Los Angeles is strengthening its standing as a center for the tech sector.
L.A. and Orange Counties rated ninth in CBRE Group Inc.’s 2021 “Scoring Tech Talent” study, moving eight positions from last year’s report. The survey assesses 50 North American locations on their tech talent based on a range of metrics, including graduation rates among students with tech degrees, the number of tech jobs in the area, labor pool size and housing expenses.
Blake Mirkin, executive vice president of CBRE’s West L.A. office, attributed the region’s climb in ranks to the integration of the tech business with the media and entertainment industry, which have expanded owing to pandemic-driven demand for content.
“Technology is entertainment, entertainment is technology, and media is connected with all of them,” added Mirkin. “Los Angeles has always been incredibly robust in each of them, and it’s continuing to become stronger.”
Mirkin said that many L.A. and Orange County tech professionals aren’t employed by tech-specific firms, echoing a countrywide trend. In North America, nearly 60 percent of tech workers are employed by non-tech firms, he noted.
Some of the L.A. region’s main employers of IT experts are Burbank-based Walt Disney Co., Seattle-based Amazon.com Inc., Los Gatos-based Netflix Inc., Santa Monica-based Lions Gate Entertainment Corp. and Cupertino-based Apple Inc., Mirkin said.
These large corporations and others in the internet and media industries have a vast well of competent personnel to select from as they continue to develop.
According to the CBRE research, L.A. and Orange Counties have the fifth-largest tech talent labor pool in the United States, with 228,720 competent tech employees in the region. That is an 18.6 percent rise over 2015.
The area also generated 61,261 tech graduates from 2015 to 2020. Mirkin said the top tech programs at the area’s colleges, such as USC, UCLA and Loyola Marymount University, are a huge pull for young people coming into the tech business.
Though the labor pool grew, the market also saw what the study dubbed “brain drain,” with 25,391 recent tech graduates finding work in other regions, as just 35,870 new positions arose from 2016-2020.
However, Colin Yasukochi, executive director of the CBRE Tech Insights Center, believes that the large number of graduates makes Los Angeles a desirable location for businesses to establish themselves. The flow of talent into the market and whether or not there will be a ready labor supply for them to be able to establish a foothold in the market are two factors that Yasukochi believes employers are looking at.
Despite the fact that the Los Angeles and Orange County region has not yet cracked the top five on the business report’s overall ranking, which includes the San Francisco Bay Area, Seattle, New York City, Washington, D.C., and Toronto, Yasukochi said the region has “consistently risen through the ranks” as a technology hub. This is important for small business growth.
“The most important factor that influences (the score) is the size of the tech talent workforce in the area, as well as how rapidly that workforce is increasing,” Yasukochi explained. As a result, the number of tech degree graduates is increasing, and the region’s technology industry is developing and flourishing. All of these elements have improved in the Los Angeles region throughout the years and it’s economy.
According to Mirkin, Los Angeles has emerged as a desirable location for the technology industry, although part of the rise in tech talent can be ascribed to employees being priced out of other markets.
Los Angeles and Orange Counties are expected to see a 31 percent increase in in-migration from the San Francisco Bay Area in 2020, according to Mirkin, and while this growth is not entirely related to technology, he believes it establishes the area as a “complementary hub” to Northern California’s economy. We expect to see more small businesses succeed in 2021 and 2022 due to the new technology push.
And, as the convergence of technology and content continues to flourish, Mirkin anticipates the region’s tech industry and talent pool will continue to expand.
According to Mirkin, “we’re still seeing a flight to content on the entertainment side, which is highly weighted with technology.” “Even throughout the epidemic, it truly did lead everyone on a remarkable upward trajectory.” We only expect this to get better.
