Compared to full-steam-ahead Silicon Valley, tech talent growth in Philadelphia follows a more slow-and-steady cadence, with plenty of room to grow — and that room means the city will likely be better off in the long run.
National real estate services firm CBRE’s annual tech talent rankings placed Philadelphia at #22 on its list of most promising North American metro areas for attracting and cultivating tech talent, for the second year in a row.
To calculate its rankings, CBRE used averages over a five-year period in order to ensure that events like, for instance, a major tech firm moving into a city and hiring a bunch of workers in one year would not cause an outlier in data over time.
Some key takeaways from CRBE’s report:
- Tech-related jobs make up 3.9% of Philadelphia’s workforce, a higher number than the 3.7% national average. At 112,340, the amount of tech-related workers in Philadelphia is the 13th largest nationally among metro areas.
- Almost 27.9% of Philadelphia population are millennials, a statistic that CBRE said reflects the city’s large community of academic institutions. Philadelphia ranked eighth best in terms of millennial residents’ proportion of a total urban population.
- The average annual rent in Philadelphia amounts to 17.1% of the average tech worker’s wages, placing it at 23rd on that list.
- Philadelphia had 6,702 tech-degree completions in 2018, marking an increase of 59.2% from 2014 to 2018. From 2015 to 2019 there were 25,574 tech graduates compared to 12,730 new jobs in tech.
The 22nd spot is 20 behind D.C.’s #2 ranking, but also 11 behind Baltimore, named the 11th most promising North American metro area. This gave the Technical.ly newsroom some pause: Doesn’t Philly clearly have a bigger tech economy than the Maryland city with less than half its population?
The answer is yes — but size isn’t what’s being ranked here. While Philadelphia and Baltimore share certain similarities, CBRE First VP Rija Beares contextualized what Philadelphia’s ranking on the tech list means.
“It’s almost like comparing apples and oranges,” Beares told Technical.ly. “It’s a ranking of tech talent growth. I and most companies look at [it] from the perspective of jobs.”
Philly has a bigger tech talent pool by about 30,000 workers, for instance, but Baltimore’s rate of growth over time is more dramatic at 16.9%, compared to Philly’s 12.8% — and tech workers make up a larger percentage of Baltimore’s workforce (5.8%) than Philly’s (3.9%).
That’s not a bad thing: Philly is more “even keeled,” Beares said. Steady jobs in areas like STEM and healthcare keep a big part of the city’s workforce employed, but what’s most important in that slow-and-steady assessment is that “Philly doesn’t see the high highs and lows lows” in its economy because of its broad diversity of job types in general. That means we’re more recession-proof.
Accordingly, “I don’t think you want to be a fast-growth city” and shoot up the rankings list, Beares said. Fast growth means fast falls.
(It’s something we’ve heard from other experts before. As FS Investments Chief U.S. Economist Lara Rhame told us this January: “The downside is that when the economy is really booming, we don’t get as much of that positivity. But when it’s down, we also don’t sink as low.”)
Beares — who typically works out of CBRE’s Radnor office when there’s not a pandemic going on — said there is room for optimism when forecasting Philadelphia’s tech economy because of the number of local college graduates studying tech-related disciplines. Per CBRE research, the total number of tech degrees coming out of Philly have grown about 60% in five years.
She added that brain drain, or the loss of skilled professionals, can actually be a good thing in terms of Philadelphia’s tech economy because it means the city has not maxed out its market for professionals in the field.
And with a booming life sciences industry that will likely produce tech spinoffs to support it, tech jobs will grow there, too.
“Total tech jobs will continue to grow as we have organic growth in this market,” she said. “[After] jobs and degrees, the rest will come. If you have those two fundamentals continue with job growth, the wages will grow.”