How far has the up-and-coming tech hub Raleigh come?
Raleigh, North Carolina is not a city whose name resonates around the world. It is not a New York or an LA and yet in 2014, many voices in US business were naming the state capital as an emergent tech hub in the USA. Its position within the well-established “North Carolina research triangle”, its low cost of living and its high job growth all suggested a city on the up. But why should its rise be tech based?
Aside from the surrounding research triangle, Raleigh is also home to several Fortune 100 companies such as IBM, Sony Ericsson and Cisco. In addition to this, Raleigh hosts several prestigious colleges, with a reputation for engineering and technology, such as UNC and Duke.
Was Raleigh really seen as the new Silicon Valley?
While Raleigh was indeed one of several cities identified as blossoming with investment and potential, it was not the frontrunner of those selected. The very numbers used to identify it as a nascent tech hub also pointed to other cities with greater credentials. Mattermark analyzed over 6,700 investments in almost 5,000 companies in early 2015 in order to compile its list and Raleigh did not make the top two.
Jason Rowley of Mattermark wrote at the time that to be a first choice, a city needed “an average of $250 million…annual investment in early stage companies…upward momentum in deal-making” and “a particularly high rate of investment activity in 2015.”
On this matrix, the top two cities were Seattle and Denver. Raleigh came in the next tier down as a promising and exciting city, but one that missed one of the criteria to make it a top choice. However, predictions and realities are often mutually exclusive and the data over the past 18 months indicates that Raleigh is in fact well on its way to being a major tech hub within the United States.
Raleigh – a leading light in STEM employment
A city does not need to be universally recognized as the number 1 in a given field for it to be a powerful and significant player. In 2015, Forbes magazine had printed a report finding that Raleigh had the highest rate of job growth in STEM (science, technology, engineering and math) fields between 2004 and 2014.
In jobs that were specifically tech based, Raleigh’s growth over that decade was found to be at 73.9% whereas the world renowned Silicon Valley in San Jose had tech growth over the same period of 70.2%. Evidently, it is important to recognize that Silicon Valley had a large and well established industry already and as such, an embryonic industry will often show greater growth. However, it is clear that Raleigh’s tech growth is impressive and on a national level it was only second behind Austin, Texas.
According to a 2016 industry report by North Carolina State of Technology, tech jobs accounted for “11 percent of the state’s total wage earnings and jobs.”
The same report has predicted that tech growth in the state will continue at a rate of 7.9% up until 2020; with Raleigh at the forefront of this expansion, it has surely earned the right to be spoken of as hotspot for tech-based jobs.
Up-and-Coming or Already Here?
Raleigh is already home to several vaunted technology startups. Red Hat is probably the most famous of these. The software company began in 1993 and was turning over $1.13 billion by 2012. Over the past few years, several large tech firms have relocated their main offices to Raleigh or the surrounding area, from IBM to Cisco and young, exciting companies like Epic Games are also now based in the Raleigh area.
The growth of tech operations in the city has attracted major attention from industry figures. Steve Case, the AOL co-founder, spoke about the area in 2015 saying, “The Triangle startup scene is rock n’ rolling…We’re trying to shine a spotlight on the regions that are up-and-coming…In some ways the Triangle has already risen.”
It is clear that Raleigh has a long way to go before it can rival Silicon Valley’s success. But as tech industries lead the charge in the city’s growth, it is fair to say that Raleigh deserves to be viewed as a genuine tech hub in the USA.