The short version
With growing workforces and startup ecosystems, both Waterloo and Austin are strong contenders for tech expansion. Our Tech Data Points series helps you compare top tech hubs across five key metrics – including talent growth and costs – to see which one is best for your company.
You’re a business leader of a growing tech company. You’re considering expanding to a new location. It’s the next logical step in your company’s evolution, but you’re wracked with questions and concerns.
‘Where will you find the best talent? How will you drive new product development? Who can you work with to find the next great idea? How can you cut costs without reducing productivity?
Waterloo has excellent answers to all these questions. We could tell you all about our community, but we’ll let the numbers do the talking. In the tables below, you’ll find an apples-to-apples comparison between Waterloo and Austin, Texas.
Austin is widely recognized as a top-tier tech hub, known for its strong talent pool, startup ecosystem and business-friendly environment. It’s home to major global companies, and its reputation for innovation is reinforced by events like South by Southwest (SxSW) – a festival that blends film, music, interactive media and emerging technology.
The Waterloo region shares many of these attributes.
This rivalry emerges from our newly released Tech Data Book, which features comparisons between Waterloo, Austin and several other excellent tech hubs in North America. We’ve already pitted Waterloo against Silicon Valley and Pittsburgh – Austin is up next.
Key Takeaways
- Austin has a robust tech talent workforce, but Waterloo’s tech talent growth and concentration are stronger than Austin’s.
- Both cities are experiencing rapid population growth across all demographics.
- It is $22M less expensive to set up a tech office in the Waterloo region than it is in Austin.
- The Waterloo area offers substantial corporate and payroll tax benefits for tech companies.
Data Point #1: Tech workforce size and growth
With a tech workforce of 103,210 and a concentration of 8.0%, it’s clear to see that Austin is a strong tech hub.
The city is known for its quality of life and well-rounded tech ecosystem, which includes multinationals such as Google (a company that also calls Waterloo home). Its tech talent growth rate of 10.2% ranks among the top cities in our North American comparison.
One of the only communities that outscore Austin in terms of concentration and growth is Waterloo.
Clearly, Austin is a fierce competitor, but Waterloo still takes the lead in two out of three categories. Our growing tech workforce is dynamic and experienced, supported by three post-secondary institutions – including the University of Waterloo, Canada’s top technology school.
Business-friendly immigration programs also help American companies retain global talent. And, according to CBRE, Waterloo remains one of North America’s top tech talent markets.
Data Point #2: Population growth
Austin may be growing rapidly, but Waterloo tops the charts in key demographics for talent attraction. Young professionals in their 20s and 30s make up the largest percentage of the workforce, contributing to Waterloo’s thriving talent pipeline.
Waterloo is a global leader for engineering and technology talent, as a result of world-class educational institutions like the University of Waterloo and innovation hubs such as the Accelerator Centre and the Institute for Quantum Computing.
With world-class institutions driving population growth, Waterloo significantly surpasses the growth rate of Austin in both demographic categories.
Data Point #3: Estimated one-year company cost (USD)
Waterloo’s affordability profile is on display in this data point. Simply put, it’s less expensive to set up shop in Waterloo than Austin, by a margin of approximately $22M. These figures account for the same workers in the same roles in the same amount of office space.
In an expansion journey, annual costs make a huge difference for companies looking to scale quickly, effectively, and successfully. According to CBRE, Waterloo continues to offer the “best value in terms of cost and quality” for tech companies, which is evident in this comparative data display.
Data Point #4: Payroll taxes
Payroll tax is the mandatory contribution your company must make to employment insurance, social security, pensions and workers’ compensation on behalf of your employees. As you make financial expansion decisions, payroll taxes are an important consideration in your comparative location analysis. They’re essentially a growth tax – the more you grow, the more you pay.
Companies located in Waterloo pay about $1,140 less in payroll taxes per software engineer than those located in Austin. That’s a big difference. Waterloo’s cost-effective business environment is in large part due to lower business taxes, payroll and corporate.
Additionally, companies in Waterloo can save as much as 66.5% of their R&D expenses through tax credits, especially when partnering with world-class institutions like the University of Waterloo.
Data Point #5: Diverse talent
Although a large percentage of Austin’s population are immigrants, Waterloo’s community is more diverse. Our welcoming and progressive culture fosters diversity in the tech sector, leading to a strong quality of life for employees and a deeper talent pool for innovative companies.
Beyond our world-class tech ecosystem, Waterloo’s quality of life makes our community a great place to call home. Our diversity only strengthens that assertion.
Want more data?
Our new Data Book offers thirteen different tables comparing salaries, taxes, population growth, talent diversity and more across eleven North American tech communities, including Detroit, Columbus, Pittsburgh, New York and Silicon Valley. Download your free copy now.