While the Midwest continues to attract startups and investors as an alternative tech hub to Silicon Valley, its cities fail to crack NerdWallet’s top 15 as the best places for tech jobs in the country.
Madison, Wisconsin, was the highest Midwest city ranked (16th) in a recent report which attempts to rank US metro areas by their balance of tech-sector opportunity and cost of living.
NerdWallet analyzed 381 US metro areas with populations over 50,000 using data from the Labor Department’s Bureau of Labor Statistics and the US Census Bureau’s American Community Survey. The report weighed up the number of tech employees per 1,000 jobs, median tech-job wage, and median rent to form an understanding of the level of opportunity in a given city’s tech hub compared to the standard of living provided.
The proportional measure of tech jobs lacks the understanding of opportunity which a supply-demand analysis would provide, but it does raise an interesting point: big players make a big difference. The study found that cities which hosted federal government tech agencies or offices, or offices of Silicon Valley’s finest, scored much higher in the final ranking.
The need for big players is something the region should be acutely aware of. Previous reporting on Techli has identified the community approach to tech in the Midwest, often revolving around events and the establishment of local incubators. While this is all good stuff, it still lacks the punch that big-player presence could provide the region.
And big means big, Indianapolis is host to ExactTarget, often credited with inspiring the local tech scene especially since it was bought out by Salesforce; but that doesn’t quite seem to cut it, Indianapolis came in 58th on the report.
So, while the incubators, events, and competitions should continue their grass-roots development, the big politician-like swings through the region from Mark Zuckerberg and Tim Cook should be judged as successful on the caveat that they precipitate some presence in the region. Further, if I were a politician in the Midwest right now, I’d be lobbying Amazon hard to host their second headquarters.
The report also brings light to the oft-discussed deciding factor of living costs, showing that if costs are higher, wages tend to be higher. This is good and bad news for the Midwest. While it might dampen its cheaper rent as an advantage for workers, cheaper labor is still attractive to companies looking to move to the region.
And with the manufacturing sector in supposed decline, and the Midwest host to some of the nations most distressed tech hubs, the opportunity to provide affordable living is something that could be capitalized on.
Overall, the report is an attempt to measure an incredibly complicated interaction effect, and so should be viewed in the context of other relevant dependent and independent variables. Rent and salaries, for example, are slow-moving metrics which change over long periods of time and any invocation of them can only considered a retrospective.
The report doesn’t necessarily devalue local efforts to drive innovation and skills, but the need for some big tech players to enter the region and step up development should be a key focus for those intent on building the Midwest tech sector.