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L.A. Produced More than Double the Amount of Tech Degrees than Tech Jobs Created in the Region

7/16/20

This report was provided by real estate services firm CBRE

The Greater Los Angeles area produced more than double the amount of tech degrees than tech jobs created in the region in the past five years, ranking it fourth in terms of so-called “brain drain,” according to CBRE’s annual Scoring Tech Talent Report, which ranks 50 North American markets according to their ability to attract and grow tech talent.

Los Angeles produced 44,386 tech degrees during the most recent five-year period, only adding 20,090 tech jobs since 2015. Los Angeles’s production of ample supply of tech talent and the region’s cost-effective operating costs compared with other West Coast tech hubs like Seattle and the San Francisco Bay Area make the area prime for expansion.

“In spite of the current headwinds that affect all regions, Los Angeles will continue to be a hub for growth among tech tenants,” said CBRE Vice Chairman Jeff Pion. “We produce an incredible amount of talent at our multitude of universities. That, plus our weather, geography and quality of life have historically attracted companies of all shapes and sizes, and we have been a great market for ‘creatives,’ especially in the media-tech space. This is particularly relevant right now due to an almost incessant demand for streaming content.”

He added, “With COVID, office leasing activity has been very slow the past three months, but the long-term fundamentals of this market are going to remain and will support Los Angeles’ resiliency.”

The report outlines how tech-talent jobs are positioned to weather COVID-19 and related shutdowns and the ensuing recession because, more than ever, companies across all industries need the technical skills that this talent base offers. Many tech products and services such as streaming, remote communications and social media now are in higher demand to support remote work and social distancing. Tech employment has shown it can withstand economic shocks: In the 2008-2010 recession, tech-talent employment declined by 0.5 percent while overall U.S. employment registered a 5.5 percent drop.

The top five markets for tech talent in 2020 were the San Francisco Bay Area, Washington DC, Seattle, Toronto, and New York, all large markets with a tech labor pool of more than 50,000. CBRE’s Tech Talent Scorecard is determined based on 13 unique metrics, including tech talent supply, growth, concentration, cost, completed tech degrees, industry outlook for job growth, and market outlook for both office and apartment rent cost growth.

“We expect that most tech-talent markets and professions will thrive after the pandemic subsides, and many that facilitate remote work and tech services such as e-commerce, social media and streaming services may have even greater growth opportunities accelerated by the COVID-19 disruption,” said Colin Yasukochi, Executive Director of CBRE’s Tech Insights Center. “Markets that have strong innovation infrastructure – leading universities and high concentrations of tech jobs – will lead the next growth cycle.”
Los Angeles stood out in the report in a number of other key areas:

Los Angeles ranks third with 9,621 tech degree completions in 2018, which reflects a 37.7% growth since 2013.
Los Angeles ranks 10th across all markets with an average tech talent wage of $103,677.
Overall, Los Angeles ranks 10th for expenses of operating a tech company. The average one-year cost for running a 500-employee tech company occupying 75,000 sq. ft. in Los Angeles amounts to $46 mil, below the costs of West Coast tech hubs such as the San Francisco Bay Area and Seattle.
The millennial population in the region aged 22 to 36 increased by 2.5% (61,505 people) since 2013.
The Inland Empire is ranked 19th on the “Next 25 Markets” list and has seen tech job growth of 29 percent over the last five years.

Top 10 tech talent markets: RANK (2019) MARKET SCORE

1 SF Bay Area, CA 82.56
2 Washington, D.C. 67.39
3 Seattle, WA 66.36
4 Toronto, ON 64.34
5 New York, NY 64.01
6 Austin, TX 60.30
7 Denver, CO 59.89
8 Boston, MA 59.61
9 Atlanta, GA 58.78
10 Raleigh-Durham, NC 56.29




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