Surprise Findings Put DC in Top 3 of Best Performing Tech Markets
WASHINGTON, DC, June 8, 2017 – Washington, DC has emerged as a top-three tech city center after San Jose (Silicon Valley) and San Francisco, according to Cushman & Wakefield’s inaugural “Tech Cities 1.0” national report launched today.
“There is tremendous access to high-level universities such as University of Maryland, Georgetown University, The George Washington University, George Mason University, University of Virginia, and Virginia Tech University, and this translates to lots of young talent that does not have far to go from their respective colleges to find jobs in tech,” said Theo Slagle, Director, Cushman & Wakefield, a specialist in tenant brokerage and expert on the tech sector in Washington, DC.
A dominating hub for life sciences and government, Washington, DC also serves as a significant outpost for tech companies seeking proximity to policymakers as well as for burgeoning cybersecurity investment. Washington, DC houses an established hub of well-known tech companies such as Facebook and Uber’s East Coast headquarters, and Amazon and Google have a very large presence on Capitol Hill.
“There is access to smart people and an educated workforce,” added Mr. Slagle. “Instead of choosing a law firm, for instance, many of them are choosing to work in-house for a tech company like Amazon and be part of the legal team.”
The top 25 tech cities were determined by analyzing the concentration of factors such as talent, capital, and growth opportunity – the key ingredients that comprise a tech stew. The heartiest of these tech epicenters are: 1. San Jose, CA (Silicon Valley); 2. San Francisco, CA; 3. Washington, DC; 4. Boston/Cambridge, MA; and 5. Raleigh/Durham/Chapel Hill, NC.
Cushman & Wakefield created the “Tech Cities 1.0” report to provide greater insight for its clients and industry stakeholders into existing and emerging tech centers that are driving much of today’s U.S. economy.
Ken McCarthy, Cushman & Wakefield’s New York-based Principal Economist and Applied Research Lead for the U.S., states that “tech is in everything” and that people would be left behind if they did not adopt technology and change with that technology.
“Basically every company today is a tech company in one way or another. We’re all using it, we’re using various aspects of tech companies to do various things,” Mr. McCarthy elaborated. “Whether it’s Salesforce as customer relationship management, or Workday for HR, and various other database programs, the old way of doing business just doesn’t work anymore.”
Report co-author and Regional Director, Northwest U.S. Research at Cushman & Wakefield, in San Francisco, Robert Sammons, said that while it was not surprising to see San Jose (Silicon Valley) and San Francisco continue to dominate, that mass-transit issues and escalating housing costs in those areas have fanned a tech spillover into secondary markets such as Austin (no. 7), Denver (no. 8), San Diego (no. 9), and Salt Lake City (no. 24).
In DC, Mr. Slagle also pointed to an increase in venture capital activity. “What we’re seeing in DC over the last several years is a large uptick in venture capital for tech startups that were in the beginning stages and are becoming more mature in the region.”
The political environment also beckons a spotlight, according to Slagle. “Many watch and seek news to establish ‘What’s going on in Washington?’ – and this ongoing attention is driving the demand for a presence here.”
The report found that Washington, DC had outranked cities that have significant Tech reputations such as Seattle (no.6), New York (no. 15), and Los Angeles (no. 18).
Remarking on Seattle’s number six ranking, Mr. Sammons said, “It’s certainly one of the biggest, if not the biggest competitor to Silicon Valley and San Francisco. Seattle is an interesting case because it was driven by Microsoft early on, which endures, and now Amazon is huge in the downtown area and it continues to be significant.”
He pointed to tech titan Google, which continues to spread its wings outside of Silicon Valley, for opening operations in Seattle to entice the existing talent pool.
Mr. Sammons cited Seattle’s cost-of-living as a lingering issue, somewhat mitigated by a recent uptick in residential development that’s outpacing San Francisco’s, as well as mass transit challenges.
“Seattle has played catchup over the past few years but with housing creation now outpacing that of the Bay Area and with a huge $54 billion transportation initiative that recently passed at the ballot box, it will likely allow it to compete much more aggressively with those markets at the very top of the list.”
To many startup and tech community workers around the world, it may be surprising to see New York (no. 15) and Los Angeles (no. 18) so far down the list.
“In the case of New York, when we started to see a growth in tech employment here about four or five years ago, one of the big issues for the companies coming to New York, particularly from San Francisco or Silicon Valley, was a lack of the skilled labor force they needed, particularly engineers,” Mr. McCarthy said.
In terms of Los Angeles, both Mr. McCarthy and Mr. Sammons noted its exceptionally diverse economy.
“Media is important, and you can’t lose sight of the fact that historically it’s also been an important manufacturing and industrial center,” Mr. McCarthy said, “There are myriad industries centered in LA, which has a good talent pool, and I would expect that also will come into play as we start to see these things evolve.”
“Los Angeles is a market that’s just enormous, it’s sprawling. And tech, even though it gets a lot of press for LA and Southern California, kind of gets lost in the mix because of media and entertainment. With Snap and other tech companies centered along “Silicon Beach” and with media and entertainment becoming even more tech-oriented, LA has nowhere to go but up,” Mr. Sammons said.
For a copy of the Tech Cities 1.0 report or to arrange an interview with Theo Slagle, Ken McCarthy or Robert Sammons, please contact Gary Howard on email@example.com Visit Cushman & Wakefield’s Tech Specialty Practice Group website here.
For a copy of the Tech Cities 1.0 report visit Cushman & Wakefield here.