Boston, The Bay Area Are Big Tech Job Winners, But Report Finds There Are Too Many Losers

The Hub of the Universe has also been a hub for U.S. innovation jobs in the last decade, and a new report says the growth is hurting other cities.

Boston is one of five U.S. metro areas — along with San Diego, San Francisco, San Jose and Seattle — that accounted for 90% of all U.S. tech job growth between 2005 and 2017, the Brookings Institution said Monday. These cities have increased their market share on high-tech jobs from 17.6% to 22.8% since 2005. A third of the nation’s top tech jobs are now in only 16 U.S. counties, according to Brookings.

While the tech surge has given an economic boost to the five cities, the report stresses how problematic that is for the rest of the country and called for the federal government to act. 

Technology companies like to cluster together to drive productivity by sharing ideas and a deep pool of local talent. This clustering model boosts company output, but the Brookings study shows it is also creating severe economic inequality. Educated workers flock to major U.S. cities and leave smaller metro areas with shallow pools of talent, causing what the report calls “traps of underdevelopment.” 

In the star U.S. tech cities, costs are soaring and traffic congestion is growing. But because tech talent is significantly concentrated in these markets, companies looking for more value are more likely to go to lower-cost markets abroad like Bangalore, India, or Taipei, Taiwan, over a tech-starved city like Detroit. 

To combat offshore growth, the Brookings research team calls for a federal initiative to build eight to 10 regional tech growth centers across the U.S. and away from existing tech hubs. Estimated to cost $100B in federal spending over 10 years, the Brookings report says it could lead to $700M in research and development funding each year for a decade in each of these new tech markets. 

The report identifies 35 leading metro areas with populations of at least 500,000 for the initiative. While cities like Chicago and Nashville, which won a 5,000-job Amazon operations center out of the HQ2 bidding process, made the cut, so did smaller markets like Madison, Wisconsin, and Boise, Idaho.