The Tech Sector in DC
The District is at the center of an expanding regional tech hub - home to leading companies, growing brands, and innovative startups.
DC is at the heart of a booming regional tech sector that is growing in both scale and impact, with a wide diversity of companies, products, and services. Tech companies enjoy access to a highly educated workforce, a strong talent pipeline, a network of companies across different focus areas, active venture capital funding into the region, and opportunities to closely engage with government officials shaping the regulatory landscape for new technologies.
Tech Companies in the District
The District is home to hundreds of tech company headquarters as well as satellite offices of global businesses. The High-Tech industry, comprised of firms engaged in the design and development of products and services requiring scientific and technical knowledge, has been growing in the District over the last two decades. From 2005–2021, the District added approximately 20,000 employees and 5,275 establishments in the High-Tech sector. [1]
Narrowing down to the information technology sector, an estimated 330 DC-based tech and tech-enabled companies have received investor funding from 2000 to August 2022, according to PitchBook data. [2] These companies have raised an estimated $8 billion and are innovating in a wide variety of subsectors.
This heat map shows that DC's tech companies primarily cluster in the downtown area, where businesses enjoy easy access to the metro region’s diverse labor pool, stations covering all six Metrorail lines, and many options for dining, hotels, and meeting venues.
As shown in this map, the District’s tech companies offer products and services to a diverse customer base that provides consistent revenue opportunities. DC is home to the country’s largest investor in tech solutions, the federal government, which in FY 2021 spent more than $75 B on IT, demonstrating the demand for cybersecurity and modernization programs. [3] In the mega-region from Richmond to Baltimore, cybersecurity alone contributes to more than $14 B in annual economic impact, [4] while there is a $5 B annual market for electronics and appliances. [5]
Explore this map to learn more about what innovations and services these companies bring to DC.
Map data source: PitchBook.
Tech Talent
DC businesses draw from a highly skilled and diverse talent pool
The DC region is distinguished by its highly educated and skilled labor pool and by the strength of its talent pipeline into the tech industry. In 2022, the DC metro area ranked third in the country, only behind the Bay Area and Seattle, in tech talent in CBRE’s Scoring Tech Talent report . With 259,000 tech workers in 2021 (a nearly 6% increase from 2016), the report recognized the region as a top tech education market with degree completions in tech-relevant programs estimated to have increased by 25% over the period from 2016-20. The table to the right compares the metro region to top competing areas in IT employment. The region has a location quotient of 2.04, indicating that the concentration of IT employment is twice the national average. [6] The region's competitive advantage in this industry and its sizeable labor pool make it a national tech hub.
Major occupation groups in the region include:
- Software Developers
- Computer Systems Analysts
- Computer User Support Specialists
- Network and Computer Systems Administrators
- Information Security Analysts
Universities & Partnerships
20 higher ed institutions, 13,000 annual IT-related awards
To maintain this position, cities and counties across the region are working collaboratively to bolster DC’s tech ecosystem and talent pipeline. There are more than 20 regional colleges and universities offering advanced degrees for both technical and support skills (ex. marketing, project management, sales, and operations) in addition to several satellite campuses in the area. In the 2019-2020 academic year, the DC metro region awarded nearly 13,000 certificates and degrees from IT-related academic programs. [7] Top programs are highlighted in this table.
To support the growth of surrounding companies, regional universities are constantly innovating their programming to draw students and keep pace with demanded skillsets in the field, as shown in these examples:
- Center for Applied Data Science (Howard University): Mastercard granted $5 million to Howard to create the center and launch a new master’s program in applied data science.
- Brendan Iribe Center for Computer Science and Engineering (University of Maryland): The new UMD center brings together the Department of Computer Science and the Institute for Advanced Computer Science with a focus on innovation, data science, cybersecurity, and robotics.
- Innovation Campus (Virginia Tech): The $1B graduate Innovation Campus will focus on computer science, computer engineering, and emerging tech.
- Institute for Digital Innovation (George Mason University): GMU is expanding its campus in Arlington, VA, which will include a new Institute for Digital Innovation and a School of Computing.
Recent Announcements
01 / 06
1
FiscalNote: Public listing in 2022
The AI-driven policy and market intelligence provider became a public company in August 2022 after reaching a $1 billion valuation.
