The New U.S. Talent Hubs
Source: OZY, Nick Fouriezos, Senior Editor
Photo: Talent Hubs
I had only recently moved back to my home state of Georgia this year when I met them: the Silicon Valley transplants. The three of them were an unlikely trio of former tech workers who had moved from Berkeley, California, to Atlanta after their startup was acquired. They brought with them a desire to build an intentional community here . . . where the tea is sweeter, the land is cheaper and the internet connections are about as good as anywhere. They weren’t alone in their thinking: New cities are emerging as tech hubs, a process hastened by the pandemic. Globally too, commerce capitals are shifting, with China losing some of its dominance and Africa rising. Join us on this trip through tech’s changing contours.
1. Miami Vice
Just three years ago, I was in a Miami nursing home watching the city’s Mayor Francis Suarez promise the world this wasn’t just a “glitzy fun-and-sun, low tax city.” Point taken: Miami has emerged as the tech-attracting hub Suarez envisioned. Amid the pandemic, the city drew its highest-ever venture funding in 2020. It also saw the largest year-on-year increase of 15.4% in software and IT workers in the nation for the 12 months ending in February, according to LinkedIn data. The city has touted its willingness to bend over backward for businesses, along with Florida’s lack of a state income tax. When venture capitalist Delian Asparouhov tweeted “ok guys hear me out, what if we move Silicon Valley to Miami” in December, Suarez all but responded by asking how high he could jump. He has since talked with Elon Musk, Jack Dorsey and Peter Thiel, among others, while promising to hire the city’s first dedicated technology officer to show CEOs who are tired of California that they can find love in sunny Florida too.
2. The Texas Innovation Triangle
Texas was cooking even before the pandemic. Houston, Dallas and Austin all ranked among the metros that saw the largest net annual increases in millennial residents between 2012 and 2017. According to the LinkedIn data, Houston and Dallas-Fort Worth saw the second and third biggest gains among software and IT workers during the pandemic, growing 10.4% and 8.6%, respectively. Like Florida, the Lone Star State has no state income tax. Big oil has attracted a strong engineering base, and capital flows freely in Texas. If it were a nation, it would be the world’s ninth largest economy by GDP — making it perhaps the only state outside New York that can compete with California for deep investor pockets. It got a big publicity boost when Musk moved to Austin while also shifting investments by SpaceX and Tesla to Texas. To solidify its gains, though, Texas may need to ban noncompete clauses that stifle innovation and overcome a history of failure when it comes to translating tech talent into a vibrant venture capital scene.
3. Philadelphia
The home of the cheesesteak has traditionally had a working-class feel with a professorial upper class — an “eds and meds” town due to its many colleges and hospitals (38 percent of the city workforce was employed in just those two industries in 2016). Its strength in these sectors is now attracting a surge in biotech startups. Health care innovators made up 15% of startup accelerator Y Combinator’s 2020 winter batch (second-most of any category) and 12% of its upcoming 2021 class (fourth). Philadelphia’s lower cost of living compared to would-be Silicon Valley competitors such as Boston and Washington, D.C., gives it an advantage in drawing young talent. The city saw an 8.1% increase in software and IT workers between March 2020 and February 2021. And health tech is likely to grow amid the looming fear of future pandemics and a rapidly aging American population. So might Philadelphia’s stock.
4. Atlanta
Atlanta is a crossroads of delicious weirdness, hosting annual “Furry” and Dragon Con cosplay conventions, where high-powered lawyers rub elbows with sound healers during alpaca yoga classes in downtown bamboo forests (seriously). It is also a true melting pot, a majority-Black city whose suburbs are filled with Asian and African immigrant communities. Atlanta saw a 2.9% increase in software and IT talent during the pandemic. The “City Too Busy to Hate” has fostered its image as an oasis of drama-free profits since the civil rights movement, when Gov. Carl Sanders quietly desegregated the Capitol even as George Wallace was giving his infamous “Segregation now. Segregation tomorrow. Segregation forever” speech in neighboring Alabama. As recently as 2016, then-Gov. Nathan Deal refused to sign a religious liberty bill opposed by major Atlanta corporations while helping Georgia become the Hollywood of the South. But recent Georgia leaders, from Gov. Brian Kemp to ex-Sen. Kelly Loeffler, have been more willing to alienate business leaders, passing widely criticized voting restrictions that could jeopardize Atlanta’s potential as a hub for young tech workers.
5. Wildcards
The nonprofit One America Works released an April survey saying 47% of tech workers moved in the last year. Relocating workers won’t just settle in major cities; the appeal of affordable locales and proximity to family could cast them widely. For years, venture capitalists like Ross Baird, whose Village Capital is backed by AOL co-founder Steve Case, have toured the country showcasing talent across Middle America. Vermont investors have attracted entrepreneurs with Shark Tank-like ski events, while an African American couple in Cincinnati launched a $50 million venture fund for underrepresented founders in July. Initiatives like the “Cultivation Corridor” in Des Moines and financial incentive programs from Tulsa and Topeka to Tucson and Savannah are creating new competition for talent.