By Joel Kotkin and Michael Shires.
We are supposed to be moving rapidly into the “information era,” but the future, as science fiction author William Gibson suggested, is not “evenly distributed.” For most of the U.S., the boomlet in software, Internet publishing, search and other “disruptive” cyber companies has hardly been a windfall in terms of employment. As jobs in those areas have been created, employment has shriveled in old media like newspaper, magazine and book publishing (these industries lost a net 172,000 jobs from 2009 through 2014). In the 52 largest metropolitan areas that we studied, information employment declined for roughly half from 2009 through 2014. Overall, in information industries (a sprawling sector that also includes movie and TV production, radio and another big job loser, telecom) employment has shrunken 4.2% since 2009 to 2.7 million jobs, while total nonfarm employment in the U.S. grew by 5.1%.
Yet looking at the information sector give us an important picture of how these changes have shifted jobs to certain regions and away from others. Our rankings are based on employment growth in the sector over the short-, medium- and long-term, going back to 2003, and factor in momentum — whether growth is slowing or accelerating. (For a detailed description of our methodology, click here.)
By far the biggest winners in the information sweepstakes are areas that developed a strong engineering base before the rise of the Internet. This has provided the platform for the rapid growth of web-based businesses, including in fields such as entertainment, media, hospitality and transportation (like Uber). It’s not surprising then that the metro areas that have posted the strongest information job growth over the past 11 years are San Jose-Sunnyvale-Santa Clara and San Francisco-Redwood City-South San Francisco.
The growth in these hot spots has been nothing short of spectacular: information employment rose 60.2% from 2009 through 2014 in the San Jose area to 70,900 jobs, 6.9% of total employment in the metro area, while the San Francisco area has seen a 51.3% surge over the same time span to 55,800 jobs, representing 5.4% of the total workforce there.
After the dot-com bubble burst, Silicon Valley tech employment declined consistently until 2010, since which the rebound has been dramatic. While San Francisco and areas in the northern end of Silicon Valley have not yet reached the peak employment levels seen during the bubble era, the southern end centered in San Jose and Santa Clara has easily outstripped its peaks of the early 2000s. And with information employment continuing to surge, it’s too early to say these areas have hit their “information” peak. Last year, the number of information jobs jumped 16.0% in San Jose while San Francisco experienced an 8.3% jump.
Other traditional tech centers that have thrived in the new era include No. 9 Seattle-Bellevue-Everett, Wash., where information employment has grown a healthy 9.2% since 2009 and No. 14 Boston, where employment is up 5.1% since 2009. Compared to the Bay Area, these regions appear less at the center of the web-based media and services industries, but their overall tech economies remain very strong.
The Rise Of Sun Belt Information Hubs
Some of the most rapid growth in information, however, is taking place not in the older established tech hotbeds but in the lower-cost metropolitan areas of the Sun Belt. Five of our top 10 ranked metropolitan areas are located in the belt that stretches from the Atlantic coast to Arizona, led by No. 3 Austin-Round Rock, Texas, where information employment has risen 30.8% since 2009 to 25,800 positions.
Some of this reflects a gradual movement of companies, notably from Silicon Valley, to the Texas capital. Smaller Bay Area firms such as digital advertising firm Marin Software have expanded there while Apple is expected to add 3,600 jobs there over the next few years.
Several other Sun Belt tech hubs also are high on our list. In fourth place is Raleigh, N.C., on the strength of a 13.8% jump in information employment since 2009. It’s followed in fifth place by No. 5 Charlotte-Concord-Gastonia, N.C., which boasts significant sources of venture capital, and No. 8 San Antonio-New Braunfels, Texas, which has seen the rise of locally based companies such as Execupay as well as large scale expansion of Bay Area firms such asOracle that are flocking to the region.
