‘Silicon Prairie’ Communities Top List of Up-and-Coming Tech Markets
Looking for a place to launch–or provide a mortgage to–a startup? Oklahoma City, Kansas City and Jacksonville provide best potential for growth, while affordability and labor-competition challenges see Silicon Valley desirability fade, according to a new report from Zillow Inc., Seattle.
While Silicon Valley and Seattle might seem like the obvious places for tech start-ups to set up shop and large companies to site new offices, Zillow said a confluence of factors, such as rampant home-price growth and a seeming saturation of companies competing for the same limited pool of tech talent, have led some companies to look toward other options.
The Zillow analysis showed markets in the Midwest and South are most ripe for tech growth, with Oklahoma City, Kansas City and Jacksonville leading the way. Other cities on the list include Indianapolis, Cincinnati, San Antonio, Memphis, Austin, Louisville and Columbus.
The report said the Oklahoma City and Kansas City metros both score well for affordability–where typical-income earners are spending a relatively smaller share of their income on housing livability and the availability of a tech-skilled workforce. Other markets, such as Jacksonville, San Antonio, Austin and Cincinnati, have robust rents and/or home value growth, as well as more people searching into the area than searching out, suggesting these places are poised for growth and an influx of people. The analysis also showed traditional tech hot spots often fell toward the bottom of the list because of “eroding affordability and quality of life,” noting Los Angeles and the Bay Area have the worst affordability rankings of all markets examined in this study. Chicago–not typically thought of as a tech hub–was also near the bottom of the 42-market ranking.