Chapter 4
What defines a tech talent market?
Scoring Tech Talent 2023
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Two key characteristics of top tech talent markets are high educational attainment and high concentrations of young people.
Forty-five of the top 50 tech talent markets have a metro-level educational attainment rate above their national averages of 35.0% in the U.S. and 32.2% in Canada. The top 10 markets have more than 44% of residents over 25 years old with a bachelor’s degree or higher (Figure 9). Washington, D.C., the San Francisco Bay Area and Boston have rates of more than 51%.
Figure 9: Top 10 Markets for Educational Attainment* (2021)
Source: U.S. Census Bureau (Metro) and Environs Analytics, May 2023.
*Population age 25+ with a bachelor's degree or higher.
Education, particularly with a focus on technology,2 is best analyzed through degrees issued by higher educational institutions. Metro areas that produced the most tech graduates last year with bachelor’s or higher degrees were New York Metro, Los Angeles/Orange County, Boston, Washington, D.C. and the San Francisco Bay Area (Figure 10). Large tech talent markets dominate the top 10 degree-granting regions. Demand is high for tech-related education. Between 2017 and 2021, tech-related degrees grew by 60,000. This analysis provides insight into which markets produce the most tech talent entering the labor pool each year.
2 Tech degree fields include computer engineering and information sciences; mathematics and statistics; electrical and electronics engineering; mechanical and industrial engineering; other engineering.
Figure 10: Top 10 Markets for Tech Degree Completions
Source: The National Center for Education Statistics (Region), various Canadian ministries of education, May 2023.
Note: Bachelor's degree or higher
Post-graduation, where are tech professionals migrating?
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Many graduates do not stay in the market where they earn their degree; they often migrate to markets that offer the most job opportunities or have the best pay. Analyzing tech-related graduation data and tech-related employment growth identifies tech talent flow through the difference between where workers are employed and where they were educated (Figure 11). Tech degrees cover the most recent five-year period available (2017-2021) and tech talent jobs added cover the period when most graduates would be counted in employment figures (2018-2022). Toronto was the top market with creation of 31,405 more tech talent jobs than graduates, followed by Vancouver with 29,932 and Montreal with 25,248 more jobs than graduates. Other top tech talent job creators were the San Francisco Bay Area, Seattle, Ottawa and Calgary. The top education markets—those with more tech degree graduates than tech talent jobs—were New York Metro, Washington, D.C., Chicago, Los Angeles/Orange County and Atlanta.
Figure 11: Tech Degrees vs. Tech Jobs Added by Market
*Tech degrees cover the most recent five-year period available (2017-2021) and tech jobs added cover the time period reflecting when most graduates would be counted in employment figures (2018-2022).
Source: CBRE Research, U.S. Bureau of Labor Statistics, National Center for Education Statistics (Metro), various Canadian ministries of education, 2023.
Which markets offer a highly-educated workforce?
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Thirty-one markets had more tech degree graduates than new tech talent jobs. This implies a dispersion of tech talent hiring, as the national tech talent workforce has grown year-over-year. This may be attributable to increased remote work opportunities.
The most coveted skill by tech employers is software engineering. From 2021 to 2022, more than 247,000 new software engineer jobs were created in the U.S. versus 189,010 university graduates specializing in software engineering. This created a shortfall of software engineering degree graduates relative to jobs and encouraged upskilling of the existing workforce and some international immigration to supplement tech talent needs. In Canada, international immigration has played a much larger role to fulfill tech talent needs.
Another notable characteristic of tech talent markets is the number and concentration of people in their 20s and 30s, which drives workforce growth and innovation. Those in their 30s are the largest demographic cohort in the workforce, while those in their 20s will fuel future growth (Figures 12 and 13).
Figure 12: Population Change of Those in Their 20s by Market, 2016-2021
Source: U.S. Census Bureau (Metro), Oxford Economics Canada (Metro), 2023.
Figure 13: Population Change of Those in Their 30s by Market, 2016-2021
Source: U.S. Census Bureau (Metro), Oxford Economics Canada (Metro), 2023.
Over half of the top 50 tech markets have seen the number of residents in their 30s increase by more than 10% since 2016. Austin and Vancouver grew the fastest of the large markets, at 20% and 16%, respectively. Waterloo, Canada was the fastest growing small market at 17%. Waterloo also was the top overall growth market for residents in their 20s at 21.3%, trailed distantly by Salt Lake City (12%) and Toronto (11%). Several large and highly concentrated university markets had fewer residents in their 20s than last year, including the San Francisco Bay Area, Los Angeles/Orange County, San Diego, New York Metro and South Florida.
Growth rates were much higher for degree-holders in their 20s and 30s. All but four U.S. markets saw degree-holders in their 20s grow from 2016 to 2021, with 7% aggregate growth for the 42 U.S. markets among the North American top 50. Degree-holders in their 30s grew in every market during the same period, with 21% growth for the 42-market aggregate. For both age cohorts, tech talent markets outperformed the overall U.S. market, which saw a 4% decline in degree-holders in their 20s and an 11% increase for those in their 30s (Figures 14 and 15).
Figure 14: Change in Residents in Their 20s with College Degrees by Market, 2016-2021
Source: U.S. Census Bureau (County), 2023.
Figure 15: Change in Residents in Their 30s with College Degrees by Market, 2016-2021
Source: U.S. Census Bureau (County), 2023.
Salt Lake City, Madison and Canada's Waterloo Region had the highest concentration of residents in their 20s, comprising about 17% of each market’s total population (Figure 16). Austin and Calgary had the highest concentration of residents in their 30s (Figure 17).
Figure 16: Top 10 Most Concentrated Markets for Residents in Their 20s (2021)
Source: U.S. Census Bureau (Metro) and Oxford Economics (Metro), 2023.
Figure 17: Top 10 Most Concentrated Markets for Residents in Their 30s (2021)
Source: U.S. Census Bureau (Metro) and Oxford Economics (Metro), 2023.
People in their 20s and 30s account for 47.7% of the tech talent workforce across all industries in the U.S., compared with 40.2% for general office-using industries (Figure 18). Tech talent working within the tech industry has an even higher concentration at 52.7%. Older workers (age 55 and up) represented 29.1% of the labor force for all office-using industries compared with 20.4% of tech talent working in all industries and 16.6% of tech talent working within the tech industry.
Figure 18: U.S. Workforce by Age for Certain Industries (2021)
Source: U.S. Census, IPUMS and CBRE Research, April 2023.
Top markets are distinguished by tech clusters and higher concentrations of tech talent. These clusters typically form around preeminent universities that tend to invest the most in innovation and provide a steady flow of new talent for local companies. Tech clusters also form around leading companies that draw other companies to a region and support an innovative ecosystem that spawns new entrepreneurs and companies. Tech companies use these clusters for synergy and competition, thereby accelerating the innovation process. These companies in the core high-tech industry are heavily concentrated, with about half of their workers doing tech-related jobs (Figure 19). Consequently, tech talent clusters tend to form in markets with a strong concentration of high-tech companies.
Figure 19: U.S. Tech Talent Workforce Concentration by Industry (2022)
*Includes computer software and services and computer product manufacturing; **Excluding High-Tech.
Source: U.S. Bureau of Labor Statistics, April 2023.
*** FIRE stands for Finance, Insurance, Real Estate.
Note: See Table 21b in the Appendix section for Canadian tech talent workforce concentration by industry.
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