Most tech hubs are located in areas where the cost of living is very high. From expensive housing, intolerably long travels, and fierce rivalry, these conditions are not favorable to tech startups and young entrepreneurs. These are the challenges dogging tech centers such as Seattle, the San Francisco Bay Area, Boston, and Los Angeles. Even though these areas attract technology talent and venture capital funding, the cost of living hinders small tech companies from discovering these markets. It is even very challenging to retain skills in these areas. The environment has not only affected smaller technology firms but also the giant companies. Asa a result, these firms are moving their headquarters from the swarming tech scene.
Zillow has conducted an analysis to find out conducive environments for tech firms or startups to erect their next headquarters. Zillow leveraged its data products by tapping the US Census and Bureau of Statistics’ servers. It partnered with Ookla for internet intuitions based on Speed test data and LinkedIn for the disposal of tech talents based on their skills.The inquiry focuses on aspects that would attract talented workers and thus present sturdy chances for tech firms seeking talents outside the bay area.
Jointly, they zeroed in on five classifications that define the readiness of the markets when it comes to tech development. The demographics and the labor market are the two big factors involved when referring to the dynamics that are synonymous with a big economy. Second, technical skills, which are the factors that show the market has a potential or ready market. Third is market desirability, which means that the market has the ability to attract individuals. Fourth is housing affordability referring to aspects that indicate on how reasonably priced the houses are. The other factor is livability, which translates to the demand for the living space in that market.
Silicon Valley tops the list of openings suitable for startups as well as the markets in the South and the Midwest. These can draw tech firms and the talents that they are willing to hire. A report by Jenny Ying, a data scientist, shows that employers need to reconstruct their pay structures to retain talents due to the cost of living. Failure to this, employers might have to pay for the extra expenses incurred.
Some of the affordable markets for tech companies include Kansas and Oklahoma City, where the cost of living is relatively low. Desirable markets include Florida, Austin, Cincinnati, Jacksonville, and San Antonio. Here, the increase of home values and rent are robust, which ultimately results in an influx of individuals.