Relocations from Silicon Valley
WHAT: The year 2020 saw major relocations from Silicon Valley giants making headlines. Tech companies like Hewlett-Packard and Oracle have announced moving their headquarters to Austin and Houston, Texas, and Elon Musk has also threatened to leave the Bay Area. Texas is not the only emerging tech destination, with states like Arizona, Florida, or Nevada, appealing to start-ups. At the same time, studies nuance the actual trends showing that 96.9% of startups stayed in the Bay Area during 2020, and of those that changed city 12% relocated to Texas, 21% to New York City, and 21% to other locations in California.
So what is the reason for these relocations? Much has been said in the news about California’s unwelcoming taxes and high cost of living driving companies and employees to curb their expenses through increased remote working. But these hubs didn’t emerge overnight and Texas, which hosts NASA’s headquarters and has invested in science and engineering programs, has been a major tech hub of 50 years. Miami, on the other hand, is already home to many Latin-American headquarters.
SO WHAT: If the reasons behind these relocations are ambiguous, there is however a noticeable shift from belonging to Silicon Valley being a must, to the emergence of a variety of hubs which offer different synergies and a better quality of life for employees. A lot of this is accelerated by opportunities for remote work that renew the emphasis on home location instead of office location for employees. One implication is that a more level playing field is emerging – meaning that a range of places now may have the opportunity to position themselves as up-and-coming innovation hubs.