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The Three Tech Cities That Aren't San Fran And New York

We look at the three cities that offer the best opportunities for high tech companies

13Nov

When people think about tech cities, they think about New York and San Francisco. Places where silicon valley and silicon alley are commonly used and are well established bases for the high tech companies with the most exposure.

But is this really the case?

We are finding that other cities have in fact seen higher rates of growth in high tech jobs than these two. So which three cities are the alternatives?

Austin, Texas

Since 2001, Austin has seen an increase of 41% in tech company employment. This compares to a relatively stagnant San Francisco and a declining New York. This is because the big names in those cities are mainly social media. Despite being global, multi-billion dollar companies, they actually only have a combined employee total of around 6,500.

So why is Austin a high tech haven?

Despite many companies having headquarters elsewhere, many choose Austin as a key city for satellite offices. It is considerably cheaper to buy property than New York or San Francisco, meaning that employees have more disposable income and Austin offers a higher quality of life, partly due to this.

This also means that whilst companies may have their headquarters in either New York or San Francisco, the expansion that they achieve is felt most profoundly in Austin. With the opportunity to expand employee count as office space is considerably cheaper.

In fact, it is an ideal place to do business across the US. This is because as it is central time rather than East or Pacific, it is only a maximum 2 hour difference to either, rather than the three hours from coast to coast. This means that issues that may arise earlier on the East Coast can be dealt with in Austin quicker than San Francisco. It also means that there is an additional hour to work with a West Coast company without unnecessary time in the office.

Combine this with their heritage as the home of Dell and their strong links to the University of Austin and its famous computer science department, and it is a worthy adversary to the top two.

Boston, Massachusetts

There is a reason that some of the biggest high tech conferences take place in Boston, it is well established as as technology Mecca.

One of the main reason for Boston’s success is that they have some of the most successful colleges in the world in Harvard, Boston University and most importantly MIT. Students from these colleges often settle in the city, giving high tech companies a strong pool of potential employees. This has historically been one of the most important aspects in Boston’s success as a tech hub. The ring road that surrounds the city has surprisingly had ‘technology’ companies based there since the 1950’s such as HP and Polaroid.

It also has proximity to New York and is only 5 hours behind London, meaning that international business is much easier than any city on the West Coast, where the 8 hour difference makes live communication with Europe difficult.

The price of housing is also much cheaper than New York and San Francisco, with the average price being half that of San Francisco and 2.5 times less than New York. It also provides good transport links, with direct flights to most countries from Logan Airport. With all of these taken in to consideration, it provides a good quality of life and the closest to small town living that you can find in a city, which attracts people and companies to the area.

London, UK

Despite the UK being famous for castles, royalty and tea, London has become one of the world’s technology hubs in recent years. It has a vibrant technology scene and Silicon Roundabout is quickly becoming Europe’s premiere high tech development spot. With tax incentives being made available from the UK government, it is gaining a reputation as a good place to found and grow a high tech company.

It is also a gateway country for business as it allows for real-time communications with almost every country in the world thanks to GMT. For instance, it is 5 hours ahead of New York and 5.5 hours behind Mumbai. It therefore allows for global growth at a much quicker rate and communication with growing markets is considerably easier.

In addition to that, much like New York and San Francisco, it has some of the world’s largest venture capital firms. Proximity to willing investors is always going to be of benefit to high tech companies who are looking at either selling or gaining funding for growth.

Unlike the previous two examples, London’s prices are comparable to both San Francisco and New York, with house prices being roughly comparable to San Francisco, but the cost of living is higher than both.

With more companies looking to either expand and individuals looking to start their own company in the high tech space, it may not be wise to look at the ‘Zuckerberg’ model by moving to San Francisco or New York. Looking at what makes business sense rather than what has been perceived to be the best place to do business is the only way to situate your high tech company where it is most likely to be successful. 

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