by Peter Franklin
Thursday, 26
November 2020
Idea
11:22

Will Covid kill Silicon Valley? 

A worker exodus from California marks a permanent change for Big Tech
by Peter Franklin
A tech worker, speeding away from California. Credit: Ole Spata/DPA/PA Images

During the Great Depression of the 1930s, poverty-stricken families from the American heartlands packed up their bags and migrated to California. 90 years later there are signs of a reverse migration. Only this time, it’s not farm workers, but tech workers. According to Katherine Bindley in the Wall Street Journal, smaller tech companies in places like Bloomington, Minnesota and Tucson, Arizona are getting job applications from the people based in the big coastal tech clusters.

As some of the employers interviewed in the article make clear, this is happening for the first time. If that’s indicative of a wider trend, then we’re looking at a significant disruption:

“For years, high-talent tech workers have been drawn to Silicon Valley, willing to put up with exorbitant housing prices and long commutes to benefit from the skill and experience of their colleagues, and the largess of employers and investors. The result, a culture of entrepreneurialism and inspiration, has been hard to match elsewhere.”
- Katherine Bindley, The Wall Street Journal

Birds of a feather flock together, and businesses are no exception. It helps to have your clients and suppliers within reach. It even makes sense to co-locate with your competitors — because you can keep an eye on them and there’s a bigger pool of local talent to recruit from. Arguably, Silicon Valley — home to Apple, Google and a long list of other hi-tech companies — is the most important business cluster on the planet.

That’s quite the irony, because this is the industry that was supposed to make geography irrelevant. Instead, the more we went online, the greater the concentration of the most highly qualified workers in a select number of superstar cities.

But is this paradox of the digital age unravelling? With the pandemic forcing millions of us to commute to our kitchen tables, we see tech companies in the forefront of this change. For instance, Google — once famous for developing the workplace into a home-from-home — told its workers they could work from their actual homes until the summer of 2021. Furthermore it’s the tech sector’s software and hardware that’s allowing us to work remotely whether we work in tech or not.

Of course, there’s a big difference between merely not commuting from a nearby suburb and moving hundreds of miles away. The latter looks a lot more permanent than the former.

One of the biggest worries about working remotely is that’s it bad for creativity. Without the interactions enabled by physical proximity it is feared that workforces won’t generate the ideas on which innovation depends.

But perhaps Silicon Valley has become too close. These days, it’s less of a cluster and more of a blob. Genuinely creative thinking is being smothered by a conformist corporate culture. Certainly, the last ten years of tech has been noticeably less exciting than previous decades. We’re still getting the iterative improvements, but where are the world-changing new products? I’m afraid Alexa can’t answer that one.

Therefore, the de-clustering of Silicon Valley might be just what it needs. Once the geeks are out of each other pockets, they might just feel free to think disruptively again.

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LUKE LOZE
LUKE LOZE
1 year ago

California has been losing people for a few years now. Covid-19 might speed it up – but a mixture of very high house prices and politics is driving this. The nuttier wing of the Democrats are in charge and wreaking havoc. 100,000s a year are leaving.

thea.brescia
thea.brescia
1 year ago

Friends who were closely connected to Silicon Valley culture, tell me they were tired of the alcohol and cocaine fueled gatherings after work hours. And the lockstep, pressurized leftist atmosphere leaves little room for original thinkers, political moderates.
Good article by Peter Franklin!

Fraser Bailey
Fraser Bailey
1 year ago

Well I know that Silicon Valley kills Covid information or views that do not align with the pro-lockdown obsession it shares with Biden and all forms of authority. So it would be ironic if Covid were to kill Silicon Valley. But I don’t think it will happen.

Ian Barton
Ian Barton
1 year ago

A great observation, that the best way to reinvigorate “original and disruptive” thinking is to get as far away as you possibly can from illiberal group thinkers before you get sucked into their vacuum.

7882 fremic
7882 fremic
1 year ago
Reply to  Ian Barton

Hard to hold a conversation in an echo chamber.

7882 fremic
7882 fremic
1 year ago

I have been everywhere in USA and Canada (and a lot of the world) and here is my advice: The Silicon Bayou. Mobile Alabama! Even Airbus moved there for its USA operation (to enable it to get US Military contracts as USA, unlike the stupid Brits and EU requires its military gear to be made in country, check out the last big USA footwear manufacturers, make all the military footwear, a vital strategic resource, and jobs because they have to be made in USA.)

Anyway, I know Mobile and it is amazing! Sort of like New Orleans but without the crime. Fantastic nature, unbelievably great nature! Nice people, good race relations (note they had no issues wile the West was rampaging), great property prices, water everywhere, fantastic weather, (excepting hurricanes, but now you can build for those), some arts/foodie/cultural/gay scene. Mobile is just perfect for taking on the Silicone leadership. You guys who do not know the Deep South do not realize how nice it can be because stereotypes which are not valid.

Want to leave NYC, Cincinnati, Chicago, California, Seattle-Portland, Baltimore, Greenbay, and all the other Democrat hell-holes for a great location? Mobile, just do not wreck it in the process.

GA Woolley
GA Woolley
1 year ago

No, it’s the ruling Democratic Party’s union-controlled woke obsession which is driving businesses away. High taxes to meet unaffordable public worker pensions, green policies driving up energy, water, and property prices, and identity politics ‘diversity’ dogma forcing universities and colleges to discriminate in favour of low-performing minorities and against high achievers is adversely impacting the intellectual seedcorn for ‘information age’ businesses. The State is bankrupt; its inequalities are in the highest tier of states, property prices going through the roof, and crime rates soaring. The public worker unions bankroll the Democrats, dictate which party candidates can stand, and far outspend rivals. The big corporations can afford to stay, for now. Many small and medium ones are getting out before the state implodes. California, like many other Democrat-controlled states and cities, is banking on Biden for a federal bailout.

Carl Goulding
Carl Goulding
1 year ago

Covid is a biological virus and Bigtech have thrived on this and will continue to to do so. What we really need is the equivalent computer virus to sweep through their ranks!!

cognitronz
cognitronz
1 year ago

The pandemic is certainly a catalyst, but California has been undermining its attractiveness for people who has the means. All these woke trends like calling your colleagues team members are falling flat. Maybe it’s time for the wokeologists to get a dose of what individualism means when voluntarily confined to their own house.

Andrew Thompson
Andrew Thompson
1 year ago
Reply to  cognitronz

Team members always annoyed me before I retired, mostly because it was blatantly obvious to a man with one eye that everyone of ‘my team’ were stabbing backs like Jack the Ripper on speed and only out for themselves. Another one I hate: When a firm calls their staff colleagues. You pay their wages they are staff. Maybe it’s an age thing, call me old fashioned.

Ferrusian Gambit
Ferrusian Gambit
1 year ago

Maybe you just weren’t very good? Technical skill is what counts in this world, as long as you are able to perform, be valuable and pass muster non of the BS matters.