Austin doesn't have the most tech-oriented workers. That distinction goes to bigger metros including the Bay Area, New York and even Dallas, Denver and Houston.
It's not particularly cheap, either.
Between rents and salaries, Austin is the ninth most expensive place to run a tech business, costing more than Dallas, Denver and Houston. In fact, its office rents ranked third in the nation, behind only New York and the Bay Area.
But when you consider the metro area's tech talent pipeline, its high concentration of young workers with college degrees and it strong salaries, Austin's tech workforce is still punching well above its weight, according to a new report by real estate firm CBRE. The report looked not only at tech jobs and tech companies, but other tech roles at non-tech companies.
Austin ranked fifth in the world, according to the report, which looked at the concentration of tech workers in major metros, as well as office and apartment rent prices and tech talent pipelines from local universities. That's one notch above where it landed in last year's report.
A few quick highlights:
- Austin ranked No. 5 for tech salaries, with an average annual wage of $119,983.
- It ranked No. 3 for educational attainment, topped only by Washington, D.C., and the Bay Area.
- It had the highest concentration of people in their 30s and the seventh highest concentration of people in their 20s.
- It ranked No. 21 in terms of apartment rents, with an average cost of $1,589.
CBRE's report also highlights the ever-increasing number of jobs tied to artificial intelligence.
While the overall tech employment rate grew by 3.6% in 2023, AI-related jobs increased at double that pace. Austin is still in its early phases in terms of AI employment. It trails several metros in terms of its share of AI talent.
"Seattle (71%) and the San Francisco Bay Area (65%) had the highest shares of AI-specialty talent working for tech companies, followed by Vancouver (55%)," the report said. "Los Angeles, New York Metro, Boston, Toronto and Austin each had 45% or more of AI-specialty talent in the tech industry."
As the focus on AI grows, so will the number of markets with AI talent.
"We are starting to see companies look outside those larger pools of AI talent and looking for what are the next markets where they can find and really be an employer choice and be an early mover to those markets," CBRE Executive Vice President Luke Ogelsby said on a Sept 4 call. "So we are starting to see some of those up and coming AI markets like Austin, like Raleigh, like markets across the Sunbelt, come into the conversation as it's becoming harder and harder to compete for talent in the Bay Area."
Meanwhile, diversity remains an issue. Tech businesses and non-tech businesses continue to fall short of reflecting the diversity across markets.
"Tech talent across all industries was little changed over the past five years and remains predominantly White, Asian and male relative to total employment and office-using employment," the report said.
And the disparity extends to wages.
"Tech talent across all industries segmented by annual wage bracket for race/ethnicity and sex showed a higher concentration of underrepresented groups and females in the lower wage ranges, generally because they have less tech work experience," the report stated.
For example, in 2022, more than 70% of Black and Hispanic tech workers were concentrated in wage brackets below $100,000. That compares to 43% for Asians and 63% for whites.
Similar figures show the disparity between men and women, with 70% female employees less than $100,000, compared with 57.3% for males.
"Greater diversity of the tech talent workforce should continue to slowly progress," CBRE wrote. "Our review of U.S. Equal Employment Opportunity Commission diversity data and publicly released data from private tech companies confirms this. Accelerating the pace of workforce diversity is both a challenge and an opportunity."
