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The New Tech Hubs: Pandemic Accelerates Industry’s Decentralization


Besides making hybrid work schedules into the new reality for U.S. office properties, the coronavirus pandemic is helping spur the partial decentralization of the tech industry away from its traditional coastal cities, according to a new report by The Brookings Institution.

The shift doesn't represent a massive exodus from the current tech hubs, but the pandemic did mark a slowdown in their growth and result in a corresponding uptick in tech jobs in midsized and smaller places with high quality-of-life metrics where tech workers can easily relocate, according to the report.

“To the extent that remote work remains a prevalent way of working in tech, more places may have a shot at building really vibrant local ecosystems,” Brookings Senior Researcher Mark Muro told The Wall Street Journal.

During the 2010s, tech sector jobs grew by 47%, adding more than 1.2 million jobs, a growth rate nearly triple the U.S. economy as a whole. Eight markets — San Francisco and San Jose, California; Austin, Texas; Boston; Seattle; Los Angeles; New York; and Washington, D.C. — accounted for nearly half of tech job creation between 2015 and 2019.

During the first year of the pandemic, however, cities like Dallas, Atlanta, Denver and St. Louis all added tech jobs at annual growth rates in excess of 3%, and nearly half of the nation’s 83 other large metro areas saw their tech sectors grow at higher rates than the period from 2015 to 2019.

Other large growers in 2020 included Sun Belt cities such as Charlotte, North Carolina; San Antonio; Nashville, Tennessee; Birmingham, Alabama; New Orleans; and Jackson, Mississippi, but also colder places such as Philadelphia, Minneapolis and Cincinnati. College towns such as Chapel Hill, North Carolina, and Madison, Wisconsin, also saw accelerated tech growth.

In 2021, a number of rising star cities saw growth in the number of postings for tech jobs, Brookings said, which points to higher job growth ahead in those places. During the same period, Boston, the Bay Area, New York and Los Angeles saw such postings decline.