Last Updated: 01 Dec 2023
Second Tier Tech Centers - 2020 Edition
If you're trying to hire technical folks, and you have a virtual company or don't care where they work, you might want to look at recruiting from somewhere other than the big tech centers such as San Francisco & New York. There are a lot of absolutely fantastic technical people who live in what I call 'second tier technical cities'… places like Boise, ID or Raleigh-Durham, NC.
Here's a list of my favorite second tier tech centers in the US; comments are welcome with either US or international additions.
West Coast / Mountain States
- Salt Lake City + Ogden UT - Now known as the Silicon Slopes, the Salt Lake City area is still very affordable, but has a strong tech culture, with companies like Qualtrics and Domo. It's also the home of BYU, and many smart, hardworking folks. Tax Warning: SaaS is taxable in Utah, and having employees there may create a tax nexus.
- Boise, ID - Micron Technology calls Boise home, as do a growing number of startups. And cost of living is one of the lowest major cities in the nation.
- Colorado Springs, CO - A progressive city just south of Denver, and home to several major tech companies as well as aerospace defense players.
- Portland, OR - Portland has a lot of technology and a lot of really smart people, as well as a growing number of tech companies.
- Phoenix, AZ - In the last decade, Phoenix has become the backoffice for the world. Major tech and finance companies run much of their backoffice operations – from customer service to accounting – out of Phoenix and its suburbs. Amex, Uber, Carvana and many more have large operations here. Tax Warning: SaaS is taxable in Arizona, and having employees there may create a tax nexus.
- Bakersfield, CA - One of California's lowest cost cities, yet home to a growing number of startups. And it's only a 45 min flight from San Francisco.
- Riverside, CA - Another low cost California city, in California's 'inland empire'. Home to UC Riverside, it turns out a steady stream of talented people.
- Sacramento, CA & Davis, CA - The neighboring cities of Sacramento and Davis are just north of the Bay Area. UC Davis has an excellent engineering program, and Sacramento is home to a lot of tech companies looking for proximity to San Francisco but a cheaper locale.
- Minneapolis/St. Paul, WI - Major corporations like Target, Cargill and Ecolab call MSP home, and tend to attract a lot of talent. They also want to encourage the startup ecosystem, and you'll find a growing number of very talented people here.
- Indianapolis, IN - Best known for the Indy 500, the city of Indianapolis is a tech hub. ExactTarget, an email marketing firm, was sold to Salesforce in 2013, and that has spawned a number of startups and an associated ecosystem.
- Madison, WI - Home to the University of Wisconsin at Madison, an engineering player. Major tech companies such as Google and Zendesk have opened offices in the last few years, driving up wages, but it is still affordable.
- Ann Arbor, MI - Home to the University of Michagan, Ann Arbor, another engineering player.
- Urbana-Champagin, IL - University of Illinois, Urbana-Champaign is another great midwest tech school, currently ranked #5 on the US News & World Report of top computer science schools.
- Raleigh Durham, NC - home of Research Triangle Park, which itself is home of IBM, Cisco, and a number of other notables. RTP could almost be considered a first-tier tech center in its own right, but it doesn't have the costs of New York, San Francisco or Seattle.
- Providence, RI - Brown University is located here, a top computer science school. Tax Warning: SaaS is taxable in Rhode Island, and having employees there may create a tax nexus.
- Pittsburgh, PA - #1 Computer Science school Carnegie Melon is in Pittsburg. Tax Warning: SaaS is taxable in Pennsylvania, and having employees there may create a tax nexus.
- Charlotte, NC - Like sister city Raleigh, there's a lot of tech here – particularly fintech, as a number of major banks are headquartered in Charlotte.
- Columbus, OH - Columbus has a low cost of living, but a lot of talented technology and engineering people. Local jobs are still sometimes hard to come by, making this fertile ground for a virtual company.
- Springfield, MA - With UMass Amherst churning out tech talent, Springfield has a lot of talented people but a much lower cost of living compared to Boston, two hours away. Tax Warning: SaaS is taxable in Massachusetts, and having employees there may create a tax nexus.
- Baltimore, MD - Far enough away from Washington that not everybody goes there for a job, but close enough to get some of the benefits of being near the nation's capitol.
- Chattanooga, TN - Chattanooga put gigabit fiber in for all its residents in 2010, and hasn't looked back. It's attracted a lot of tech people, who've gone on to found several new startups. Tax Warning: SaaS is taxable in Tennessee, and having employees there may create a tax nexus.
- Sarasota/North Port, FL - A pair of small towns south of Tampa, Sarasota and North Port are brimming with 'get it done' entrepreneurial talent.
- Palm Bay, FL - Big aerospace players like NASA, Northrop Grumman, and Lockheed Martin call Palm Bay home, but the startup scene is starting to take off.
- Astana, Kazakhstan - An upcoming tech hub, Astana has established the 'Astana Hub' innovation center. With one of the lowest costs of living anywhere in the world (even cheaper than the Philippines or Eastern Europe), there's a lot of potential here.
- Belgrade, Serbia - Belgrade, and Serbia in general, has top tech talent with good english language skills. An increasing number of multi-national companies are opening offices here, but there's still a lot of potential for hiring top-notch people.
- Manila, Philippines - Manilla, and smaller Philippine cities like Cebu City, have long been known for backoffice operations. It's a great place to hire customer support and operations folks.
- Vilnius, Lithuania - Vilnius, Lithuania’s capital, has a thriving startup scene, really smart engineering talent, and a low cost of living.
- Tallinn, Estonia - Like Lithuania, Estonia has great tech talent, and an up-and-coming economy.
- Kiev, Ukraine - While Ukraine has had a rough go recently, with the eastern portion invaded by Russia and a scandal in the US Presidential election, there's still a strong university and tech pipeline.
- Manama, Bahrain - A new entrant on the 2020 list, Bahrain's government has been putting a ton of money into pushing technology. It now ranks #1 globally in internet usage, with 98% of the population online. That's spawned a startup ecosystem; combined with business friendly laws, makes it a great place to look at for talent.
- Taipei, Taiwan - Taiwan makes a huge percentage of the world's electronics, and consequently has a huge number of engineers specialized in hardware development and manufacturing.
- Canada (Overall) - Canada has a thriving tech ecosystem, particularly in Vancouver, Edmonton, Calgary and Quebec City. While cost of living is higher, particularly on the west coast, Canada has developed a strong tech talent pipeline.
The Past List
There are a couple cities that used to make the 'second tier tech cities' list, but don't anymore. Arguably these are first tier cities in their own right – with prices to match.
- Santa Monica, CA / Los Angeles, CA - Although I cringe at the name Silicon Beach, the western part of the Los Angeles basis (Santa Monica, etc.) has a growing number of tech startups and VCs. However, costs are now some of the highest in the nation; you won't find huge value here.
- San Diego, CA - San Diego is known primarily as a military town, but has some big name tech, such as Qualcomm, as well as a number of startups. Costs are lower than LA, but still not small.
- Vancouver B.C. - Canada's largest west coast city is home to a burgeoning startup scene – again with costs to match.
- Austin, TX - Sometimes called the Silicon Valley of Texas, Austin is home to a number of tech companies, including Dell, as well as increasingly popular tech festivals such as South-by-Southwest Interactive. Costs have risen massively in the last few years, and while it's still cheaper than San Francisco or New York, it isn't cost effective anymore.