5 million.
· All Southern California markets represented more affordable markets with San Diego 23% less expensive, Los Angeles 26% and Orange County 27%.
· The 5 most affordable top tech talent markets were all Canadian – led by Montréal with a saving of over $32 million a year as compared to the San Francisco Bay Area region (a 51% savings). Vancouver, Toronto, Ottawa and Calgary were the remaining 5 most affordable markets.
Both Southern California and Canada offer strong tech markets overall at a significant cost savings in combined labor and real estate costs to the San Francisco Bay Area. The largest Canadian markets of Toronto, Montréal and Vancouver rank highly on the quality of tech talent and the size of their tech communities with above average concentrations of tech talent in the labor force. Each are attracting more talent than they are graduating within their markets too. Smaller markets in Canada and Southern California offer more affordability and growing tech talent communities.
The full report is available for download here.