Other places would kill for Seattle’s assets. I’ve been writing a variation of this thought for 15 years.
The reality was apparent in 2018 when some 240 localities were willing to shell out huge subsidies for Amazon’s HQ2, promised to be “full, equal” to Seattle’s headquarters.
As it turned out, no homicide was necessary. Start with a dysfunctional City Council majority, add a pandemic and its effects, throw in metropolitan areas and states upping their game and … presto! Seattle’s facing new competitors.
The title of a new report from the Brookings Institution shouts the news from the rooftops: “Tech jobs are finally spreading out, spurred by private investment and federal initiatives.”
The study from Brookings fellow Mark Muro and research assistant Yang You indicates recent growth in five critical digital sectors “is now dominated by a group of nonsuperstar cities wholly different from the Big Tech meccas that ruled for years.”
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The information comes by tallying job growth in five key digital sectors, including software development, computer systems design and web publishing.
Those superstars include coastal cities such as San Francisco; San Jose, Calif.; Los Angeles; New York City; Boston; and, of course, Seattle. With high concentration of tech sectors through the booming 2010s, they accounted for nearly half of the nation’s technology jobs created between 2015 and 2019.
Now, the geography of technology jobs is changing.
Between 2020 and 2022, “rising star” metros such as Dallas; Austin, Texas; Denver; Salt Lake City; and Miami posted the largest increases in digital services jobs. Houston; Nashville, Tenn.; and Jacksonville, Fla., also saw surprising growth in tech jobs.
Seattle barely saw growth: 0.1% during those years. But former tech stars such as San Francisco, San Jose, Boston and New York City faced larger declines, an unimaginable turn after decades of industry concentration.
One force propelling the shift is $230 billion in private investment in semiconductors, clean energy and other advanced industries, as well as reshoring of conventional manufacturing. Another is federal money: a major portion of the $3.8 billion allocated by Congress this past year was for metro areas in the Intermountain West, Midwest and South.
The CHIPS and Science Act allocates $280 billion to increase U.S. semiconductor capacity and marshal research and development, as well as create regional high-tech hubs.
U.S. chip capacity is a fraction of where it once stood and the legislation is intended to raise it, an important national and economic security aspiration in a period of “Great Power Competition” with China.
This isn’t the only area where Seattle is facing competition.
According to the Milken Institute’s Best Performing Cities report, Provo-Orem, Utah, ranked at the top, followed by Austin and Raleigh, N.C. The top performers are rounded out by Nashville, Dallas and Boise, Idaho.
Milken’s research “reflects cities’ effectiveness at leveraging their resources to promote economic growth and provide their residents with access to the essential services and infrastructure needed for success. Its components include job creation, wage growth and the high-tech sector’s output growth. Since 2021, the index also includes measures of housing affordability and broadband access that reflect access to economic opportunities of cities’ residents.”
Seattle ranked No. 34 in the 2023 assessment compared with No. 13 in 2021. In job growth between 2016 and 2021, Seattle came in at No. 78 out of the 191 major metropolitan areas counted.
To be sure, Seattle continues to enjoy a strong economy. The most recent World’s Best Cities report, compiled by Resonance Consultancy’s ranking of the planet’s leading urban destinations, ranks Seattle No. 8, behind New York City, Chicago, Los Angeles, San Francisco, the other Washington and Miami.
About Seattle, Resonance reports that despite the pandemic, the city “has avoided the economic impact that continues to hobble other U.S. urban centers. Population growth remains at just under 1% annually, fueled by talent … and pulled by influential titans of industry in town, from Amazon to Starbucks to Zillow.”
The Brookings Report, although noting that Seattle showed small tech job growth from 2020 to 2022, also showed that the Seattle-Tacoma-Bellevue metropolitan area had nearly 188,000 digital service jobs. Those ranged from the workforces at major companies, including Amazon and Microsoft, to startups.
By comparison, Dallas had 143,000 tech jobs, Denver 83,000, Austin 83,000, Miami 51,000 and Nashville 24,000.
Seattle boasts a natural deep-water port, a world-class university, Boeing and a major aerospace cluster (an advanced industry sector, too), spectacular scenery and lower living costs than Silicon Valley. This continues to make it a destination for world-class talent and the high-end outposts of Bay Area companies.
In addition, many of the new competitors face challenges of their own. Dallas and Austin, for example, are blue islands in red states with policies, such as outlawing most abortions, that make them less attractive for top talent and investment. Many of the same red-state policies are being enacted in Tennessee and Florida.
Phoenix, the fifth-most-populous city in the nation, has only one real university (the main campus is in suburban Tempe, Ariz.) and lacks many of the urban amenities that make an area inviting to the best tech workers. Arizona has been underfunding education at all levels for decades.
Phoenix doesn’t make the Brookings list. And the advanced industries consist largely of semiconductor plants, which are becoming highly automated, and data centers, which provide few jobs. Both use much water in a metropolitan area where the summers are getting hotter and longer.
Still, the lesson is clear. Seattle can’t be complacent.
New competitors are out there. And they’re hungry.
The opinions expressed in reader comments are those of the author only and do not reflect the opinions of The Seattle Times.
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