Report: SD Outranks NY, Austin in Software

In the past two months, Bizness Apps and Wrike, two Silicon Valley SaaS start-ups, announced relocations and/or expansions to San Diego—a sign that the region’s ecosystem is gaining national visibility.

SAN DIEGO—San Diego ranks seventh overall on San Diego Regional EDC ‘s software power index—ahead of Austin, Portland, Los Angeles and New York—which measures the region against the top 50 most-populous metros across the country by combining data on concentration of software developers, talent, prosperity and capital, according to a new EDC report. San Diego’s software-development ecosystem impacts more than 100,000 jobs in the regional economy. With employers anticipating 18.1% growth rate in software jobs over the next year, software is one of San Diego’s most rapidly growing employment sectors, the report states. “ Software Development: Driving San Diego’s Tech Ecosystem ,” sponsored by Hired, TVC Capital and Benefits Tech Trust , with additional research support from CBRE , examines the region’s growing tech hub as it relates to software talent and capital investment. The study looks at software workers and auxiliary support staff across every corner of the region’s economy . Kirby Brady , director of research for EDC, tells GlobeSt.com, “Based on company expansions and other data points, we knew San Diego had a strong software ecosystem, but we didn’t have concrete data to measure where San Diego—as a region—stacked up to peers across the country. The software power index was created to answer this question. After crunching the numbers, we confirmed that San Diego is a competitive metro for software development, outranking Austin, New York, Portland and other cities that were thought of as ‘traditional’software hubs. For example, when it comes to capital, San Diego ranked fourth in ‘VC investment per worker,’ putting the region just behind San Francisco and Boston. Another area where there is a perception that San Diego lagged other regions is the number and concentration of developers . In reality, San Diego is one of only five metros with above average concentration of developers and better than average retention of workers. One of the reasons we don’t recognize our strength is that much of San Diego’s software-development work is concentrated in other industries. For example, San Diego is arguably a leader in genomics and drones—two very different industries that rely on software development for their innovation. When we look at the big picture, we can better understand just how strong our economy is.” According to San Diego Mayor Kevin Faulconer , “From Intuit to Illumina , software development permeates nearly every facet of San Diego’s economy. Software development is helping to increase our workforce talent pool, diversity of job opportunities and capital investment .” The Mayor voiced is support of EDC’s report, which “highlights our competitive edge in our tech ecosystem that’s making us a global leader in innovation and technology .” EDC states that across the globe, start-ups and technological innovations are catalyzing a new wave of economic growth. While regions such as Silicon Valley are known for creating consumer-facing applications, San Diego’s software ecosystem permeates through every corner of its economy. Defense, communications and genomics companies—classified as “software dependent” in the study—are increasingly reliant on software talent and functions to grow. In fact, software developers in San Diego are twice as likely to work in scientific R&D than the rest of California. Mark Cafferty , president & CEO of EDC, says, “From mapping to genome to piloting unmanned systems, software is the foundation behind most of San Diego’s breakthroughs and innovation. With this study, we now have the ability to quantify the depth of the software ecosystem for the first time. We know San Diego is a good place to build and locate a business—and companies are following suit.” As GlobeSt.com recently reported , Bizness Apps is one successful tech start-up that decided to relocate to San Diego from San Francisco for strategic reasons. In the past two months, this firm and Wrike , two Silicon Valley SaaS start-ups , announced relocations and/or expansions to San Diego—a sign that the region’s ecosystem is gaining national visibility. Bizness Apps’ CEO Andrew Gazdecki told GlobeSt.com that the main reason his firm chose to move to San Diego is due to its wealth of talent, both experienced and entry-level. Other key findings from the study include:

• The total economic impact of San Diego’s software ecosystem is $12.2 billion annually.
• One in six innovation-economy jobs are in software development.
• San Diego ranked eight for talent on Software Power Index; only 10% of employers reported dissatisfaction with their ability to recruit high-level talent here.
• San Diego ranked fourth in capital on Software Power Index (venture-capital dollars per capita); San Diego’s software-specific VC was up by 38% in 2015.
• Mergers and acquisitions comprise 68% of San Diego’s capital flow; on average, US metros receive 42% of capital through M&A.