2
Caribou: Fintech unicorn
The auto refinancing start-up recently closed a $115 million funding round in May 2022, reaching a valuation of $1.1 billion. In 2021, the company relocated to the District from Arlington, VA.
3
Google: Expanding DC footprint
Parent company Alphabet announced in April 2022 that it would be expanding Google’s DC office presence by subleasing an additional 130,000 SF in downtown DC. The company could employ 400 engineers at the new location, drawing on the District’s extensive talent pool.
4
TikTok: New DC office
Parent company ByteDance signed an initial lease in the Union Market neighborhood in January 2022 before expanding with an additional floor in April for a total of 73,900 SF.
5
Xylem: HQ relocation
After announcing plans to lease 17,000 SF of office space in the Capitol Riverfront neighborhood – the company decided to relocate the global HQ from New York to DC in March 2022.
6
Morning Consult: Business intelligence unicorn
The DC-based research and intelligence company raised $70 million in a Series B round – reaching a valuation above $1 billion in 2021.
Accelerators & Incubators
The DC tech ecosystem is supported by several prominent accelerators and incubators that offer mentorship, funding, and coworking space to District tech start-ups. Click through the map for information on a few of these local accelerators and incubators. The District is home to additional programs from organizations such as TechStars and Washington DC Founder Institute .
To explore additional coworking spaces, visit our DC Coworking & Flexible Workspaces map.
Innovation in Downtown DC
The District is also making investments to support its network of downtown tech companies. A collaboration between the Golden Triangle BID, the DC government, and additional partners, the PennWest Equity and Innovation District in the Golden Triangle was announced in May 2022 and will build off the presence of four key tech sectors—medtech, govtech, fintech, and edtech—to nurture and retain talent, develop a highly competitive workforce, and serve as a new economic engine for DC.
Incentives
The District government supports tech companies through several programs and opportunities:
Vitality Fund : A new incentive providing grants to employers in high-growth sectors with 25+ employees that commit to locating or staying in the District.
Qualified High-Tech Companies (QHTC) Incentives : A business qualifying as a QHTC may claim tax benefits including a reduced capital gains tax rate, a new hire wage and retraining tax credit, and a 5-year freeze on real property taxes for office improvements through the Creative and Open Space Modernization (COSM) Tax Rebate .
DC Department of Employment Services : Offers a variety of services to help District employers including the Work Opportunity Tax Credit (WOTC), On the Job Training, and Apprenticeship Programs.
About Us
The Washington DC Economic Partnership (WDCEP) is a non-profit, public-private organization that drives inclusive economic growth and job creation, supports businesses, and promotes Washington, DC as a leading global city.
WDCEP is your leading resource for doing business in DC. For market intelligence on the tech sector, relocation or expansion assistance, and other support, contact Kevin Morgan at kmorgan@wdcep.com .
Sources
[1] A firm in the high-tech industry is an establishment that is “engaged in the design, development, and introduction of new products and innovative manufacturing processes, or both, through the systematic application of scientific and technical knowledge.” Examples include computer systems design, scientific research and development services, wireless telecommunications carriers, and data processing. Source: JobsEQ. Total High-Tech.
[2] PitchBook. Information technology companies headquartered in the District that received funding from 2000 – August 2022. Does not include firms that have been acquired/merged and are not operating subsidiaries. Retrieved September 2022.
[3] GSA. IT Portfolio Dashboard .
[4] Greater Washington Partnership. (2017). Partnering to Strengthen Tech Talent in the Capital Region .
[5] Esri. 2022 estimates. Washington, Baltimore, and Richmond CBSAs.
[6] A location quotient is a ratio comparing one area’s concentration of employment in an industry to a reference area (for example, to the U.S. as a nation). If an LQ is equal to 1, then the area has the same share of employment in the industry as across the nation. An LQ greater than 1 indicates that the area has a greater share of employment in an industry than is the case nationwide.
[7] JobsEQ. 2019-2020 academic year: Washington-Arlington-Alexandria, DC-VA-MD-WV MSA, Information Technology (CTE Cluster) awards.
Although every attempt was made to ensure the accuracy of this information, WDCEP makes no warranty or guarantee as to its accuracy, completeness, or usefulness for any given purpose.
