By Sara Downey, thought leadership, Dell Technologies
In theory, the advent of the internet and cloud-based systems have long meant that tech innovation is unbound by location—it can happen anywhere with a WiFi signal. Yet, for the past several decades, well-heeled tech companies have been almost solely synonymous with major urban hubs like San Francisco and Seattle. Cities like Kansas City and St. Louis? Not so much.
But the rise of remote work appears to have catalyzed a shift in this distribution, driving more talent—and more investment dollars—to America’s heartland. A recent Dell Technologies-funded report from the Brookings Institution cited research by the investment firm Revolution showing that in 2021, the share of early-stage venture capital money being funneled into non-Silicon Valley startups was on track to exceed 70%—a full 10% boost since 2014.
At South by Southwest (SXSW) in Austin, Texas, a panel of experts discussed this study and the trends it outlines. Mark Muro, a senior fellow and policy director at the Brookings Institution, and Steven Pedigo, a professor of public affairs at the University of Texas at Austin, shared their thoughts. In attendance were also former FCC Commissioner Mignon Clyburn, as well as U.S. Representative Peter Meijer of Michigan, who shared insights from their respective sides of the political machine.
So, does technology have the potential to be a “great equalizer” after all? And are pandemic-sparked trends here to stay? Here are some of the key points that emerged in their illuminating conversation.
“Rising star” cities saw a bigger piece of the pie
Before the COVID-19 pandemic, the technology sector was growing steadily—between 2010 and 2019, 48 out of 50 states and Washington, D.C. saw positive employment growth in the industry. But the Brookings report found that the bulk of this growth was concentrated in a handful of “superstar” cities spanning Seattle, Los Angeles, San Francisco and San Jose, California—largely bypassing the middle of the country, with the exception of Austin, Texas—and surfacing again in New York, Boston and Washington, D.C.
Now, we’re seeing the emergence of new and smaller tech markets interspersed throughout the Rust Belt, Sun Belt and the country’s interior—some are calling this new evolution the “Silicon Heartland.” Over the pandemic, major tech companies relocated their HQs from California to Denver and Houston. Smaller towns like Gulfport-Biloxi, Mississippi, and Pensacola, Florida, also saw tech employment grow by 6% or more during the first year of the pandemic.
The decentralization of tech innovation, however, doesn’t mean that urban locales like New York and the Bay Area have become irrelevant—in 2020, the eight “superstar” metropolitan areas still housed 38.4% of all U.S. tech jobs. During the panel discussion, Muro pointed out: “We’re seeing a two-track reality: The hubs are doing very well, but other places are beginning to become part of the conversation.”
“Technology is this century’s greatest enabler—it will not on its own be this century’s greatest equalizer. All the other things—being intentional, being deliberate, being inclusive— that will put the equal sign up there.”
—Mignon Clyburn, former Commmissioner, Federal Communications Commission
The importance of home-grown investment
Of course, the rise of remote work is a major, if not the primary, factor in this redistribution. The ability to work at an Austin-based job from Grand Rapids, Michigan—or vice versa—could mean that more people from more diverse backgrounds have greater access to lucrative tech careers.
And, as Muro noted in the panel discussion, the demand for such roles is surging—at Dell Technologies alone, there are more than 10,000 job openings looking to be filled as of March 2022.
For companies looking to hire tech talent, several panelists chimed in on the important role of community colleges and minority-serving institutions (MSIs) and Historically Black Colleges and Universities (HBCUs). Efforts can start earlier than higher ed, too: Continued investment in workforce development programs, like Dell’s Student TechCrew, where high schoolers become the technical support team for their school and can later spin their skills into a community college program or a job, maybe helpful.
Such initiatives align with the concept of “home-grown” investments—community-focused efforts that seek to foster talent locally, versus incentive programs that solicit workers from big, shiny and expensive cities. For places hoping to replicate the influx of tech workers that, say, San Diego and Salt Lake City have seen, these types of initiatives may be an important piece of the puzzle.
Pedigo provided a thoughtful perspective: “If I’m in Grand Rapids or Little Rock, and I’m the chief economic development officer, I’m thinking, ‘How do I build an ecosystem that will allow us to grow our own?’ It’s about investing in technology, having the infrastructure in place, policies, workplace development, etc.”
Funding the future of tech infrastructure
A giant obstacle to be overcome in the pursuit of equitable progress is the digital divide– nearly 30 million Americans have little or no access to digital technologies. Clyburn, who hails from South Carolina and has dedicated much of her career toward closing this gap, is even more attuned to deep-seated inequities.
During the panel chat, Clyburn pointed out that a community-centric, needs-based approach that blends both private investment and public funding may hold at least one key to finally closing the chasms of the digital divide—establishing the internet infrastructure necessary to support high-bandwidth tech jobs, for instance, or addressing the “anemic” educational resources in many rural areas and underserved urban neighborhoods.
“We need to allow those opportunities to flow to places where there have been persistent deficits in this nation,” she said. “I call it recalibrating the equation.”
Representative Meijer offered the opinion that closing the digital divide is not something the federal government can “fully solve.” “The best solutions are going to be found at the local level, and every echelon above will see their abilities diminish without the participation of folks at that ground level,” he noted.
The “rise of the rest”: Temporary or long-term trend?
Dell Technologies has adopted a do-anything-from-anywhere mantra and recognizes that being successful in the remote- and hybrid-work paradigm means providing employees with the right tools and the flexibility to work on their terms. In fact, 76% of employees surveyed as part of our global Breakthrough study say they want their leaders to better empower them to choose their preferred working pattern. Many other tech companies have put similar policies into place, ensuring that employees no longer need to be tethered to a single location in order to do phenomenal work.
While the decentralization trends outlined in the Brookings report are promising on the surface, one looming question remains: Are they here to stay?
If there’s one thing all of the panelists on that stage agreed on, it’s that the path toward a more equitable and inclusive future of tech needs to be a collaborative effort. Of course, technology is still at the core of this exciting possibility—but is it truly an equalizer? Clyburn pointed out that technology won’t create substantive change in a vacuum. Companies, governments, NGOs, and more will need to capitalize on the momentum of pandemic-prompted trends for them to stick around in the long term.
“Technology is this century’s greatest enabler—it will not on its own be this century’s greatest equalizer,” said Clyburn. “All the other things—being intentional, being deliberate, being inclusive—that will put the equal sign up there.”