Tech is entering a two-track economy as remote work powers new rising-star cities outside traditional bastions

Tech is entering a two-track economy as remote work powers new rising-star cities outside traditional bastions

tech worker
Tech has entered a two-track economy.

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  • The pandemic has pushed tech into a two-track economy between superstar cities and others.
  • The future of these tech cities depends on the maturity of tech and remote work.

Tech workers are making their way across America. 

New research by Brookings backs the anecdotal evidence that remote work has helped tech workers spread out as companies like Twitter and Spotify closed their office doors, with some making working from home a permanent fixture.

Brookings researchers Mark Muro and Yang You found that the tech sector was once concentrated in “superstar cities” like the Bay Area, but has seen slower growth in these areas, while new up-and-coming cities like New Orleans have had a tech boom during the pandemic.

Muro told Insider he previously saw a “winner take most dynamic in which a short list of sizeable, coastal metropolises were not only capturing and producing the bulk of tech growth, but actually increasing their share of the nation’s tech jobs.” 

The metros on that “short list” are “superstars” in tech jobs. 

“Large and mostly fast-growing, these well-established hubs dominated the nation’s tech growth through the early 2010s and gained dominance in the pre-pandemic years of 2015 to 2019,” Muro and You wrote in the report.

Now, he added, what’s emerged is a two-track tech economy in which the “winner take most dynamic” persists among the tech hubs of the last 20 years, set off against rising star cities that are now rapidly catching up to the traditional giants. Remote work, he said, is a part of that.

According to the research from Brookings, there are eight metro areas that are considered superstars in tech, like Seattle and the Bay Area.

The following table highlights just what tech employment growth has looked like in these superstar locations according to the authors’ analysis of employment data:

But the pandemic put a damper on the employment growth of these superstar locations, although they still remain robust places for tech employment despite the pandemic’s impact.

“Even amid 2020’s pandemic disruptions, these eight superstar metro areas still slightly increased their share of the nation’s tech sector employment, and housed 38.4% of all U.S. tech jobs,” the authors wrote in a blog post.

But not all of tech employment falls into these eight US locations. There are nine metro areas that the report notes as “less-established centers” than the eight superstars but “grew briskly in the years before the pandemic.”

The metro areas of Atlanta, Georgia, and Miami, Florida, are just two of the nine mid-sized metro areas who are thought of as rising stars in tech, per the report.

Muro and You find that these nine places “powered through the first year of the pandemic to turn in positive growth and add a combined 14,000 tech jobs while slightly increasing their aggregate share of the nation’s tech sector.”

Metro areas other than Brookings’ superstars and rising stars also saw tech sector growth from 2019 to 2020. For instance, the metro area of McAllen, Texas saw tech employment grow 21.2%.

Brookings looked at the 100 largest metro areas and those that had over 1,000 tech workers in 2020. As some metro areas saw fast growth, others actually saw a loss of tech workers, as seen in the following map. Superstars and rising stars are noted in parentheses when hovering over the map.

Muro and You wrote in their report that the big question that remains is whether this tech growth will further diffuse or is a temporary disruption. Its future depends on two things, Muro said: whether tech matures and whether remote work or even hybrid work becomes the norm.

Read the original article on Business Insider

This content was originally published here.

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