Cushman & Wakefield Launches Inaugural ‘Tech Cities 1.0’ U.S. Report: Surprise findings in a Top 25 that otherwise secures Silicon Valley’s crown as king of tech

Cushman & Wakefield Launches Inaugural ‘Tech Cities 1.0’ U.S. Report: Surprise findings in a Top 25 that otherwise secures Silicon Valley’s crown as king of tech

KANSAS CITY, MO., June 8, 2017 – Kansas City has emerged in 22nd place within the top 25 U.S. tech cities, with San Jose (Silicon Valley) and San Francisco capturing the first and second spots respectively, according to Cushman & Wakefield’s inaugural “Tech Cities 1.0” national report launched today.

“This accomplishment is the result of more than a decade of work from different parts of the community,” said Michael T. Mayer, SIOR, Managing Principal of Cushman & Wakefield’s Kansas City office. “One of the most exciting parts of being included in this list is that it will generate more attention to the diverse successes that led to this national recognition. The city is a great place to be now, and it just keeps getting better.”

The top 25 tech cities were determined by analyzing the concentration of factors such as talent, capital, and growth opportunity – the key ingredients that comprise a tech stew. The heartiest of these tech epicenters are: 1. San Jose, CA (Silicon Valley); 2. San Francisco, CA; 3. Washington, DC; 4. Boston/Cambridge, MA; and 5. Raleigh/Durham/Chapel Hill, NC.
Cushman & Wakefield created the “Tech Cities 1.0” report to provide greater insight for its clients and industry stakeholders into existing and emerging tech centers that are driving much of today’s U.S. economy.

Ken McCarthy, Cushman & Wakefield’s New York-based Principal Economist and Applied Research Lead for the U.S., states that “tech is in everything” and that people would be left behind if they did not adopt technology and change with that technology.

“Basically every company today is a tech company in one way or another. We’re all using it, we’re using various aspects of tech companies to do various things,” Mr. McCarthy elaborated. “Whether it’s Salesforce as customer relationship management, or Workday for HR, and various other database programs, the old way of doing business just doesn’t work anymore.”
Report co-author and Regional Director, Northwest U.S. Research at Cushman & Wakefield, in San Francisco, Robert Sammons, said that while it was not surprising to see San Jose (Silicon Valley) and San Francisco continue to dominate, that mass-transit issues and escalating housing costs in those areas have fanned a tech spillover into secondary markets such as Austin (no. 7), Denver (no. 8), San Diego (no. 9), and Salt Lake City (no. 24).

Local factors also play an important role in Kansas City’s rise, according to Cushman & Wakefield’s Senior Director Miles McCune, who credits city initiatives that support tech incubators and organizations such as ThinkBig Partners, a hybrid of technology-focused accelerator, innovation center and co-working space. Another draw is The Kauffman Foundation, a global leader in entrepreneurial development headquartered in Kansas City.

The high level of educational attainment in Kansas City is another key point of differentiation. Students rank well ahead of national averages at every level. In fact, 43.5% of residents who are 25 and over have at least an associate’s degree, compared to a national average of 38.8%; and, for those with bachelor’s degrees or higher, the average is 35.8% versus the national average of 30.6%.

Out-of-market companies also are looking to position themselves near tech firms in Kansas City, such as auto dealership tech firm AutoAlert and health information tech firm Cerner Corporation. And shared workspace provider WeWork just inked a 15-year deal to open an office in the Crossroads area. A favorable tax climate, lower housing costs, and the overall cost of living also have been consistent factors in attracting an increasing number of tech companies to Kansas City rather than Seattle or San Francisco.

Mr. Sammons cited Seattle’s cost-of-living as a lingering issue, somewhat mitigated by a recent uptick in residential development that’s outpacing San Francisco’s, as well as mass transit challenges. “Seattle has played catchup over the past few years but with housing creation now outpacing that of the Bay Area and with a huge $54 billion transportation initiative that recently passed at the ballot box, it will likely allow it to compete much more aggressively with those markets at the very top of the list.”

“In the case of New York, when we started to see a growth in tech employment here about four or five years ago, one of the big issues for the companies coming to New York, particularly from San Francisco or Silicon Valley, was a lack of the skilled labor force they needed, particularly engineers,” Mr. McCarthy said. In terms of Los Angeles, both Mr. McCarthy and Mr. Sammons noted its exceptionally diverse economy.

“Media is important, and you can’t lose sight of the fact that historically it’s also been an important manufacturing and industrial center,” Mr. McCarthy said, “There are myriad industries centered in LA, which has a good talent pool, and I would expect that also will come into play as we start to see these things evolve.”
For a copy of the Tech Cities 1.0 report visit Cushman & Wakefield here.

By |2018-04-28T09:05:13-04:00June 8th, 2017|In the News|0 Comments

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