Last Friday, TechPoint released the Technology Workforce Report: Employment Trends and the Demand for Computer-Related Talent in Central Indiana, the results of a study funded by the Lilly Endowment and Katz, Sapper & Miller. The report proved what many area businesses have long suspected: the tech job market has grown much faster than others in Central Indiana. What’s more, this strong growth has occurred over the same period that saw a decline of 0.3 percent in all jobs nationally.
This trend is meaningful for the region’s long-term economic picture because, while the statistics are impressive on their face, there are also tremendous ‘extras’ that accompany tech jobs in particular – extras that could be significant drivers transforming Central Indiana to become an economic powerhouse as a dominant tech hub similar to Silicon Valley.
To understand what’s so special about tech jobs and their effect on the regional economic landscape, take a look at Enrico Moretti’s research on the geography of jobs. His ideas about what happens to these “brain hubs” with high concentrations of tech jobs lend useful insight to the trends revealed by TechPoint’s report. Moretti illustrates in his 2012 book that jobs aren’t all alike when it comes to their economic value. Through multiple mechanisms, tech jobs provide more benefits than jobs in other sectors.
When a high-tech company hires one person, five other new jobs follow. Because these jobs are typically high-paying, the employees bringing home these fat paychecks create additional demand for products and services of many kinds, from realtors and remodelers to doctors, lawyers, landscapers and golf pros. Near an Apple, Google or Facebook, the local economy is likely to be humming along nicely and job-rich at every level. In his book, Moretti states that Apple’s (then) 12,000 employees in Cupertino had given rise to least 60,000 jobs in the metro area.
Smart, innovative workers prefer to be around other smart, innovative workers. Tech workers thrive on collaboration and being around others like them. That’s one reason for the success of tech-focused incubators and co-working spaces like Speak Easy, Launch Fishers and DeveloperTown. The consequence is that concentrated pockets of tech jobs tend to grow larger by selective migration, as more tech-skilled professionals choose to relocate into the area and see it as a suitable place to live and work.
Tech jobs cross all sectors and industries. For decades, competition over which clusters deserve more funding and new incentives has brought an element of conflict to development efforts. The solution is to devise programs that encourage growth of the tech job sector regardless of industry. For example, a software applications developer and her employer should be eligible for the same incentives whether she works for Interactive Intelligence, Eli Lilly, Ford or Kroger. Her value to the area economy is unrelated to her employer’s sector. Growing computer-related jobs and attracting workers for these high-tech positions enhances the business opportunity for all, because these skills are in high demand by both tech companies and tech-enabled companies.
Tech employers have proven that they can succeed and stay. Look at the big acquisitions and IPOs that have entered the area since 2007. They are all committed to remaining here and growing. Similarly, the long-held suspicion that tech employers don’t create as many jobs as those in other industries simply doesn’t hold up when 12 tech employers alone in Central Indiana represent 3,700 jobs and $4.5 billion in market value. Tech jobs aren’t sucking up assets and running away, either. Many of our region’s most successful tech employers have sprung from previous liquidity events.
Increased focus on tech jobs benefits the entire business community. This isn’t just because most companies struggle to find enough skilled high-tech workers, although that is a factor. Investment follows the creative class, and high-tech workers in particular. High-tech hubs receive a staggeringly disproportionate share of the nation’s venture capital, and being perceived as a center of tech innovation virtually guarantees greater availability of these funds to local enterprises.
It makes smart economic sense to target these workers for development efforts. By focusing on computer-related jobs and the workers with those skills, we can foster across-the-board success. The new jobs and injections of funds they bring create a positive impact for all area residents, enhancing the status of the area as an ideal place to start or invest in a business in the process.