Consider Reinvesting Where Tech Jobs are Growing

Consider Reinvesting Where Tech Jobs are Growing

 

According to a recent Wall Street Journal article[i], large tech companies like Microsoft, Google and AirBnB, as well as smaller tech firms like Gong are increasingly expanding their footprint in markets outside the Silicon Valley, in part to improve their workforce diversity but also to reduce expenses.

Perhaps the best example of this trend is Austin, which continues to rank among the fastest growing cities in the country, drawing new students, recent graduates and most importantly, large employers every year.

North Carolina’s “Research Triangle”, located in the Raleigh-Durham area, is anchored by three major universities: NC State, UNC Chapel Hill and Duke. Combined with a low cost of living and a diverse population base, the Raleigh area is a hot spot for a wide array of employers. Major tech firms include Dell, Intel, Lenovo, Oracle and Nvidia.

Atlanta also exemplifies this phenomenon, as its diverse demographics and strong local universities (e.g., Georgia Tech, Emory) supply an attractive pool of potential employees for tech firms.  Atlanta is home to sixteen Fortune 500 companies, as well as Calendly, a Black-founded local startup, and Peloton, founded by two Georgia Tech grads.

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As the above graphic illustrates, West Coast metros like San Jose and Seattle are suffering from high costs-of-living, with San Francisco now exceeding New York City. Washington, DC and Boston also are expensive places to live, especially for younger workers with student loan debt.

The future of the American economy is technology, and tech employers will seek to build their workforces in affordable cities with diverse, educated employees. If long-term employment and economic growth factor into your investment analysis, then cities in Texas, North Carolina, Georgia and Arizona may be worth considering over cities in the Northeast or West Coast.

 

[i] Companies Seek Diverse Cities, Wall Street Journal, March 20, 2021

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Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services offered through Concorde Asset Management, LLC (CAM), an SEC registered investment adviser. Insurance products offered through Concorde Insurance Agency, Inc. (CIA). 1031 Capital Solutions is independent of CIS, CAM and CIA.