One big advantage these economies have compared to the ultra-pricey Bay Area is lower home costs, something that matters to tech workers as they enter their 30s. But the biggest challenge for some of these up and coming areas, such as Phoenix, is the dearth of large locally headquartered companies that can help create a management talent base and some tech street cred.
The Battle Of The Bigs
One key battleground for information supremacy is in the country’s media centers. The clear winner has been No. 7 New York, which has recorded a 13.0% jump in information jobs since 2009 to 185,200 jobs – second most in the country behind the Los Angeles metro area. That came amid an 11.8% decline over the same timespan in all publishing jobs not involving the Internet (note that we don’t have the level of detail at the local level to separate out software publishing from that figure, but it’s safe to assume the bulk of the decline was in newspapers and book and magazine publishing). The 13% jump reflects strength in new media as well as motion pictures, TV and radio, more so than technology, a field in which New York remains very much an also ran, right in the middle of the pack in terms of creating STEM and tech employment. But boosters claim this is changing, pointing out that there are now 7,000 tech firms employing 100,000 people in the area.
Although New York is well behind the Bay Area in pace of growth, it is clearly outperforming its traditional media rivals in the rush towards digital media. Its growth dwarfs that of No. 29 Chicago, where information employment has ticked up 0.4% since 2009. The Los Angeles-Long Beach-Glendale metro area, still home to the largest number of information workers, has managed lackluster growth of 3.5% since 2009, including a 2.0% decline last year, which puts it 28th place on our list. For all the talk about L.A.’s emergence as a new media rival to the Bay Area, the numbers suggest this is more hope than reality. Over the past five years motion picture and television employment has not been hard-hit like traditional publishing but is only experiencing slow growth. No Facebook, Google or Apple equivalent has emerged in Southern California, although some hold out hope for L.A.-based Snapchat.
A decade or two ago there was talk about the nation’s capital challenging New York’s media dominance. But as has become evident over the past year, the Beltway’s appeal is dropping, even when it comes to producing sound-bites and punditry. The core Washington D.C.-Arlington-Alexandria metropolitan division places a mediocre 43rd, with a 3.9% decline in information employment since 2009. Other areas around the capital did poorly also, including 41st-ranked Northern Virginia and 46th-place Silver Spring-Frederick-Rockville Md. which also have lost information jobs since 2009.
Surprises And Up And Comers
Generally speaking manufacturing, energy and logistics-oriented economies do not do well in terms of information jobs. As of now there’s no Rust Belt version of Facebook or Google, and most factory towns do very poorly. But there’s one outstanding exception to this rule: Warren-Troy-Farmington Hills, Mich., which places 10th on our list. This area, sometimes referred to “automation alley,” is Michigan’s premier tech region. It is where software meets heavy metal, with a plethora of companies focusing on factory software and new computer-controlled systems for automobiles. It is home to engineering software firms like Altair, which has been expanding rapidly, and also where General Motors recently announced plans for a $1 billion tech center, employing 2,600 salaried workers.
If we are looking for future information hubs, one place to look would be our small and mid-sized metro area lists. Here the top ranks are dominated by college towns, including Baton Rouge, La., home to Louisiana State University, where information employment has surged 28.6% since 2009. It places third on our mid-size cities list, which also features such high-flying college towns as fourth place Provo-Orem, Utah (Brigham Young), No. 5 Durham-Chapel Hill (Duke, University of North Carolina), No. 6 Madison (University of Wisconsin), and No. 7 Ann Arbor (University of Michigan).
The information sector may not be a big job generator, but it does play a critical role in several of our most important economies, including the San Francisco, New York, Los Angeles and Austin metro areas. The clear shift we are seeing towards consolidation of media with tech – a la Apple, Netflix and Google — will likely underpin a movement of these coveted jobs from traditional media centers to the Bay. But given the unfriendly business atmosphere in California, and the super-high prices for houses, it also makes sense to look at secondary information centers, both in the Sun Belt and among college towns, which may attract even more of these jobs in the years ahead.
Cross-posted at NewGeography.