UPDATED 13:19 EDT / NOVEMBER 28 2011

What Are the Best Cities for Tech Jobs? A Look Beyond the Valley

Joel Kotkin, a professor of urban development, and Forbes Magazine have published a list of the top 10 best cities for tech jobs in the U.S. The results are surprising – the Bay area doesn’t even hit the list. That’s because Kotkin and company looked at some alternative metrics, such as job market stability, when compiling the list.

“The Valley remains the ‘biggest loser’ among the nation’s tech regions, surrendering roughly one quarter of its high -tech jobs — about 80,000 — in the past decade,” Kotkin writes. “Only New York City (No. 44) lost more tech jobs during that time.”

The top 10, according to the Forbes list, are:

  1. Seattle, WA
  2. Baltimore, MD
  3. Columbus, OH
  4. Raleigh, NC
  5. Salt Lake City, UT
  6. Jacksonville, FL
  7. Washington, DC
  8. New Orleans, LA
  9. Riverside-San Bernardino, CA
  10. San Diego, CA

The data comes from EMSI, and uses TechAmerica’s definition of high tech industry.

It’s worth mentioning that Kotkin has hated San Francisco for a long time. I can’t help but suspect that he deliberately chose metrics for this that San Francisco and Silicon Valley could not win. But even if this is the case, it highlights some interesting data.

On the other hand, it’s become cliche by now to say that there’s no such thing as job stability any more. I can’t help but wonder if job market volatility is actually more important than concentration of industry. The other problem is that no one can accurately predict future volatility based on past volatility. Black Swan author Nassim Taleb has argued that Italy is more stable than Saudi Arabia:

Italy is an example of mild randomness in comparison with Saudi Arabia and Syria, which are examples of wild randomness. Italy has had 60 changes in regime in the post-war era, but they are inconsequential…. It is a prime example of noise. It’s very Italian and so it’s elegant noise, but it’s noise nonetheless. In contrast, Saudi Arabia and Syria have had the same regime in place for 40 some years. You may think it is stability, but it’s not. Once you remove the lid, the thing explodes.

Could the Valley be the Italy of the job market? If so, what is the Egypt?

Furthermore, the definition of tech jobs Kotkin used includes electronic component manufacturing and telecommunications, which accounts for some of the losses in places such as the Boston metropolitan area. Those are significant declines, but should they worry Web developers, project managers and system engineers? The results are going to be skewed against cities that have declining subsectors, while cities that did not rely on those subsectors to demonstrate more growth.

Unfortunately, it may not matter much for unemployed workers which cities have the best job growth. The New York Times Economix blog reported earlier this month that according to the Census Bureau migration in the U.S. has it a record low, and economists blame the inability of people to sell their homes as part of the reason.

Incidentally, Kotkin was one of the housing boom’s biggest boosters. He argued that cities like San Francisco and New York offered only “ephemeral” value. Kotkin instead praised cities with cheap housing prices, something Kotkin thought was more important than the incentives “ephemeral” places could offer. Places like Phoenix and Las Vegas, which have been devastated by the housing bubble burst, and places like St. Louis which remains low on almost any index of economic well being. Now those stuck with homes purchased in those cities that Kotkin thought were so great may not be able to move to the new cities Kotin is promoting.

The good news, then, may be that despite this decreased mobility, cities like Raleigh are still growing.


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