In a recent report by the CBRE real estate services company, they put out some data that attempted to quantify which markets are growing with high-tech talent and businesses, and which ones are losing ground. It has always been a very difficult to ascertain such trends, as the economy is always in flux and the less steady measurements of population changes, business growth and cost of living are always in play.
In other words, figuring out which cities are hot in growth, and which ones are declining, is not easy to do, as the trends can change quickly.
As first glance, three Ohio urban areas in this report — Columbus, Cincinnati and Cleveland — looked to be doing well in high-tech business growth. In measuring growth of the high-tech talent pool in those cities from 2015-2020, Columbus had grown by 5.1% in that talent, Cincinnati by 9.6% and Cleveland by 14.6%. Axios recently showed how these Ohio cities ranked among others.
As with any of these studies, however, one must dive down in the data and the devil is always in the details. First, these three Ohio metro areas are in the small market category, given that they all have less than 50,000 high-tech workers. They are nowhere near the San Francisco Bay Area, which has 373,000 of this talent, seeing a 16.4% increase from 2015-2020.
Being smaller means that there is some growth, but not a lot in terms of actual numbers when compared to the big high-tech employment markets. All three of the Ohio cities have seen 6,000 or less in new jobs in high tech during that five-year window.
The question becomes whether the high-tech job growth in the middle of the country is growing faster now than the coastal areas were growing in the pre-pandemic years, and whether any of this growth has long-term staying power.
It is difficult to figure that out because so many factors are changing. Remote work was growing in exponential numbers during the past two years, but has slowed down considerably lately. Workers and businesses now have more choices of relocation, so the personal housing costs-of-living and office space prices could be a big factor in where the smaller high-tech business growth will end up.
But again, this is all in flux and no one is quite sure whether middle America will be pulling high-tech business from Silicon Valley or Boston and relocating them to Columbus, or if the coastal high-tech cities will continue to be the center points for this business growth.
In a recent Wall Street Journal story, the feeling among the experts is that working remotely from Cleveland will still be in play, but businesses choosing to relocate there will be less so.
“Some of the biggest names in tech aren’t just allowing existing workers to relocate out of the Bay Area, they are also starting to hire in places they hadn’t often recruited from before,” the story says. “The result is the most geographically distributed tech labor market to date. That’s leading to above-market rates for workers in smaller hubs, forcing local companies to raise wages to keep up with the cost of living and fend off deeper-pocketed rivals from California, Seattle and New York.”
But a report published in late June by the Brookings Institution has a slightly different take. In “Remote Work Won’t Save the Heartland,” the conclusion is that outmigration of high-tech workers from the big market coastal markets to smaller middle-America cities isn’t happening much and will likely decline further.
“This suggests that for all the discussion of new work patterns and possible relocations for millions of professional workers, fewer and fewer will be fully footloose in the coming years, as remote work settles into a new level that will be higher than the pre-pandemic norm but lower than now,” the report says. “All of which is to say that most heartland cities should not hold their breath for quick, migration-driven turnarounds generated by the arrival of new tech or professional workers from the coasts.”
Trying to measure whether the glass is half-full or half-empty has always been the problems with such reports. Local chambers of commerce have always generated feel-good numbers even when the real data shows the opposite. In this case, what is hard to determine is whether the changes seen in the past two years were driven by the pandemic (and will go back to the “new normal”), or if these changes in high-tech employment were happening regardless of the coronavirus.
The CBRE report sort of has it both ways: growth in the science/engineering side of the equation, but a decline in the sales and administrative part.
“The opportunity to fulfill consumer demand for new and improved technology products and services resulted in U.S. tech talent employment growth of 0.8% in 2020, making it one of the most resilient professions during the pandemic,” CBRE wrote. “In contrast, total non-tech occupations fell by 5.5%, office-based administrative and sales occupations declined by 5.8%, and finance occupations increased by half the rate of tech at 0.4%”
The Ohio cities show they are in the bottom half in terms of high-tech growth. In the CBRE’s “Tech Talent Scorecard Ranking” of the top 50 markets, Columbus comes in at No. 31, Cincinnati at No. 42, and Cleveland at No. 44. For comparison’s sake, that puts those three cities behind Salt Lake City (No. 18), and ahead of Milwaukee (No. 49).
Still, there is optimism among those working in the economic growth advocacy arena. Earlier this year, in a Cleveland Plain Dealer op-ed title “Cleveland and Ohio suddenly contending in the race for technology talent,” Chris Berry, president of OhioX, a statewide nonprofit technology and innovation partnership dedicated to helping make Ohio a leading tech hub, saw the glass as half-full.
“Over the past year, I’ve met and spoken with dozens of Ohioans who at one point lived and worked in places like New York City, Seattle, and San Francisco,” he wrote. “Many are originally from Ohio, but not all. Some now work remotely for out-of-state companies and some moved here to join a local business. The one thing nearly all have in common is they work in technology or technology-focused careers.”
This story was originally published by the Ohio Capital Journal and republished here with permission.
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