Dallas-Fort Worth’s strength in the technology sector is reinforced in a new national research report from Cushman & Wakefield. The DFW region ranks No. 21 among the top 25 U.S. tech markets, with San Jose (Silicon Valley) and San Francisco capturing the first and second spots respectively, according to Cushman & Wakefield’s inaugural “Tech Cities 1.0” national report, which launched today.
“Dallas-Fort Worth has a rich history in technology, as the home to Texas Instruments, tech mogul Mark Cuban, and the original telecom corridor,” said Robbie Baty, Senior Director in Cushman & Wakefield’s Dallas office. “In recent years, the sector has broadened to include a vibrant startup scene, as evidenced by the success of Dallas Startup Week, the Dallas Entrepreneur Center, and the many co-working operators that are expanding here.”
The top 25 tech cities were determined by analyzing the concentration of factors such as talent, capital, and growth opportunity – key ingredients that comprise a tech stew. The heartiest of these tech epicenters are: 1. San Jose, Calif. (Silicon Valley); 2. San Francisco, Calif.; 3. Washington, DC; 4. Boston/Cambridge, Mass.; and 5. Raleigh/Durham/Chapel Hill, N.C.
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,” 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.”
Technology has long been a key component of Dallas-Fort Worth’s diverse economic base. Along with locally based Texas Instruments and AT&T, a number of the world’s largest technology firms have significant operations in the region, including Amazon, Oracle, Intuit, HP, McAfee, and Microsoft, which has a 32-acre technology center in Irving. In addition, Uber recently selected Dallas and Dubai as launch markets for its new flying-taxi service, which it hopes to deploy in 2020.
Baty, who specializes in tenant representation and has deep expertise in the region’s technology sector, recently represented Frank Recruitment Group in a big lease in downtown Dallas. “They’re the world’s largest tech recruiting firm, and they’re planning for Dallas to become their largest U.S. office,” Baty said. “They picked Dallas because there’s a strong base of tech talent here, and it’s a great market for recruiting talent from other regions too. Young professionals want to be in Dallas.”
Legacy tech giants have spun off hundreds of offshoot companies, which has played a role in the city’s vibrant startup culture. Dallas has a bustling innovation and incubation scene, according to Baty, and is one of the national markets participating in the Smart Cities initiative. “The big co-working operators are expanding in the region,” he said. “WeWork just opened its new three-floor hub in Thanksgiving Tower downtown, which will serve as its Southern headquarters.”
These factors appear to be positively affecting Dallas’ ranking as an emerging tech city, positioning it as a growing force in relation to cities that have significant Tech reputations such as Seattle, New York, and Los Angeles.
Robert Sammons, “Tech Cities 1.0” report co-author and Regional Director, Northwest U.S. Research at Cushman & Wakefield, in San Francisco, said that although it was not surprising to see San Jose (Silicon Valley) and San Francisco continue to dominate, 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).
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 catch-up 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.”
“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,” McCarthy said.
In terms of Los Angeles, both McCarthy and 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,” 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.”
For a copy of the Cushman & Wakefield’s Tech Cities 1.0 report, click here.