The tension between economic success and social equity is not unique to Cambridge. A look at demographic, housing, and economic trends across a cohort of 25 innovation cities1 — including established ones like San Francisco and Seattle, growing ones like Denver and Austin, and emerging ones like Nashville and Pittsburgh — reveals characteristics and challenges familiar to us in Cambridge.
of Cambridge residents are employed in the innovation sector
Cambridge has the 4th highest median household income
median monthly contract rent in Cambridge
Although by far the smallest of the cities, Cambridge is the leader in terms of employment in the innovation economy. With more than 20 percent of adults working in an innovation cluster occupation such as software development or biochemical research, Cambridge has a higher concentration of this workforce than any other innovation city, ranking above Seattle, with 15.4 percent, San Jose (14.9 percent), and San Francisco (12.5 percent). Moreover, Cambridge ranks sixth among the 25 cities — behind only Seattle, Miami, San Francisco, Denver, and Washington, D.C. — in the growth in this workforce since 2010.
25 INNOVATION CITIES
Innovation cities are defined by an economic base concentrated in high-tech, biotech, engineering, and life sciences jobs, and “the intrinsic qualities of cities: proximity, density, authenticity, and vibrant places.”2
Share of Residents Employed in the Innovation Sector
Top Five Cities
Chart 1.1: Share of Residents Employed in the Innovation Sector
22% of Cambridge residents are employed in the innovation sector.
“Kendall Square enables the future by connecting the people changing the world. We helped guide the first moon landing, map the human genome, and fast-track COVID-19 testing and vaccine development. Now, our greatest challenge is pivoting our policies, practices, and resources to collectively and collaboratively create equity across the region.”
— C.A. Webb, President, Kendall Square Association
Income and Inequality
With a median household income topping $95,000, Cambridge ranks fourth in income among today’s leading innovation cities. In fact, Cambridge now ranks among the top cities in almost every measure of income — and also of inequality. Cambridge has the fourth-highest median household income, at just over $95,000, behind only Arlington, Virginia, with $117,374, San Francisco ($104,552), and San Jose ($104,234), and well above the 25-city median of $60,760. Cambridge led all innovation cities in income growth in the past decade.
However, of the 25 innovation cities, Cambridge has the seventh-largest gap between average households in the top and bottom quintiles, behind only Boston, Atlanta, Washington, D.C., New York, Miami, and San Francisco, with the average household income in the highest quintile earning 25 times as much as in the lowest quintile.
Chart 1.2: Median Household Income, 2018
Cambridge has the 4th-highest median household income: $95,404.
Chart 1.3: Ratio of Average Income, 2018
The average top quintile household earns 25 times more than the average first quintile household.
Cambridge resembles other innovation cities in the demographic changes now shaping it, including population growth in the millennial workforce, fewer children, and shifts in racial and ethnic diversity marked by a decline in the share of the Black population. All 25 innovation cities except Pittsburgh and St. Louis experienced some population growth over the past decade. Cambridge falls in the middle of the group in this respect, ranking 12th behind many of the growing innovation cities in the West and the Sunbelt.
Student and Millennial Workforce
Cambridge has the largest share of 18- to 34-year-olds of any innovation city. It leads the pack in the share of college-aged and millennial workforce populations, with 18- to 24-year-olds now comprising 20 percent of the population and 25- to 34-year-olds accounting for 28 percent. Both of these age groups are contributing to the city’s population growth. Cambridge ranks second among innovation cities for overall growth in population between 18 and 34, with almost all of that growth attributable to the younger group.
Chart 1.4: Change in Population, 2010-2018
Cambridge ranks in the middle of the pack in recent population growth.
Chart 1.5: Change in Population 18 to 34 Years Old, 2010–2018
Cambridge has attracted more young adults than almost all other cities.
Children are disappearing from innovation cities nationwide. With the exception of Arlington, Virginia, and Washington, D.C., all of the innovation cities have lost children since 2010. Cambridge ranks among those with the largest decline in the under-18 population, and now has the smallest child population of all innovation cities. Children under 18 make up just 12.4 percent of the city’s population.
Chart 1.6: Share of population under 18 years, 2018
Cambridge has the smallest share of children.
Chart 1.7: Change in population under 18 years, 2010 – 2018
Almost all innovation cities are losing children, with Cambridge in the middle of the pack.
Race and Ethnicity
Racial and ethnic shifts in innovation cities overall mirror those of Cambridge. When it comes to racial and ethnic diversity, innovation cities vary dramatically by region, with cities like Miami and Phoenix home to large Latinx populations, Atlanta and St. Louis with more Black residents, and San Jose and San Francisco with larger Asian American populations. Cambridge is among the innovation cities with larger white populations, ranking behind Portland, Pittsburgh, and Seattle. When these populations are taken as a whole, however, innovation cities mirror patterns seen in Cambridge: large growth in the Asian and Latinx populations, a slight uptick in the white population, and either a decrease or no change in the Black population.
Chart 1.8: Change in Population by Race/Ethnicity, 2010–2018
Cambridge is becoming more diverse but with a stagnating Black population.
Chart 1.9: Population by Race/Ethnicity, 2018
40% of Cambridge residents are people of color.