Central Minneapolis emerges as a Midwestern tech hot spot
Minneapolis-St. Paul almost made yet another top 10 list last week when commercial real estate giant Cushman & Wakefield released Tech Cities 1.0, an in-depth report on America’s most innovative metro areas.
MSP landed at the #11 spot in the report’s Tech 25, a roundup of the best U.S. cities for tech sector growth.
That was good enough for second place in the Midwest, behind Madison (#10) and ahead of Chicago (#16), Columbus (#19), Kansas City (#22), and Indianapolis (#23). MSP couldn’t compete with the familiar coastal powerhouses like San Jose (#1), San Francisco (#2), Boston (#4), and Seattle (#6), nor with mid-continent innovation clusters like Austin (#7) and Denver-Boulder (#8).
But almost top 10 is nothing to sneeze at, right? And MSP boosters should be heartened to hear that the region owes its laudatory performance to familiar strengths — deep-rooted structural attributes that have supported MSP’s famously diverse economy for decades.
“The strong talent base in the Twin Cities plays a big role in attracting and retaining top employers, and we’ve seen that reach into the tech sector recently as well,” said Paul Donovan, executive director for local subsidiary Cushman & Wakefield NorthMarq, in a release.
Legacy players aren’t doing all the heavy lifting here though. Seduced by the region’s decidedly non-coastal real estate and employment costs, and clearly sensing an opportunity, Amazon signed a high-profile lease in downtown Minneapolis last year.
“With the arrival of Amazon in the past 18 months, the tech sector is really starting to take off,” said Jim Montez, senior director at Cushman & Wakefield NorthMarq, in a release.
According to Montez, amenity-rich central Minneapolis has emerged as the region’s tech hot spot, due largely to its popularity with the ambitious young entrepreneurs driving region’s surging startup scene.
“The North Loop and downtown markets are particularly appealing to tech companies on the search for young, versatile talent,” he says. The former is arguably hotter than the latter: Amazon recently announced plans to move from its current digs in downtown’s Fifth Street Towers to the North Loop’s hyper-connected T3 Building.
Minneapolis-St. Paul’s tech sector might be built on firm foundations, but Tech Cities 1.0 cautions that no region can take its status for granted in an ever more competitive tech industry.
New York City’s “Silicon Alley” is buckling under the strain of a talent shortage, exacerbated by high living costs and housing issues.
“One of the big issues for the companies coming to New York, particularly from San Francisco or Silicon Valley, was a lack of the skilled labor force they needed, particularly engineers,” said Ken McCarthy, Cushman & Wakefield’s principal economist, in a release.
The report cites Seattle, which has a fervidly pro-housing city government and a $54 billion slate of mass transit projects in the pipeline, as the poster child for continued tech growth. If MSP is serious about keeping up, regional boosters and decision-makers should look northwest.