THE ST. LOUIS METRO AREA comes out looking pretty good in a new report from the Brookings Institution, which calls attention to St. Louis and other “rising stars” that have done a solid job in recent years of adding jobs in fast-growing technology sectors.
Employment data from 2020, the first year of the COVID-19 pandemic, suggest St. Louis, Kansas City and a handful of other rising-star metros are poised for further progress, according to Brookings researchers Mark Muro and Yang You.
THE BACKSTORY: Eight “superstar” metros mostly on the coasts (think places like Los Angeles, New York, San Francisco and Seattle) have dominated job growth over the past decade in key tech sectors like software publishing, computer systems design and other information services.
Tech employment hasn’t really spread out across most areas of the U.S.; in fact, it’s become even more concentrated, the report notes.
“Instead of a ‘rise of the rest,’ a term coined by AOL co-founder and investor Steve Case to refer to the growth of startup ecosystems away from the coastal tech hubs, the geography of the tech sector solidified into an uneven ‘winner-take-most’ dynamic,” the researchers wrote.
At the same time, the Brookings team identified nine “rising stars,” mostly midsized metros away from the coasts, where tech employment also grew briskly between 2015 and 2019. Besides St. Louis and Kansas City, the list comprises Atlanta, Dallas, Denver, Miami, Orlando, Salt Lake City and San Diego.
“We’ve been somewhat skeptical of the ‘rise of the rest’ as a real dynamic to date, but I think we can see signs of it now in a limited way,” Muro said in an interview with McPherson.
By 2019, about 28,000 people in the St. Louis area worked in the tech sector, while Kansas City had 40,000, according to Brookings’ analysis of data from Emsi Burning Glass, a company that tracks the labor market. (The figures don’t specify how many jobs are included from specialized areas like agriculture technology and geospatial, where St. Louis has concentrations of strength.)
ALONG CAME A PANDEMIC: The arrival of COVID in early 2020 caused disruptions for workers everywhere and led to a massive national experiment in remote working.
The pandemic hasn’t caused a massive reorientation of tech work into the American heartland, but it does point to the possibility of some intriguing new patterns, according to Brookings.
New York added plenty of tech jobs in 2020, but employment growth slowed in other big tech centers, with places like San Jose and Los Angeles posting particularly steep drops. Boston actually lost tech jobs, the data from EmsiBG show.
Job growth also slowed in the rising stars, with one cheeky exception: St. Louis. The metro had faster growth in 2020 (4.8%) than the average annual rate it posted in the five years prior to the pandemic (3.9%).
Only one metro out of nine rising stars posted faster tech job growth in 2020 than in the five previous years. That metro was St. Louis.
“St. Louis is in a group of cities that are actually making real progress on tech, and the growth in 2019-20 is an interesting feature,” Muro says. “Maybe it does say St. Louis is finding ways to attract people.”
SO IS ST. LOUIS THE NEXT SILICON VALLEY? That would be stretching things, to put it mildly.
For starters, Brookings notes that it only has high-quality jobs data for the first year of the pandemic. One year (2020) hardly constitutes a trend.
To supplement the employment figures, Brookings also looked at national data involving tech job postings (also from EmsiBG) and new tech firm starts (from Crunchbase) in 2020 and 2021. The researchers found further signs that tech activity is possibly becoming less concentrated in the superstar metros.
These more recent data paint a mixed picture for metro St. Louis.
Examining the data for St. Louis specifically, Muro found that tech job postings ended 2021 substantially below where they started in 2020. Yet in terms of new tech firms, St. Louis increased its share of the national total from 0.3% in 2020 to 0.5% 2021.
“These are small numbers (the posting data) so I wouldn’t place too much stock in it, but it does cut against the 2020 surge and maybe raises doubts about how meaningful the one-year surge is,” Muro wrote in an e-mail. “With that said, the new-firms info supports the idea of an uptick.”
WHY ALL OF THIS MATTERS: It’s too early to tell whether the pandemic’s impact on the geography of tech is a temporary disruption or if it represents a more durable shift. The Brookings researchers plan to keep on crunching the numbers for 2022 and beyond, Muro says.
But for St. Louis, showing up on a list of rising stars in tech – a list that’s backed by several years of hard data on jobs – is noteworthy, especially as groups like business/civic organization Greater St. Louis, Inc. work to solidify the metro’s status as a hub for fast-growing businesses.
St. Louis is one of 60 finalists in the Build Back Better Regional Challenge, a federal competition that will award 20 to 30 regions up to $100 million each for projects in tech and related fields. The final St. Louis proposal, which envisages an advanced manufacturing center in North St. Louis as part of a “Regional Tech Triangle,” is due on March 15.
Trends in federal spending as well as in private-sector areas like venture capital, along with more jobs data, will reveal whether places like St. Louis can sustain their status as rising stars, Muro says.
“We hope that people will take from this [report] an understanding of the complicated structure of tech in the country, and a sense of the way events can shape how tech grows and where it grows,” he explains. “We’re emerging from a major disruption…I hope the places take away the sense their futures aren’t deterministic. There are ways to influence the trends.” –McP–
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