Technology professionals in the U.S. are known for thinking outside the box—not the map.
Silicon Valley, after all, still holds its hypnotic star power for computer programmers and software developers. But talent and tech startups alike are finding new appeal in looking beyond the typical markets, to emerging areas that offer the increasingly valuable combination of vibrant community and lower costs.
From Columbus and Madison to Colorado Springs, these new “hidden gem” markets have a few things in common, according to new JLL research. Companies that reside in these markets are actively fostering new technology, and new hubs are emerging as a result. What’s more, they offer high quality of life at more affordable costs than the nation’s biggest markets. And by appealing to the talent directly, they offer a ready base of new talent for tech startups and ramp-ups who can’t stomach the fierce competition and costs of the top-tier markets.
“Many tech professionals want to live where they can find quality work, without sacrificing quality of life,” says Steffen Kammerer, Senior Vice President and leader of JLL’s Technology group. “As high-caliber talent becomes concentrated in cities with lower costs attached to them, so do the companies that hire them.”
In addition to a growing concentration of tech talent, emerging markets also showcase other promising economic indicators.
“We are seeing momentum in cities that aren’t usually top on the radar,” says Julia Georgules, Director of Research, Local Markets at JLL. “While developers and programmers can appreciate the healthy lifestyle they’ll find in Columbus or Sacramento, for example, the companies that hire them might be drawn to the market because of its relatively lower costs for space and talent at a time when major hubs are experiencing historically low unemployment numbers.”
The trick is to follow the talent to lower-cost centers of innovation. Here are five emerging markets cracking the code on tech talent:
Bay Area talent finds new opportunity in Sacramento
A dramatically lower cost of living is luring talented Bay Area computer programmers an hour northeast to the California capital city of Sacramento. But there’s more to the migration than simple cost reductions. Last year, the Sacramento City Council announced a $10 million Innovation and Growth fund that is helping position the city as an emerging tech hotspot. Already the city is home to 11,000 programmers who can enjoy far more reasonable housing prices than in the Bay. Meanwhile, employers appreciate the 21 percent savings on average Bay Area wages.
Mad for creative developers in Madison
Madison, the state capital of Wisconsin, has been a best-kept secret for tech giants. But its reputation as an innovation ecosystem is growing fast, buoyed by the University of Wisconsin-Madison and a rising generation of entrepreneurs. The city is home to just under 9,000 software developers, but considering its population size (245,000), the concentration is what’s significant. Madison has the nation’s 10th highest concentration of software developers. While tech talent appreciates the vibrant community and beautiful lakefronts, start-ups are enamoured of its combination of talent and low costs. Wages here are 40 percent lower than in Silicon Valley.
Colorado Springs wins the fight for software developers
Boulder and Denver may have more name recognition in Colorado’s technology scene, but Colorado Springs has been cultivating a quiet but strong reputation as a tech talent haven. Drawn to the area’s natural beauty and high quality of living, the city’s pool of software developers is roughly the same size as Boulder’s, at about 6,000 people. The market, which was recently named by U.S. News & World Report as one of the top 10 places to find a tech job, is also naturally fed by a host of local colleges and universities as well as the area’s military-based economy, with the Air Force Academy and companies like Microchip Technology, Northrop Grumman, and Lockheed Martin all at home here.
Midwestern charm, urban-sized wages in Columbus
Columbus has big economic growth plans for 2020, and the capital of Ohio envisions itself as a “center of knowledge and innovation.” So far, that plan appears on track, thanks in part to a rich talent pool from the likes of The Ohio State University, Limited Brands, Ohio Health and Nationwide Insurance. While Columbus may not be a well-known hotspot like Austin, it is actually home to the same number of computer programmers (11,000) and its wages are more competitive. Future innovation is also very much in the cards after the city recently won the U.S. Department of Transportation’s Smart City Challenge, which could bring in as much as $40 million in federal support of local innovation.
Capitalizing on incubation in New York’s capital city
The city of Albany in New York state is also known as a hub of tech growth, aka “Tech Valley.” Home to about 5,880 computer programmers, the Metropolitan Service Area (MSA) here boasts the second-highest concentration of computer programmers in the country, with an average annual salary of $76,000. The appeal of the area is varied, but one key driving force for tech talent and employers alike is a strong public-private focus on fostering a culture of innovation. Diverse stakeholders range from academic and research institutions to Fortune 500 companies, and newcomers are encouraged with advice and networking opportunities.