“A gun is like a parachute. If you need one, and don’t have one, you’ll probably never need one again.”
Jun 30, 2016 Hayley Ringle Reporter Phoenix Business Journal
The Valley saw 58 percent growth from 2010 to 2015, behind only the San Francisco Bay area and Baltimore.
Overall, Phoenix jumped nine spots to No. 11 on the report’s annual 50-city tech talent scorecard, which examines the top 50 tech labor markets in North America.
Kevin Calihan, senior vice president in CBRE’s Phoenix office, said the growth is “huge” and shows all the “work that’s been done to diversify” the local economy is paying off.
“The Valley definitely still has work to do,” Calihan said in an email. “We’re producing a really significant number of graduates with tech-related degrees, and if we want to keep them here we need to continue to attract the right employers and grow that job base.”
According to the report, Phoenix is one of the most cost-effective markets for tech companies to operate in and for their employees to live. We’ve seen that with the many tech companies that have opened offices here, from San Diego wireless network startup Ingenu and San Francisco website creators Weebly, to the Swiss security tech Kudelski Group and the Canadian real estate tech startup feeDuck.
Phoenix ranks No. 26 in CBRE’s analysis of estimated one-year costs in terms of wage and rent obligation for a sample tech firm with 500 employees and 75,000 square feet of office space.
The report shows the metro area is a cheaper alternative to Seattle, Denver and Austin.
“The entrance of leading companies into the market, including Gainsight,Galvanize and DoubleDutch, is indicative of the robust talent pool that exists here and the unparalleled livability our communities offer,” Camacho said in an email. “This availability of talent, when combined with a competitive operating environment, is what will continue to draw tech companies to the region.”
Phoenix has a wage-to-apartment rent ratio of just under 13 percent, making it the fifth most affordable tech talent market for employees, according to the report.
“I believe markets like Denver and Austin are going to continue to see steady increases both in terms of operational cost and cost of living for employees,” Calihan said. “These higher barriers to entry are going to give us an edge when we’re working to lure growing companies from markets like Silicon Valley. It also gives us an advantage in attracting entrepreneurs who might traditionally look to start a company in markets we’ve historically competed with.”
The Phoenix metro area is also one of the top 10 regions for students who finish their tech degrees. The local market saw 8,954 tech-related graduates in 2014, and from 2010 to 2014 saw a 51.7 percent increase in tech-related degrees completed.
However we do have a problem of graduates leaving once they earn their degrees.
According to the report, despite producing more than 44,000 tech-degree graduates between 2010 and 2014, Phoenix only added 31,620 tech jobs between 2011 and 2015, making it one of the top two “brain drain” markets along with Boston.
Groups like the Security Canyon, which is changing its name to the Cyber Security Canyon, have formed to attract and retain highly educated talent and organizations to greater Phoenix and Arizona.
In next week’s weekly edition I will take a look at the Valley’s burgeoning cybersecurity scene.
Hayley Ringle covers technology and startups for the Phoenix Business Journal.
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