Lower real estate costs, a growing number of college graduates with tech degrees and the shift toward remote work have lured tech businesses to such fast-growing cities as Denver, Colorado; Phoenix, Arizona; Austin, Texas; and even Boise, Idaho.
The nation's biggest coastal tech hubs logged job growth stronger than the national average at the end of 2022, after years of expansion across the U.S. and globally by such giants as Amazon, Microsoft and Google.
Even with headline-grabbing tech layoffs, year-over-year job growth in Seattle, Silicon Valley's San Jose, San Francisco, Boston and Portland, Oregon, registered as high as 5% in December — well above the 3.1% U.S. job growth rate, according to Washington, D.C.-based research firm Economic Innovation Group.
The report, along with the first release of annual data from the U.S. Census Bureau on high-tech businesses, shows the most populous big-city technology job centers remain resilient, even as other cities across the country build a sizable tech presence.
The new census data compilation, called Business Dynamics Statistics of U.S. High Tech Industries, provides the first look at changes in annual business and employment statistics in the tech sector from 1978 to 2020, according to a U.S. Census Bureau statement.
Most of the metropolitan areas with the largest concentration of high-tech companies and jobs are on the coasts — Seattle, San Jose and San Francisco on the West Coast, and Washington, D.C., Boston and New York City on the East Coast, according to the report by U.S. Census Bureau economists Melissa Chow and Nathan Goldschlag.
The data shows tech employment in San Francisco doubled as a percentage of the total job base to 11% over the 42-year period. The Washington, D.C., metropolitan area, home to Amazon's second headquarters that's under construction in Arlington, Virginia, increased its concentration, or intensity, of tech jobs from 8% to 14% over the same time.
San Jose, the largest city in California's Silicon Valley, has had the nation's largest share of tech jobs since the 1980s, far surpassing runner-up Washington, D.C. However, San Jose's tech employment percentage declined to less than a quarter of total jobs in 2020 from nearly 30% in the '80s as San Francisco, Seattle and other regions around the country gained more tech jobs, census data shows.
San Jose, D.C. and San Francisco all showed robust growth in their share of tech businesses among all new businesses since the 1980s.
San Jose, for instance, rose from roughly 4% in 1978 to over 16% in 2020. Between 2000 and 2012, when many tech startups were launched, the share reached nearly 20%. Boston and New York City showed an increase in the share of tech entrants through the early 2000s, but the share has flattened over the past two decades, data shows.
The entry rate, or share of new tech startups as a percentage of the total tech company base in each metropolitan area, declined as the share of older establishments increased.
The geographic distribution, shifting job intensity and increasing share of existing tech businesses may have consequences for innovation and economic growth, Chow and Goldschlag said in the report.
"Knowing where high-tech industries are located is crucial for many states and communities because businesses in these industries introduce new products and services, create jobs and drive economic growth," the economists said.