The 11 Most Important Tech Cities in the U.S.
The Big Apple led KPMG’s 2019 ranking. Respondents to the consultancy’s survey predict that—if it isn’t already—New York will be the most important tech hub in the world within the next five years. With its concentration of assets—including academic institutions such as Cornell’s tech campus, Columbia, New York University and CUNY, the global financial industry and infrastructure ranging from high-speed internet to major airports—New York is one of the most significant global hubs for most types of business. Tech is no different. For proof of New York’s preeminence, look no further than the decision by giants like Amazon and Facebook to increase their footprints in the city. Amazon planned to build its HQ2 in Queens, but after public backlash to the company’s receiving billions of dollars in subsidies, it pulled out. Less than a year later, at the end of 2019, the company leased 335,000 square feet of office space in Hudson Yards, which will house some 1,500 employees. Facebook inked a lease in November for 1.5 million square feet in the same Manhattan megadevelopment.
Beantown is another big Northeastern tech player. The city has all of the elements for a sustainable, thriving tech industry: It ranks third among U.S. cities in terms of growth in demand for tech jobs, according to Indeed; is home to a host of top global universities, including MIT, Harvard and Boston University; and boasts successful startups such as pet supplies company Chewy.com, self-driving car company Perceptive Automata, data analytics company Localytics and payment platform provider Flywire. KPMG pegged Boston as the second most important U.S. tech city.
Long a capital of cool known for South by Southwest and the Austin Film Festival, the capital of Texas is also a leading U.S. tech hub (KPMG ranked it just behind Boston, and it is a leader in Indeed’s rankings as well). According to the local Chamber of Commerce, tech employment in Austin surged 6.6 percent in 2018, and 15.8 percent of the city’s jobs are in the industry, compared to 8.7 percent nationally. This trend has been a decade in the making: Tech employment in Austin grew almost 40 percent in the past 10 years, compared to 33.5 percent for all other industries in the area. Major companies with presences in Austin’s so-called Silicon Hills tech cluster include Dell Technologies (headquartered in Round Rock), Apple, Amazon, EA and Oracle, to name just a few.
It’s only been in recent years that D.C. has begun to shed its reputation as the staid, somewhat conservative, slightly square seat of national government. It’s still all those things, but a wave of new mixed-use developments—exemplified by the District Wharf—a $500 million public transit initiative and a top food scene are helping make it a more desirable place to live. Tech companies have followed, drawn by massive government contracts, a deep pool of educated workers and proximity to power. In 2019, Amazon chose northern Virginia as home for its HQ2 (although the company is still building a similar location in New York), and Microsoft won a highly contentious $10 billion Pentagon contract (Amazon is suing the government, claiming President Trump helped block its bid out of spite at CEO Jeff Bezos). In addition, George Mason University is creating a new $360 million tech campus in Arlington, Va.
The Bay Area and Silicon Valley are the birthplace of the world’s tech industry and home to titans such as Apple, Cisco, Facebook, Salesforce and Google, among many, many other prominent companies. Yet in recent years the cost of living and housing prices have skyrocketed and public infrastructure has decayed, putting the squeeze on workers, and the city has suffered a bit of a cultural malaise as these companies face increasing scrutiny and public backlash over privacy concerns, monopolistic behavior and gentrification. In 2019, for the first time ever, San Francisco slid from the top spot in KPMG’s survey. “More than half of the respondents believe Silicon Valley will no longer be the technology innovation center of the world in four years,” the report says.
Industry watchers should not count California out, however. Rather, they should head south to the land of palm trees and back lots. Los Angeles, long dominated by Hollywood and the entertainment business, is more and more a mecca for tech. Much of this is driven by companies such as Netflix, YouTube and Amazon, all of which are headquartered elsewhere but must fill their ever-growing slates with programming. Social media companies such as Snap have also entered the fray. And high-tech manufacturing—think SpaceX—has been drawn to the area thanks to a long history of aerospace and engineering exceptionalism. Meanwhile, a concentration of top research universities, including UCLA and USC, helps feed a voracious demand for talent.
The Windy City has suffered from bad press for the last few years for its murder rate and struggling public education system, but if you visit, unless you go to the most challenged neighborhoods, you probably wouldn’t know it. While the Midwest tends to miss out on venture capital investment, there’s an increasing focus on keeping talent and growing companies in the heartland, and Chicago is already a leading global tech hub. Thanks to the presence of top universities such as Northwestern and the University of Chicago, and a thriving ecosystem of tech incubators and numerous Fortune 500 companies, the city has quietly and organically grown its own successful tech industry. Some of the city’s stars include Grubhub, Morningstar, Orbitz and Gogo.
The Seattle tech scene is dominated by two monster players: Amazon and Microsoft. Amazon has transformed the way Americans shop and remade the architecture of the internet, and Microsoft has been a key player in personal computing and software since its inception. Yet Seattle has more to offer. Boeing’s largest factory is nearby, making the city a longtime engineering and aerospace hub. This industry presence, combined with the researchers it draws from top universities and engineering schools, has put Seattle at the center of the burgeoning new space industry. And while Seattle has cost-of-living and gentrification problems similar to those in the Bay Area, Microsoft has recently taken a stand with a $500 million commitment to help create more affordable housing.
In Indeed’s city rankings, little Huntsville, with a population of around 200,000, is a national technology leader. It is the top-performing small city in the U.S. in terms of the concentration of tech jobs, which account for 17.8 percent of all of its job postings. The overall job mix overlaps 47 percent with that of Silicon Valley—in other words, Huntsville’s companies are vying with companies in San Francisco for a lot of the same hires. This isn’t completely surprising: Along with neighboring Birmingham, Huntsville is at the core of a burgeoning Southern Silicon Valley. Colloquially known as Rocket City due to its history as an aerospace hub, the city has thrived on defense contracts, and biotech institute HudsonAlpha has generated 1,300 jobs and a $1.85 billion economic impact since 2006. Plentiful tech jobs and a low cost of living make Huntsville the fastest-growing city in Alabama, sucking up 62 percent of the state’s new jobs. It is expected to be Alabama’s largest city within five years.
Situated just north of Denver, Boulder is home to the University of Colorado, is the seat of the state’s cannabis industry and hosts many of Colorado’s top financial and venture capital firms. Boulder clocked in just behind Huntsville in Indeed’s ranking of small tech cities: Nearly 11 percent of its posted jobs are in tech, and there’s a 71 percent overlap with the Silicon Valley job market. This isn’t a new trend in Boulder. As far back as 2010, there were six times as many startups per capita as the national average and double the number in San Jose, Calif., per capita, according to Inc. magazine. The boom in Boulder’s tech field is due to northern Colorado’s aerospace industry, a major presence by companies like Sun Microsystems and IBM, and biotech innovation coming out of the university.