You've likely heard all about markets such as Silicon Valley, New York City and Seattle when it comes to their technology sectors and clusters of highly skilled workers.
But a new report by CBRE puts two New Jersey markets — Edison and Newark — among the Top 50 U.S. markets for their ability to attract and grow tech talent.
The report places Edison at No. 16, making it the second-highest-ranked small market, defined as having a tech labor pool of less than 50,000. Newark is ranked No. 27 overall and sixth in small markets.
For those locations and the other 48, CBRE researchers say this translates to leasing activity from a sector that is becoming a growing force in the office market. While tech talent accounts for only 3.4 percent of the total U.S. workforce, the report said the high-tech industry drove more major U.S. office leasing activity than any sector in both 2013 and 2014, accounting for 13.6 percent and 19 percent, respectively.
“As demonstrated in the report, Edison and Newark have two of the largest tech talent labor pools in the country for markets of their size,” Jeremy Neuer, a senior vice president with CBRE New Jersey, said in a prepared statement. He added that the markets “both have greater tech talent densities than the national average — one of the most telling factors of a market’s strength.”
CBRE researchers compiled the ranking by analyzing 13 different metrics for tech talent, weighted by their relative importance to tech firms and the extent that they appear in each markets. Metrics related to tech talent concentration and size were given the most importance because they are most indicative of clustering, which is one of the signs of a strong tech talent market.
The report, called “Scoring Tech Talent,” defines tech talent as a group of highly skilled workers in more than 20 technology-oriented occupations across all industry sectors, breeding technological innovation, according to a news release. That includes jobs such as engineering, computer science and programming.
CBRE found Edison has 48,810 such employees — a tech talent concentration that is nearly 50 percent greater than the U.S. average — while Newark has nearly 33,000.
The Top Five markets in the report were Silicon Valley; Washington, D.C.; San Francisco; San Francisco Peninsula; and New York.
“Though highly concentrated within the high-tech services industry, tech talent is not limited to any one type of company and can be found across all industry sectors,” said Colin Yasukochi, director, research and analysis, for the Los Angeles-based brokerage. “In fact, more than 60 percent of tech talent jobs are located outside of the core high-tech industry, and these workers help generate innovation and advances that can boost the whole economy, including the commercial real estate market.”
The news release said CBRE researchers also looked at which markets present the greatest cost for occupiers based on wages paid to employees and rent paid for office space, combining the two costs for a “typical” 500-person tech firm needing 75,000 square feet of office space. Newark and Edison ranked second- and third-highest in cost for small markets, respectively, coming in behind Oakland with costs of $42.7 million and $41.4 million.
The CBRE report also noted that top tech talent markets share certain characteristics such as gender diversity, educational attainment rate above the national average and the presence of millennials in the workforce. According to a news release, the millennial population in Edison has increased 6.4 percent, more than twice the national average, since 2009.
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