Texas Tech Hubs Challenge Silicon Valley’s Lead

Austin (George Bridges / Associated Press)
George Bridges / Associated Press
Newport Beach, CA

A new Progressive Policy Institute report reveals that Silicon Valley’s domination of telecom, tech, and content industries is increasingly at risk from other tech/info clusters in America–especially Texas tech hubs.

PPI just released its 2015 Tech/Info Job Index of the top 25 counties based on job growth of wired and wireless telecom, Internet search and publishing, and movie production.

The index rankings are important, because the Bureau of Labor Statistics data reveals that growth of tech/info jobs in America averaged 13.1 percent, versus a 6.8 percent rise in the rest of private sector employment in the U.S. But more importantly to workers across the nation, average pay for tech/info jobs in 2014 was $84,800 (including bonuses), versus a $46,300 average for the rest of the private sector.

The top three counties on the “PPI 25” were still clustered around Silicon Valley–including San Francisco Country, followed by Santa Clara County and San Mateo County. But Texas came on strong, with Austin taking the number 4 spot and Plano at number 6. A county adjacent to Austin clocked in at number 15, and Dallas at number 19.

Although San Francisco had the fastest growth of tech/info Jobs at 54.7 percent, Austin’s Travis County was number two at 41.4 percent and Williamson County at 36.5 was third.

Texas blew away the theory that a “halo effect” from the strongest tech/info growth will drive the fastest non-tech/info private sector jobs. Although the three Bay Area counties did have low double digit growth in non-tech/info, the top three Texas counties averaged about 50 percent faster growth in non-tech/info than Silicon Valley.

The PPI 25 do have a national halo effect for average non-tech/info jobs, with 9.5 percent growth between 2011 and 2014, compared to just 7.0 percent average for the rest of the non-ranking counties. Wages were also better, with the PPI 25 counties experiencing an average private sector wage gain of 9.0 percent, versus a national average of only 7.3 percent.

Michael Porter, the well-known Harvard Business School professor, defined tech/info type of business clusters as “geographic concentrations of interconnected companies and institutions in a particular field.” In his view, “a vibrant cluster can help any company in any industry compete in the most sophisticated ways, using the most advanced, relevant skills and technologies.

Porter added that the most common denominators for innovative clusters like the PPI 25 are: 1) at least one well-endowed high quality research university, 2) network of influencers or executive champions and support groups, 3) supportive state and local government, 4) federal government agencies and laboratories, 6) start-up companies, and 7) large corporations.

It may not be that Silicon Valley innovation is slowing down. However, it seems that many other communities around the United States are using the cluster playbook to speed up.