The Amazon HQ2 hullaballoo threw two important economic trends into sharp relief over the past year.
The first is communities across the United States are starving for tech jobs. That became clear in the antics cities pulled and incentive dollars they were willing to spend just to get on Amazon’s radar. The second lesson? Those efforts don’t matter much when talent is the name of the game and only a handful of cities produce enough tech workers to satisfy the appetites of these massive job creators.
The result is “winner-takes-all urbanism” in which rich cities get richer and the rest of the country falls behind. The trend isn’t likely to slow, according to new research from the Brookings Institution.
What the numbers show: The tech sector is concentrating in a handful of cities even faster than it was a few years ago.
The top 10 cities producing the biggest share of digital services account for 44.3 percent of all tech jobs. Nearly half of all new tech jobs created between 2015-2017 were in those top 10 cities.
Just five cities — San Francisco, Seattle, San Jose, Los Angeles, and Austin — captured 34 percent of all new digital services job growth between 2015-2017. San Francisco and San Jose have 10.7 percent of the country’s tech jobs, up from 10.1 percent in 2015.
Where we’re headed: Based on the Brookings research and recent headlines, the country is headed toward deeper economic division.
Amazon chose to split its second headquarters between two of the richest and most powerful cities in the nation: New York and Washington, D.C. The company isn’t alone in this decision. Over the past few weeks, other tech giants have been announcing plans to expand beyond their San Francisco and Seattle strongholds. But rather than locate in communities starving for the tech prosperity their peers are experiencing, tech titans continue to choose existing innovation hubs.
Last week, Apple revealed plans to open a 15,000-person campus in Austin with smaller satellites in Seattle, San Diego, and Culver City, Calif. Just today, Google confirmed its rumored New York City expansion to 14,000 employees.
Update: Amazon does employ thousands of workers outside of its headquarters locations across fulfillment centers, Whole Foods locations, and other operations. More than 50 percent of Amazon employees work outside of Washington, California, New York, and Massachusetts, according to Adam Sedo, a spokesperson for the company.
The upshot: The widening chasm between America’s biggest cities and the rest of the country is driving some of the most significant political and economic trends in the country. Despite a strong economy and low unemployment, communities across the nation are not feeling the effects of prosperity. The trend doesn’t seem likely to slow, with tech companies pursuing talent above all else and the industry’s natural tendency to cluster.