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CTC in the News

CTC Announces New Technology Parks Research:

CTC Report Cites Advantages to

High Tech Companies in

‘Second Tier’ Locations

Philadelphia, PA – An assessment of potential urban technology zones in the United States by researchers from CTC uncovered several metropolitan areas ripe for technology growth currently being ignored by national and international firms.

Historically, technology zones have been popular in greater Boston, the San Francisco Bay Area and near universities in the United States. Campus-like settings are popular. For example, Research Triangle in North Carolina receives tremendous press from their brand, but their metropolitan technology workforce is relatively small and the prowess of the area is overstated compared to other districts. Raleigh-Durham recently ranked only 31^st among total tech workers compared to other metropolitan areas in the United States.

Recently London proved that large cities are extremely popular as technology destinations when leaders announced East London Tech City, a planned technology hub that will include Cisco Systems, Facebook, Google, Intel, McKinsey & Company and Vodafone. Imperial College London, Loughborough University and University College London will serve as academic partners. The city’s large workforce was a draw and the research universities were pleased to expand current footprints.

While few cities have the cachet of London, drawing unique talent from well-educated technology districts in large metropolitan areas is precisely what CTC research shows major firms seek. Unfortunately, like their brethren in the retail world, several sizeable markets featuring outstanding workforces and research universities are ignored and the same grouping of cities receive technology investment every year. While this concentration in popular places (clustering) benefits innovation, a negative externality has emerged. Districts like the Bay Area, Washington D.C. and Seattle are becoming extremely expensive and young innovators are squeezed out of the market.

The CTC report, Urban Technology USA, indicates that this clustering may establish a handful of mega-firms and several small companies, but few in the middle, creating a hollow center for high-tech firms in popular districts. Since investors say they are willing to pay for promising technology no matter the location, the lack of investment in many U.S. cities is puzzling.

“Technology start-ups in key districts are sending their work overseas to save money and often they can gain significant savings just setting up the work in cities like Pittsburgh or Milwaukee,” said Jake Sudderth, CTC’s Director of Research.

Albany, Baltimore, Buffalo, Chicago, Cincinnati, Cleveland, Kansas City, Milwaukee, Minneapolis-St. Paul, Philadelphia, Pittsburgh and St. Louis all ranked high in terms of potential for future technology investments. Communities like New York and San Francisco were downgraded because of the investment costs necessary to launch operations and the barriers to entry in place.

“The Bay Area, Boston and New York are mature zones for entrepreneurs seeking capital and expertise for an idea that might grow into a public company, but technology entrepreneurs will tap these markets naturally as they grow. They will find that financial experts in other large cities lead them to these sources anyway,” said Sudderth.

“While it sounds romantic to move a technology firm to specific areas that receive notoriety, similar to moving to New York or Hollywood to launch an acting career, our data shows that price points, worker productivity and production will likely be just as high, if not higher, in second-tier [less expensive] technology centers. The only business element that is adversely affected is the sales process if specific clients require significant travel to their place of business and they are located in a distant territory.” 

High-tech manufacturing, communications, software and computer-related services defined “technology” for the study, which incorporated all forty-five Standard Industrial Classification (SIC) codes related to technology. Six key measurements were used to conduct the report:

• Availability of talent (potential employees, current workforce, local students)
• Research universities
• Research pool (diversity of services and talent in the region)
• Technology entrepreneurs - number
• Technology entrepreneurs - variety
• National and international investment zones - technology

Interested parties may purchase Urban Technology USA from CTC. For more information please contact the CTC research department at 206-280-1478.     

About CityTownCountry Research
CTC is a dynamic urban research and consulting group that profiles and identifies trends. The firm surveys and researches market districts for developers, planners, municipalities and entrepreneurs.





CTC Team

Jake Sudderth: Director of Research/GM

Jason Arbillo: Executive VP

Margaret Sando: Customer Service Mgr