Scott Ball / Rivard Report
San Antonio has nowhere to go but up in a national survey of cities attracting tech talent. The city finished 45th in a ranking of 50 large market metro areas, while Austin ranked 5th, Dallas-Fort Worth ranked 6th, and Houston ranked 30th.
The annual “Scoring Tech Talent” report is prepared by CBRE, a global real estate and market research firm. All Texas cities except San Antonio gained traction over the 2015 report when Austin was ranked 9th, Dallas-Fort Worth 11th, Houston was 34th, and San Antonio was 40th.
San Antonio’s move downward from 40th to 45th seems driven more by accelerated growth in other cities, given that San Antonio’s numbers continue to improve across most measures in the survey.
The report tracks where young tech workers are going to live and work, and how and why they choose destination cities. One clear trend that won’t surprise anyone is that young tech workers want to live and work in an urban core and eschew the suburbs. Two leading attractors are tech sector compensation and the size of the existing tech worker population. Tech workers with options prefer cities with a thriving tech worker culture. That puts a city like San Antonio at a disadvantage against cities like Seattle, Boston, or Austin.
However, cost of living is growing in importance as tech worker-saturated cities are becoming prohibitively expensive to buy a house or rent an apartment in. Workers sensitive to the general cost of living, especially housing costs, are prime recruits for San Antonio as it works to build a more robust tech sector and use its proximity to pricier Austin as a selling point. Leading tech cities such as San Francisco, Seattle, New York, and Washington, D.C. have some of the highest rent costs in the country. San Antonio rents climbed 15% from 2010 to 2015. Austin’s rose by 31% in the same period from a higher base.
“This is a report we’ve tracked in recent years, and we see a continuation of a couple of trends: On the one hand, our gross numbers of tech workers are growing, and our rate of annual growth is improving. We should feel good about that. Some of our efforts are paying off,” said David Heard, CEO of Tech Bloc. “On the other hand, our competition is not sitting still. Even while working from a larger base, many large cities are growing their tech talent at a faster pace than we are. So this underscores that we are nowhere near in the clear. We are starting to move in the right direction, but much work lies ahead.
“Metrics like these that illuminate job opportunities, our tax base, talent expansion, and educational attainment levels for our underserved populations are more telling than city metrics like population growth and geographic size of our city,” Heard added.
The good news for San Antonio is that the city’s tech workforce grew 16.4% from 2013 to 2015, a 3.1% increase in momentum over 2011 to 2013. That suggests that business leaders’ and elected officials’ increased focus on building and supporting the tech and cybersecurity sector is starting to pay off. The city’s tech worker growth rate was 15.7% in the 2015 report when San Antonio was ranked 40th out of the Top 40 cities. Even with the improved tech job growth, however, the gap between San Antonio and other Texas cities, where growth has been even stronger in recent years, is substantial.
“San Antonio is emerging as a hub for tech talent, evident in the rapid growth and robust presence of tech entrepreneurs and the ‘tech movement’ led locally by Tech Bloc. In fact, San Antonio is outpacing Austin and many major U.S. cities as the top destination for Millennials, due in large part to our competitive cost of living,” said Jenna Saucedo-Herrera, president and CEO of the San Antonio Economic Development Foundation.
“One of our goals at the SAEDF is to develop an environment where the tech industry and top talent thrive in order to attract corporate locations and expansions adding to the burgeoning entrepreneurial spirit that our region is witnessing. The San Antonio/Austin Corridor is evolving into a technology-rich region and we are excited to be a vital part of that movement.”
There is definitely room for growth. The 2016 CBRE survey found that Dallas-Fort Worth had 162,060 tech workers in 2015. Austin had 72,030, and San Antonio had 30,390.
The most important predictor of a city’s tech workforce growth is the percentage of workers in the market with a four-year college degree or higher. Leading cities have workforces with a college graduation rate approaching 50%. Seattle has a 58% college graduation rate among its workforce, while the Bay Area, Austin, Atlanta, Minneapolis, and Raleigh-Durham are all around 48%. San Antonio has a 25% graduation rate.
Gender diversity is an issue in every tech market. Even the most dynamic tech markets only have 30% of the tech jobs filled by women. San Antonio finishes near the very bottom with 22% of the tech jobs held by women.
Austin and San Antonio offer a compelling comparison when looking at how tech job growth is directly related to what demographers and geographers call “brain gain,” the measure of highly educated and talented workers moving into a city versus the number moving out. From 2010 to 2014, Austin added nearly 10,000 tech degrees to its local workforce and attracted another 14,000 “brain gain” workers to fill a total of 24,000 new tech jobs. San Antonio added 6,000 tech degrees to its local workforce in the same time period and attracted 3,000 “brain gain” workers to fill a total of 9,000 new tech jobs.
How those tech jobs break down by category matters, too. A city with a higher percentage of software developers and programmers in its tech workforce is going to be a much more dynamic job and wealth creator than a city where the percentage of jobs held by IT and systems workers is higher. Seattle has 55% of its tech jobs filled by developers and programmers, and the Bay Area, New York, and Boston are right behind it with 40-45%. Austin has 35% of its jobs held by developers and programmers. San Antonio has only 29%, a few percentage points above the cities with the least developer and programmer talent. With 59% of its tech workers in computer, support database, and systems, San Antonio ranks second nationwide behind Madison, Wis. with 62%. San Antonio ranks last among the Top 50 cities for the number of computer and information system managers, with only 4% of the city’s tech jobs fitting that description.
“I believe the numbers from the Tech Talent survey are indicative of what many in San Antonio see as a tremendous opportunity to capitalize on our unique assets, culture, and industries, and appeal to tech talent who is looking for an authentic community to start and grow their careers in,” said Will Garrett, co-founder of the Build Sec Foundry and director of CyberSecurity San Antonio. “Our cybersecurity ecosystem is full of robust assets that we are strategically working to align to support entrepreneurship, product development, and new companies that will in turn attract top talent that needs access to large commercial and defense enterprises.”
Cybersecurity, more than any other sub-category in San Antonio’s tech sector, seems to hold the most potential for growth, given the city’s well-established military and civilian cyber intelligence gathering missions, which serve as a pipeline for talented tech workers and the rapid growth in security development in general.
The survey shows how irrelevant general population size or growth is in measuring smart job growth and economic development. Austin, for example, is rated among the larger tech talent markets with more than 50,000 tech sector jobs, alongside Boston, Philadelphia, and Los Angeles. Its growth in tech-savvy Millennials from 2009 to 2014 was 7.5%. San Antonio is ranked among the smaller tech talent markets with fewer than 50,000 tech sector jobs, alongside Salt Lake City, Pittsburgh, and Columbus, all of which grew their tech-savvy Millennial populations at rates faster than San Antonio’s 7.8%.
The survey data offers San Antonio valuable insights as it hits the reset button on economic development strategies and works to improve higher education outcomes in the city. One key takeaway is that San Antonio is accelerating its tech sector growth, but is doing so from a back-of-the-pack position. Another key takeaway is that cities that grow smartly are pulling ahead of cities that simply grow.
Top image: Tech Bloc Co-Founder Lew Moorman speaks to members at Southerleigh Brewery at Tech Bloc’s May 2015 launch. Photo by Scott Ball.