While many folks in the tech world spent the past 12 months wondering where Amazon’s HQ2 would land, the more important question is: Where will the next Amazon come from?
That’s where many conversations around the recent Amazon HQ2 announcement miss the mark. Luring a tech titan like Amazon to open new offices will always provide a jolt, but the best strategy for long-term growth is to focus on fostering an active startup community and a tech-ready workforce.
For HQ2 finalists that were passed on—and cities didn’t make the list—the 2018 Tech Town Index provides a look at the factors that draw top talent and businesses to a metro area.
The study identifies the nation’s “Top 20 Tech Towns” based on IT job growth, cost of living and salaries—and demonstrates it’s not just traditional coastal hubs where Tech Towns are flourishing.
Several themes emerge in the top Tech Towns, including access to constantly refreshing talent pools from local universities and training programs, startup-friendly cultures, and public-private partnerships to promote workforce development.
Not surprisingly, several HQ2 finalists made the Tech Towns list. Interestingly, New York did not make the top 20, and five finalists outranked the District of Columbia: Raleigh, Austin, Dallas, Denver and Atlanta.
These cities have built up vibrant tech ecosystems and are poised to birth the next wave of innovative companies.
For example, Raleigh—the number two Tech Town—outranked Silicon Valley and Washington, DC not only because IT jobs are growing at a rapid pace in the city, but low cost of living makes it a desirable location for tech pros looking to put down roots. More than 25,600 tech jobs opened in Raleigh over the past year, and the median IT salary of $86,944 goes further because the cost of living is 3.5 percent lower than the national average.
Compare that to San Francisco—where the cost of living is 43.6 percent higher than the national average—or Washington, DC where it’s 18.6 percent higher.
Austin is another city that topped Silicon Valley and DC in the rankings and has a bright future as a Tech Town. Austin is home to a variety of blossoming startups, which is why the number of IT jobs is projected to surge 15 percent over the next five years—rivaling Silicon Valley in terms of growth. However, unlike the Bay Area—where housing prices are sky-rocketing—the cost of living in Austin is 3.4 percent below the national average.
Dallas is also driving the Lone Star state’s reputation as a southern tech powerhouse. The city ranked sixth in the Tech Town index and is home to 42 Fortune 1000 companies. More than 108,000 tech jobs opened in Dallas last year, and with no state income tax in Texas, the cost of living in Dallas is 1.2 percent lower than the national average.
Atlanta is yet another southern hotbed that secured a top 10 Tech Town ranking. The cost of living in Atlanta is 3.9 percent lower than the national average, and with the growing success of public-private partnerships such as Technology Square, more than 76,000 tech jobs opened in the city last year.
And if you look further west, Denver is one of three Colorado cities that made the top 20 Tech Towns index, joined by Boulder and Colorado Springs. IT pros in Denver make a median salary of $90,958, and the number of tech jobs in the city is projected to grow by 11 percent over the next five years.
These cities and other Tech Towns are thriving not because they’ve focused on luring existing tech companies, but because they’ve doubled down on efforts to promote healthy startup ecosystems and a tech-ready workforce.
The 2018 Tech Town Index provides a promising snapshot of what’s to come for HQ2 finalists and other tech-ready cities. It also serves as a reminder that flourishing Tech Towns don’t just attract the companies of today, but encourage the innovators of tomorrow.
If you’re looking for the tech hubs where the next Amazon or Apple will come from, the 2018 Tech Town Index is your best guide. Download the full report here.