Seattle’s tech scene has long had a reputation as the less mature little sister of Silicon Valley. But the Valley’s popularity may be its undoing as people increasingly see the benefits of pursuing the more attainable girl-next-door.
According to the Silicon Valley Competitiveness and Innovation Project’s (SVCIP) 2017 report, Seattle’s population is growing at nearly double the rate of Silicon Valley, driven by strong job growth in fields like tech and healthcare, a relatively lower cost of living, and lifestyle benefits of the Northwest. Amazon, in particular, has become a symbol of the tech industry’s role in Seattle’s growth, adding jobs at a historic pace and expanding its downtown campus.
But Seattle also is drawing the attention of big-name tech giants such as eBay, Dropbox, Facebook, Palantir and dozens of others who’ve established fast-growing engineering centers in the region in recent years. Those offices are diversifying the tech economy, and giving some tech workers in the Bay Area another alternative to live.
Seattle gains an average of 3,125 residents per month — about 42 percent from within the U.S. and 58 percent international migrants, according to the study. SVCIP studied the innovation economies of major tech hubs throughout the U.S. and researchers found the only region to outpace Seattle’s population growth is Austin, with an average of 3,393 residents added each month.
Silicon Valley, by contrast, loses approximately 832 residents to other cities within the U.S. but gains an average of 2,793 immigrants from other countries, bringing the average number of residents gained to 1,962 per month.
The numbers support the theory that Silicon Valley’s high cost of living and housing prices are forcing residents to consider other, more affordable hubs, like Seattle. The Valley’s median home value in 2016 was $935,000. That’s more than double Seattle’s median of $380,000, according to Zillow data cited in the report.
Seattle’s growth may portend a tech economy that stacks up more closely to the Bay Area, but it’s not there yet. Silicon Valley still far outpaces other tech hubs in terms of total venture capital investment, although other regions are slowly catching up.
Early-stage funding is a more complex picture. Silicon Valley saw a 22 percent increase in angel and seed funding, on par with Austin and outpaced by Southern California’s whopping 150 percent rise in early-stage investments. Seattle saw a 49 percent decline in angel and seed funding.
Silicon Valley also saw a faster rate of job growth in innovation-related related fields (eight percent) than any other tech hub. Seattle’s innovation jobs grew by two percent, on par with Southern California and lagging behind Austin’s seven percent and New York’s four.
It’s no surprise that Silicon Valley and New York have seen the biggest IPOs since 2010. Seattle is the weakest of the tech hubs in the SVCIP report when it comes to public offerings.
Seattle does stand out, however, in the diversity category. The SVCIP report measured the percentage of new entrepreneurs that are female in tech hubs around the U.S. and found that Seattle has the highest rate. In 2015, women accounted for 51 percent of Seattle’s new entrepreneurs, up from 46 percent in 2013. In Silicon Valley, that number dropped from 46 percent in 2013 to 42 percent in 2015. Nationwide, women make up just 39 percent of new entrepreneurs taking the startup plunge.
Despite Silicon Valley’s stronger innovation economy, it’s clear that Seattle is an attractive option for tech workers seeking job opportunities, a lower cost of living, or simply the beauty of the Northwest. What remains to be seen, is whether the investor dollars and more blockbuster startups will come next.
The SVCIP report was commissioned by the Silicon Valley Leadership group, a coalition of major employers in the region, and the Silicon Valley Community Foundation, which helps corporations with their philanthropic goals.
The study also examined metrics like patent filings, education in STEM fields, and academic research and development expenditures. The full report, with those numbers, is available here.