With Most Tech Jobs In A Few Cities, Smaller Communities Miss The Economic Advantages

The Brookings Institution recommends federal intervention to encourage tech companies to expand their operations beyond a few hubs.

By Jill AmentMarch 12, 2020 11:25 am,

The tech industry has been booming over the past decade. But much of the industry’s growth, and the money that goes along with it, is concentrated mainly in a few cities: San Francisco, Seattle, Austin, Denver and San Jose. The disparity is so severe that the Brookings Institution, which researched that disparity, recommends intervention by the federal government to get tech companies to branch out to other cities.

Nicole Flatow, an editor at City Lab who wrote about the Brookings Institution’s report, says its recommendation is more forceful than its usual stance.

“[It] is above and beyond what they have done in the past, which is just to observe the phenomenon,” Flatow says.

She says some smaller cities have tried on their own to attract tech jobs. But those local success stories won’t be enough to catch up with the growth of tech sectors in those five main cities.

A large-scale intervention could bring tech companies to cities that are considered “distressed” but that also have potential, Flatow says. But doing so would mean those cities would need the infrastructure, a large enough population and academic institutions to provide a skilled workforce. Even a handful of new tech jobs in one of these cities could start a domino effect.

“Once a few companies come there, they have now created a new talent draw that then perpetuates the appeal of additional tech companies to come there as well,” Flatow says.

But there is a flip side to a thriving tech sector. Flatow says things like heavy traffic and high costs of living plague major tech hubs. One solution, she says, could be redistributing some of those jobs throughout the country so the workforce, and the associated problems, are dispersed.

“The net effect is that some cities are seeing the problems of overconcentration, which include unaffordability and traffic,” Flatow says. “Whereas, other places that are considered distressed, continue to see their economies falter as the overall economy becomes more and more tech focused.”


Written by Laura Morales.