Share this article

print logo


Robinson: Buffalo Niagara left behind by country's tech boom

When it comes to technology jobs, the Buffalo Niagara region still is one of the industry’s backwaters.

That’s a problem, because employment in the technology sector across the country is booming, growing roughly three times faster than the overall pace of U.S. job growth.

Even worse, at a time of such rapid growth nationwide, the Buffalo Niagara region’s technology sector is shrinking, one of just a handful of metro areas across the country to actually lose jobs in such a fast-expanding industry. With fewer jobs, technology accounts for a shrinking share of the region’s overall employment.

In short, the tech boom is passing the Buffalo Niagara region by. That hurts, especially in a region that needs 21st Century jobs more than most places.

“Buffalo has a stark story of both losing share and losing jobs,” said Mark Muro, the director of policy at the Metropolitan Policy Program at the Brookings Institution and one of the authors of a new report that looked at technology employment in the nation’s biggest metro areas.

That matters because digital services jobs – in fields like software publishing, data processing, computer systems design and web publishing – account for more than half of the country’s new jobs in advanced industries between 2013 and 2015, according to Brookings researchers.

Nationwide, those fast-growing technology industries have been adding jobs at about 5.5 percent to 6 percent a year, more than three times faster than the U.S. economy’s overall hiring rate of less than 2 percent.

But it’s even worse in the Buffalo Niagara region. Here, those key technology sectors actually are shrinking, shedding an estimated 200 jobs during that same three-year period.

Yet the Buffalo Niagara region isn’t alone. Muro and his co-author, Sifan Liu, found that there is a steep divide within the tech sector between the haves and the have nots.

The technology hotbeds – places like San Francisco and San Jose – are growing faster and capturing a larger portion of the industry’s rising employment. The technology have-nots, including places like the Buffalo Niagara region, are struggling just to keep what little they have.

“While tech employment is growing all over America, it really isn’t spreading out,” Muro and Liu wrote. “Instead, the tech-employment rich – namely San Francisco and San Jose – are getting richer. Agglomeration economies are everything.”

That’s bad news for the nation’s heartland, including the Buffalo Niagara region, where the tech sector is small – and largely stagnant.

The San Francisco area tops the list of fastest-growing tech markets, according to the Brookings Institution. (Getty Images)

Four fastest-growing tech markets, according to the Brookings Institution 

  1. San Francisco-Oakland-Hayward, Calif.
    Tech jobs added, 2013-15:31,500
    Annual growth rate for tech jobs: 12.9%
  2. San Jose-Sunnyvale-Santa Clara, Calif.
    Tech jobs added, 2013-15: 27,500
    Annual growth rate for tech jobs: 12.1%
  3. New York City-Newark-Jersey City, N.J.
    Tech jobs added, 2013-15: 24,200
    Annual growth rate for tech jobs:6.1%
  4. Dallas-Fort Worth-Arlington, Texas
    Tech jobs added, 2013-15: 15,400
    Annual growth rate for tech jobs: 9%

The Brookings researchers hold out little hope that the boom in technology will prove to be a stimulus that provides good-paying jobs for cities across the country.

In all, a little more than 9 of every 20 digital services jobs are clustered in just 10 of the nation’s biggest metro areas.

“Tech is, in fact, polarizing,” the researchers said. “The sector is, in fact, continuing to concentrate into a short list of the nation’s densest tech hubs.”

Employment in San Francisco’s tech sector is growing by almost 13 percent. In San Jose, the growth rate is 12 percent. Between those two cities alone, less than an hour’s drive apart, the tech sector created 59,000 new jobs from 2013 to 2015. For comparisons sake, during that same period, the entire Buffalo Niagara economy created a little more than 11,000 jobs.

Away from the Silicon Valley, cities like Dallas, Phoenix and Indianapolis have becoming technology hotbeds. So are university towns, like Madison, Wisc., Provo, Utah, and Raleigh, N.C.

But those are the exceptions. The Brookings analysis found that 86 of the nation’s 100 biggest metro areas have seen their share of the digital services job market shrink or stagnate since 2010.

The Buffalo Niagara region is among shrinking tech markets identified by the Brookings Institution. Other regions that lost tech jobs include Virginia Beach-Norfolk-Newport News, Va.; Columbus, Ohio; and Palm Bay-Melbourne-Titusville, Fla. (Getty Images)

Four shrinking tech markets, according to the Brookings Institution

  1. Virginia Beach-Norfolk-Newport News, Va.
    Tech jobs lost, 2013-15:-400
    Annual decline in tech jobs:-1.6%
  2. Palm Bay-Melbourne-Titusville, Fla.
    Tech jobs lost, 2013-15:-400
    Annual decline in tech jobs:-4.9%
  3. Columbus, Ohio
    Tech jobs lost, 2013-15:-400
    Annual decline in tech jobs:-0.8%
  4. Buffalo-Niagara Falls
    Tech jobs lost, 2013-15: -200
    Annual decline in tech jobs:-1.8%

Muro, however, noted that counting technology jobs can be tricky. Technology now is so intertwined in daily business that most sizable companies, from banks and manufacturers to retailers, have tech specialists on their payroll, but they may not show up in the statistics the Brookings researchers studied. Instead, those tech workers may be classified as retail employees, manufacturing workers or bankers.

Muro also noted that the data on the Buffalo Niagara region, with its substantial medical and health care sector, may be undercounting some of its technology employment. When the SolarCity factory opens, with its strong reliance on sophisticated production equipment, many of those jobs also will have a strong technology component, he noted.

Still, there’s plenty of other research that backs up the Brookings conclusion about the sluggish tech sector in the Buffalo Niagara region.

• Data from the U.S. Bureau of Labor Statistics indicates that, as of the third quarter of last year, the region’s information sector was 3 percent smaller than it was at the beginning of 2015. The sector’s average weekly wage dropped by more than 4 percent.

• Our information sector also is small. We have 36 percent fewer information jobs than the national average, and the sector’s average weekly wage of $1,154 is 31 percent lower than the U.S. standard.

• Our colleges don’t churn out technology graduates in large numbers. We produced 699 graduates with degrees in computer and information services and support services from 2013 to 2014. In contrast, our colleges produced six times more business, management and marketing graduates, or more than 4,300, according to a recent labor market study the University at Buffalo Regional Institute and Invest Buffalo Niagara.

• The region is expected to have about 290 job openings annually for computer and math occupations, about 55 fewer jobs than the number of graduates produced by local colleges in those majors, the labor market study found. Wages in the computer and math sector haven’t even kept pace with inflation since 2009.

• The region’s efforts to encourage entrepreneurship, including the 43North business plan contest, also could help, but Muro said it’s essential to have an ample pool of graduates with strong STEM skills, encompassing science, technology, engineering and mathematics.”Entrepreneurship within a digital context is likely to be the quickest way to create growth,” Muro said. “But without some kind of pool of digital talent, a region’s upside is going to be constrained.”

There are no comments - be the first to comment