Strong Demand for Tech Services During Pandemic Reinforces Resilience, Importance of Tech-Talent Hubs, According to CBRE's Annual 'Scoring Tech Talent' Report
Demand for many tech services has grown during the COVID-19 pandemic, helping North American tech talent to prove resilient amid economic uncertainty. This signals that the pandemic is unlikely to derail the growing importance of tech-talent hubs, ranging from long-time cornerstones such as the San Francisco Bay Area and Washington, D.C., to smaller, emerging clusters in Huntsville, Ala., and Quebec City, Quebec, according to CBRE's annual Scoring Tech Talent report.
Tech-talent occupations are more resilient than most others because employers are reluctant to let go of coveted tech skills when tech services are in high demand. Tech employment has shown it can withstand economic shocks: In the 2008-2010 recession, tech-talent employment declined by 0.5 percent while overall U.S. employment registered a 5.5 percent drop.
"We expect that most tech-talent hubs and professions will thrive after the pandemic subsides, and many that facilitate remote work, ecommerce, social media and streaming services may have even greater growth opportunities accelerated by the COVID-19 disruption," said Colin Yasukochi, Executive Director of CBRE's Tech Insights Center. "Markets that have strong innovation infrastructure - leading universities and high concentrations of tech jobs - will lead the next growth cycle."
CBRE defines tech talent as 20 tech-focused occupations found in all industry sectors, including software developers, programmers, and computer and information system managers. CBRE ranks the top 50 markets in its annual Tech Talent Scorecard by assessing 13 metrics on a weighted basis, including tech-talent supply, concentration, cost, completed tech degrees and real estate costs.
CBRE's annual ranking of the top 50 tech-talent markets in the U.S. and Canada is led for the eighth year by the San Francisco Bay Area. Washington, D.C. leapfrogged to No. 2 on the momentum of several years of growth after federal budget sequestration in 2013.
Several markets outside the top 10 climbed in the rankings for various reasons. The biggest gainers are Ottawa, Ontario; and Orange (News - Alert) County, Calif. Both ascended five spots to Nos. 14 and 21, respectively. Ottawa benefits from its high concentration of tech talent and Canada's relatively lower costs. Orange County rose on slight gains in talent growth, tech-talent concentration and tech-degree completions relative to its closest-ranked peers. Other climbers include Baltimore (No. 11), Columbus (No. 24) and Newark, N.J. (No. 25), each of which improved its ranking by three spots.
For the second year, CBRE ranked the 'Next 25' up-and-coming markets outside of the top 50, such as the Waterloo region of Ontario and Omaha, Neb. These smaller markets are ranked by a narrower set of eight criteria for tech employment, growth, wages and education. Smaller markets such as these have supplemented tech-talent expansion, which has grown by 17 percent in the past five years to 5.4 million jobs in the U.S.
New this year is CBRE's list of the top 10 tech-talent markets in Latin America, led by Sao Paolo, Brazil; Mexico City; and Santiago, Chile.
CBRE analyzed and compared real estate costs and wages across markets to identify the most affordable, the most expensive and the best bargains for cost vs. labor quality. For example, the most expensive market for a 500-person tech company leasing 75,000 sq. ft. is the San Francisco Bay Area at $62 million a year. The least expensive in the top 50 tech-talent markets: Montreal at $29.6 million.
"Tech-talent workers are the ones that have made it possible for us to remain productive during our crash course this year in remote working," said Lexi Russell, CBRE Director of Research & Analysis and co-author of Scoring Tech Talent. "This might entice more companies to distribute their workforce more broadly by branching into tech-talent markets outside the top 50, or even outside the top 75."
To view individual market statistics and rankings, including rankings on the Scorecard, access CBRE's Tech Talent Analyzer.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world's largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com. We routinely post important information on our website, including corporate and investor presentations and financial information. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in the Investor Relations section of our website at https://ir.cbre.com. Accordingly, investors should monitor such portion of our website, in addition to following our press releases, Securities and Exchange filings and public conference calls and webcasts.
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