Coastal Tech Hubs Reign, But Smaller U.S. Cities Offer an Edge

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The San Francisco Bay Area and Boston are likely at the top of the list of U.S. regions to work for tech job seekers. But for techies interested in building the next generation of autonomous cars or supersonic jets, smaller cities may offer better opportunities.

Job-seekers have good reason to search outside the top tech hubs because smaller centers have less competition, lower costs and offer a different mix of jobs, according to a new study by job-search website operator Indeed Inc.

Indeed’s study largely aligns with new U.S. Census Bureau data population movement trends. “One interesting trend we are seeing this year is that metro areas not among the most populous are ranked in the top 10 for population growth,” said Sandra Johnson, a demographer in the bureau’s Population Division.

Aside from the top eight tech hubs, which Indeed defined as metros with at least 1 million people where tech jobs account for a high share of total jobs, several smaller areas stood out.

Robotics engineering jobs were prevalent in Pittsburgh, where Carnegie Mellon University is well known for its programs in science and technology, and Detroit, where autonomous vehicle technology is being developed.

Aerospace engineering jobs were common in places like Huntsville, Alabama or Lexington Park, Maryland, which boasts the country’s second-highest average weekly earnings after behind Silicon Valley, according to data from the Bureau of Labor Statistics. The Lexington Park area has the nation’s highest concentration of aerospace engineer positions.

In these smaller cities, job seekers can have the advantage because there are less people vying for the same spot. Still, the major tech hubs, in particular the Bay Area and Austin, continued to see an uptick in their share of tech workers.

Jobs tend to spread out as industries mature, “but they’re still at the stage for many parts of the tech industry that the main clusters are where the action is, in particular the higher-paid, faster-growing tech jobs are especially concentrated in those big tech hubs,” said Jed Kolko, chief economist at the Indeed Hiring Lab.

The study results are consistent with the findings of Massachusetts Institute of Technology economists Simon Johnson and Jonathan Gruber who identified 102 potential places which could develop into tech hubs if they received significant public investment. Topping their list of potential hubs are Pittsburgh, Columbus, Ohio, and Rochester and Syracuse in New York.

“You need to boost spending on R&D to boost growth, and I think you get a better bang for your dollar away from the high-real-estate places like New York City or San Francisco,” Johnson said in an interview.

While the concentration of jobs in coastal tech hubs is unlikely to be diluted any time soon, a survey of venture capital investors by the University of San Francisco found that confidence in the Bay Area’s entrepreneurial environment has fallen to a post-recession low.

To contact the reporter on this story: Shelly Hagan in New York at shagan9@bloomberg.net

To contact the editors responsible for this story: Alex Tanzi at atanzi@bloomberg.net, Jeff Kearns

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