It’s easy to get the impression that the tech industry is in dire straits based solely on the grim headlines about layoffs. Contributing factors like over-hiring and under-delivering, capricious management and scary-sounding phrases like AI takeover have led to a sense of unease about where tech is headed and whether there’s a place for humans in it.
4 Reason Smaller Cities Are Tech Boomtowns
- They are home to top colleges and universities.
- Housing and real-estate prices are lower than in major metro areas.
- Post-pandemic, their populations have swelled with talented tech workers.
- Smaller cities are investing in tech-oriented education and upskilling programs.
The headlines don’t tell the full story, though. Industry-agnostic technology roles are available and VCs are looking for investment opportunities beyond New York, Boston and Silicon Valley to the so-called second cities. In fact, VC funding to seed- and early stage companies has increased dramatically over the past decade, according to data from Revolution, an investment company chaired by AOL founder Steve Case that focuses on tech companies outside of Silicon Valley. In 2021, VCs invested $24 billion in cities outside of those traditional corridors, up from $4 billion a decade prior, according to data from Revolution’s Rise of the Rest fund.
The opportunities are not only limited to newly launched, innovative brands: many legacy businesses are looking for talented, driven technologists of all experience levels to upgrade and integrate new technologies ranging from sophisticated Web3 and artificial intelligence to moving from on-prem hardware to cloud software and into their operations.
Embracing the New Collar Worker
Given the Great Resignation, urbanites’ for a bit more in-home elbow room and frontline workers in retail and dining facing business closures, it’s almost impossible to overstate the dramatic shifts in work over the last three years.
Several businesses, educational institutions and local and regional governments have joined forces to rise to the challenge in a way that, as the Wall Street Journal puts it, hasn’t been seen since World War II with the arrival of incentives like the GI Bill and the absolute need to hire women and minorities.
Cities like Indianapolis and Pittsburgh are recognizing that it is critical to reskill workers of all ages and experience levels.
Today’s tech needs are no different from that era. When the stakes were high, the need was great, and there were more opportunities than traditionally skilled candidates. Cities like Indianapolis and Pittsburgh are recognizing that it is critical to reskill workers of all ages and experience levels through on-the-job training, apprenticeships, corporate-partnered bootcamps and other talent-building programs in order to enrich the existing workforce.
Marion County, where Indianapolis sits, saw that 55.7 percent of its unemployment insurance claimants reported that they had a high school diploma or less. Using funding from the CARES Act and the Rapid Reskilling Grant, Marion County expanded adult education services to support thousands of students in completing their high school diplomas, remediate basic skills and pursue training to support finding higher-paying roles in more high-demand fields.
In 2019, the Indiana Office of Technology removed a preference for applicants to hold a college degree for most jobs. It has also piloted programs like State Earn and Learn IT, which provides paid on-the-job training for candidates looking to move into a technology career.
The most important skills to develop in technology are practical versus theoretical, hence the value of focusing on training smart, capable people from high school dropouts all the way to the top rather than looking at a traditional resume.
In the ongoing battle to fill tech roles, Bain & Company encouraged businesses to focus on broadening their aperture to focus on capabilities they want employees to possess rather than technical skills. Strong programs and private/public partnerships like those in Indianapolis are already engaged in that solution.
The sooner that businesses in other cities recognize the importance of developing their homegrown talent, the better.
Tapping Into Opportunity
Hundreds of thousands of tech jobs are available in cities not named New York and San Francisco. In 2021, the National Association of Realtors stated that small, secondary markets would be the top markets for investment in 2021.
Savvy founders recognize that there are strong, dedicated and engaged potential hires in a second-tier city. Buffalo and so many other cities outside of Silicon Valley and New York City have outstanding universities and colleges. They also have many workers whose jobs have given them the soft skills they need to be incredibly successful. They just need to uplevel their understanding of technology.
One example: 43North’s chairman, Mike Wisler, in his role as CIO of M&T Bank, has overhauled its technology team from being over 50 percent third-party contractors to 80 percent in-house employees since joining the company by rethinking the approach to hiring and training employees. Odoo, a Belgian open-source ERP/CRM company, opened a Buffalo arm in 2020. Since arriving, the leadership has expanded its team and its real estate footprint, hiring more than 100 staff members from a variety of backgrounds, and boasts an 85 percent employee retention rate.
The Proof Is in the Population
Geographic brain drain, the diminishing of opportunities that drove so many people to seek opportunity outside of some of the most economically challenged secondary cities, resembles a house that has been slowly catching fire for the past 75 years, and we’ve all noticed very recently that we have to put the fire out. Reversing the effects of this will take significant effort and time.
It’s challenging to distill the many anecdotes across secondary cities about how programming changed peoples’ lives and how it improved their self-esteem and abilities into numbers. It’s also challenging to quantify the effects of reversing regional brain drain and what that does for cities in existential struggle. But some of the positive effects can be seen in numbers:
- Buffalo has seen 6 percent growth in population as of the 2020 census, the first increase in 70 years.
- House hunting in Buffalo increased by 107 percent, beginning in 2020.
- Columbus, Ohio has seen employment increase 11.7 percent while employment growth at the state level was flat. Columbus also saw a population increase of 12.5 percent between 2010 and 2020.
- The average tech salary in Pittsburgh, Penn. has jumped 14 percent since 2020.
- Demand for homes in Tulsa, Okla. has increased: Prices are up 7.6 percent year over year.
Cities from Salt Lake City to Atlanta and Tulsa to Columbus are not only reaping the benefits of a reconsidered approach to tech roles. We’re looking for brilliant people of all backgrounds to join our communities.
