I confess: I had never been to Atlanta prior to my visit last week to Savills Studley’s new Buckhead office. While I knew the basics of the city, after digging into the Atlanta's demographics and meeting some of the people responsible for improving the area’s business climate even further, I came away pleasantly surprised by what the city has to offer.
A Hub For Young, Educated Talent
The city of Atlanta comprises roughly 10% of the total Atlanta metro area, and it’s young, urban metropolis. A full 50% of Atlanta residents are below the age of 34, and a number of the area’s recent college graduates are choosing to stay in the city, bringing with them an immense educational resource that is supporting the city’s tech infrastructure.
Growth in Atlanta has surpassed the trend seen nationally, whether the metric is gross domestic product, the change in single-family home prices, or office-using jobs. Information sector jobs in the Metro Atlanta area grew by 3.2% in December, well ahead of the 0.2% increase seen nationally, for example.
Office Using Employment Growth, YoY % Change
Atlanta’s growth certainly isn’t limited to economic growth, either. Atlanta’s population growth has been greater than it has been in many other cities including Washington, D.C., Boston, Los Angeles and even New York. This population inflow has not only been driven by international migration but also domestic migration. What’s especially interesting is that over the past five years, a full one-third of Atlanta’s population growth has come from people inside the U.S. and in other parts of Georgia moving to Atlanta. Domestic migration flows have been challenging in many parts of the country (for example, domestic residents have been leaving Houston for other areas) so the fact that Atlanta is able to attract a lot of U.S. residents from elsewhere says a lot about the city’s appeal.
Components of Population Change: 2010-2015
Home to the Georgia Institute of Technology, Georgia State University, Morehouse College and Spelman College (among many others), Atlanta boasts a well-educated population. The percentage of the city’s core constituent workforce (those aged 25-64) who have a Bachelor’s degree or higher is in excess of 50%, which compares favorably to Charlotte and to Dallas (where less than one-third of those in the 25-64 year age range have a college degree.) Drilling down to an even younger portion of the population shows that 57% of the population cohort aged 25-34 have a Bachelor’s degree or higher. This figure is especially appealing for companies looking to expand and grow their workforce.
Atlanta’s educated workforce has held a lot of appeal for companies involved in the technology behind financial transaction processing (colloquially referred to as “FinTech.”) According to the American Transaction Processors Coalition, more than 60 percent of industry companies are based in Atlanta and 70 percent of all U.S. payments processed run through Georgia. The state is home to approximately 100 FinTech providers, according to the Technology Association of Georgia, and I would expect this number to expand going forward. As people buy an increasing proportion of their goods (and even services) online, demand for processing these transactions will continue to grow.
Percent of Population 25 to 64 years with Bachelor’s Degree or Higher
Cementing Atlanta’s identity as the capital of U.S. FinTech is an upcoming conference between the U.S. and the U.K.: the “P20.” The P20, hailed as a “Davos for Payments,” will bring 20 of the most influential leaders in the payments industry and top UK and U.S. regulators together annually to promote the growth of the FinTech industry globally. Atlanta and London will rotate as venues for the conference, and the exposure of many UK-based companies to Atlanta makes it more likely that more international companies will put their U.S. hub here.
Atlanta: The Ingredients for Growth
Atlanta is home to many Fortune 1000 companies, and has a handful of companies based overseas that already have located their U.S. headquarters here. Besides access to highly-skilled talent at salaries lower than those in many other metros, companies will find attractive state and county tax incentives for relocating to the area. The parent company of one of New York’s most venerated institutions—the New York Stock Exchange—has even located here (as my Atlanta-based colleague, Chris White, loves to remind me.)
Fortune 1000 Companies Headquartered in Atlanta, 2016
Both Atlanta’s public and private sectors have contributed to the city’s culture of fostering innovation. There are more than 20 corporate innovation labs or hubs based in Atlanta, including Georgia Tech’s Advanced Technology Center (to which Worldpay just made a $1 million grant.) The center has graduated more than 170 companies that have gone on to be successful companies.
Atlanta does have a reputation as being a hub for FinTech companies. However, Atlanta’s “tech” prowess extends beyond workers in financial services. The chart below shows the number of computer programmers and their average salaries by metro area—and includes a host of cities that are frequently compared with Atlanta. There are more computer programmers in the Atlanta metro area than there are in the San Jose Metro Area or in the San Francisco Metro Division (a subset of the Metro Area). Not only is there access to a “critical mass” of talent, but also that talent comes with a less expensive price tag.
Computer Programmers by Metro and Average Annual Wage, 2015
Atlanta is more than FinTech, however; it has is a healthcare technology hub as well. Not only is the CDC based here, but also the number of other healthcare-related foundations, non-profits and collaborative institutes that are working to advance healthcare and healthcare information technology is enormous. I think this sector will continue to pave the way for Atlanta’s growth going forward. A bonus? The healthcare sector tends to be much less cyclical, and the sector makes for a more diversified industry landscape.
Another thing I expect to help Atlanta’s growth is over time is the expansion of MARTA (Atlanta’s public transit system.) Atlanta’s half-penny sales tax increase (estimated to raise $2.5 billion over the next 40 years) for MARTA infrastructure and improvements just took effect March 1. It might take a while, but improvements and expansion are coming. The density map (below) suggests that at least for now, younger residents are choosing to locate in Atlanta proper. While ridesharing options abound, as public transit options expand, Atlanta’s appeal for younger and older workers alike will grow.
Density vs. MARTA Transit
So now that I’ve returned to New York, am I planning a move to Atlanta any time soon? Well, no…but it didn’t take long for me to feel the city’s energy (and hospitality!) and make me want to return. Atlanta makes a compelling case for any company looking to establish or grow their business via access to great talent and a top-notch business environment.