Tuesday, October 1, 2013

San Francisco tech job growth leads nation

Sep 30, 2013, 11:03am PDT  San Francisco Business Times

San Francisco Mayor Ed Lee.

Patrick Hoge Reporter- San Francisco Business Times

The city of San Francisco led the nation in tech job growth for the last five years, according to a new report released today by the Bloomberg Technology Summit, which San Francisco Mayor Ed Lee is co-sponsoring this year with New York Mayor Michael Bloomberg.

San Francisco’s tech employment rose 51.8 percent over the 2007 to 2012 period, according to the study by South Mountain Economics, which focused particularly on New York, which has also seen significant employment growth in the tech/information sector, including traditional tech companies as well as media and information companies.

“San Francisco comes out number one in terms of growth of the tech/information sector,” said study author Michael Mandel. Brooklyn (Kings County) and Wake County, Fla., came out number two and three, with 21 percent growth and 18.2 percent, respectively, while Santa Clara posted gains of 15.5 percent.

Mayor Lee recently said there are 1,892 tech companies in San Francisco, up 3.6 percent from the prior year, representing 45,493 jobs.

Mandel speculated that one reason why San Francisco and New York City saw such strong gains is because both are centers of media and information companies.

“The way that i think about technology, the current growth wave, is that it’s not pure tech anymore. It’s really pure tech converging with information,” Mandel said. “That may explain why San Francisco has done so well in this round.”

Growth in the tech/information sector enabled New York to increase private sector employment by 4 percent between 2007 and 2012, even as national private sector payrolls fell by 3 percent, Mandel found. In fact, he said because of the growth of the tech/information sector, New York City’s share of the nation’s private sector employment now stands at its highest level since 1992.

California's unemployment rate increased slightly during August to 8.9 percent, up from 8.7 percent in July. Unemployment nationwide, by comparison, was 7.3 percent.

Unemployment in San Francisco, by contrast, fell to 5.6 percent in August from 6 percent in July. Statewide, San Francisco, Marin, and San Mateo continue to hold the lowest unemployment rates.

New York City’s tech/information sector grew by 11 percent from 2007 to 2012, adding 26,000 jobs and $5.8 billion in wages to the local economy, which in turn fueled private sector job growth that was four times that of the New York suburbs over the period, the study showed. The Big Apple’s tech/information sector supports 262,000 jobs and contributes nearly $30 billion to payrolls, making it the second largest driver of the New York economy.

Also Monday, the Bloomberg Technology Summit released a companion study by the Boston Consulting Group, which interviewed more than 50 tech executives from New York and San Francisco that showed both cities have fostered tech sector growth by developing five key conditions: growing a strong talent pipeline, supporting a vibrant tech community, leveraging local early stage capital, expanding tech infrastructure and office space, and engaging with existing industries.

In San Francisco, for example, Mayor Lee holds weekly events at local tech companies, and he led the successful effort to eliminate payroll taxes for companies in the central city.

The second annual Bloomberg Technology Summit, which aims to help other cities learn from New York and San Francisco’s successes, is being co-sponsored by Bloomberg Philanthropies and the San Francisco Citizens Initiative for Technology & Innovation (sf.citi), a trade group of San Francisco tech companies.

The first session of the summit is taking place in New York on Monday, while the second will be held in San Francisco next March. A newly announced third session will be held in London next year as well.
Patrick Hoge covers technology for the San Francisco Business Times.

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