Chapter 1
Which are the top-ranked Tech Talent markets?
Scoring Tech Talent 2024
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Fifty of the largest markets by number of tech talent professionals in the U.S. and Canada were analyzed to create a scorecard ranking them comparatively (Figure 4).
The scorecard uses 13 metrics to measure each market’s depth, vitality and attractiveness to companies seeking tech talent and to tech workers seeking employment. Each metric is weighted by its relative importance to job creation and innovation. Tech talent concentration metrics have the highest weights because they signify clustering of tech workers. Labor costs for tech talent are weighted more heavily than office rents because companies allocate more capital to labor than to real estate.
The San Francisco Bay Area, Seattle and New York Metro remained the top three tech talent markets this year. Toronto and Austin each moved up one spot to round out the top five. Washington, D.C. fell two spots to sixth due to slower job growth. Markets that moved up the most within the top 25 were Detroit (+5 spots), Salt Lake City (+4 spots) and Raleigh-Durham and San Diego (+3 spots). Markets that moved down the most were Edmonton, Quebec City and Pittsburgh.
Figure 4: Tech Talent Scorecard Ranking
As companies across all industries use more technology, there is high demand for tech talent in both large and small markets. Major gateway markets dominate overall tech talent growth because of their size. These and other markets with tech talent labor pools of more than 50,000 workers are categorized as “large,” while those below this threshold are categorized as “small” (Figure 5).
Both large and small markets have their advantages: While large markets generally have a deeper pool of talent, small markets typically offer business and cost-of-living savings. Between 2018 and 2023, Toronto added the most tech talent jobs (95,900), followed by the San Francisco Bay Area (68,610) and Dallas-Ft. Worth (46,380). Markets with the highest tech job growth rates were Calgary (78%), Ottawa (52%), the Waterloo Region (46%), Toronto (44%) and Vancouver (31%).
Tech talent concentration—the percentage of total employment—is an influential factor in how “tech” the market is and in its growth potential. Tech talent comprises 12.3% of total employment in both Ottawa and the San Francisco Bay Area—the highest concentrations and more than double the 50-market average of 5.5%. Toronto (10.1%), the Waterloo Region (9.6%) and Seattle (9.4%) rounded out the top five most concentrated markets for tech talent as a share of total employment.
Figure 5: Tech Talent Workforce by Market (2023)
Between 2018 and 2023, Toronto added the most tech talent jobs, followed by the San Francisco Bay Area and Dallas-Ft. Worth.
Figure 6: Tech Talent Workforce by Industry (2023)
* 2022 data
Note: Tech industry does not have the highest percentage of employment in Ottawa and Sacramento. FIRE is an acronym for the finance, insurance and real estate industries.
Tech talent concentration by industry is another influential factor in attracting tech employers. While many technical skills are transferable across industries, specific industry experience can help to enhance innovation. In both the U.S. and Canada, 40% of tech talent works within the tech industry. By market, this concentration varies considerably even though the tech industry was the largest tech talent employer in all but two of the top 50 markets. The San Francisco Bay Area, Seattle and Vancouver had the highest concentrations of tech talent within the tech industry (Figure 6), while Virgina Beach, Cleveland and Richmond had the lowest.
Certain markets had high concentrations of tech talent in non-tech industries, including government in both Ottawa (37%) and Sacramento (31%). Columbus (27%), Charlotte (27%), Quebec City (26%) and Hartford (25%) had relatively high concentrations of tech talent in finance, insurance & real estate.
Traditionally, tech companies often based location decisions on which markets had the most available tech workers. Today, tech employers are more interested in attracting people with specific tech skills, which often command higher wages. This poses a challenge for non-tech employers when recruiting tech workers. Tech companies pay wages about 17% above the U.S. average and have more workers earning over $150,000 per year than other industries (Figure 7).
Figure 7: Average Annual Wage for U.S. Tech Talent by Industry (2022)
* Includes computer software & services and computer product manufacturing.
** Finance, Insurance & Real Estate.
Average tech talent wages are highest in the San Francisco Bay Area and Seattle, and lowest in San Antonio, Virginia Beach and Kansas City (Figure 8).
Figure 8: Average Annual Wage for U.S. Tech Talent Employed by the Tech Industry (2022)
Software engineers are also highly concentrated in the tech industry and in certain markets. In the U.S. and Canada, 52% and 58% of all software engineers, respectively, work within the tech industry. Seattle (78%) and the San Francisco Bay Area (76%) had the highest concentration of software engineers working in the tech industry (Figure 9). Vancouver, the Waterloo region, Madison, WI, Calgary, Raleigh-Durham, Austin and Portland had concentrations above 60%.
Figure 9: Top 15 Markets for Software Engineers Employed by the Tech Industry (2022)
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