Innovation: The end of Silicon Valley?
“Silicon Valley is over,” said Kevin Roose in The New York Times. Or so say the tech world’s best and brightest. Fed up with the exorbitant cost of living, the constant congestion, and the “left-wing echo chamber,” Silicon Valley’s luminaries are increasingly looking enviously at other parts of the country—and pondering an exodus. Billionaire Facebook board member Peter Thiel is decamping to Los Angeles to escape what he called San Francisco’s “toxic” progressive orthodoxy. Google and Facebook have opened outposts in such cities as Boston and Boulder, and on a recent bus trip through Ohio, Michigan, and Indiana, tech venture capitalists clearly got “the heartland bug.” They gawked at the availability of cheap homes and marveled “how even old-line manufacturing cities now offer a convincing simulacrum of coastal life, complete with artisanal soap stores and farm-to-table restaurants.” Complaining that they feel scapegoated at home, some openly mused about how it would feel to live where entrepreneurs still are admired and respected. Indeed, many are now “flirting with the idea of leaving.”
“Flirting is very different from deciding to have a fling, let alone a marriage,” said Dan Primack in Axios.com. Few people think Silicon Valley will suddenly stop attracting the tech industry’s talent and cash. But that doesn’t mean that a growing number of Valley investors aren’t interested in diverting some of their money to startups between the coasts. Recent data even suggest that “California-focused funds no longer generate most of the top returns.” Shifting the center of the tech industry’s gravity away from Silicon Valley might also “solve some of the problems” that cash-flush companies have created, said Erin Griffith in Wired.com. Investors who back startups outside of the Valley say that there is less of a fixation on hypergrowth, and a “greater sense of obligation to the communities they operate in.” Still, it’s a “delicate dance” for cities that hope to replicate the Valley’s success and become tech hubs. They have to figure out how to empower entrepreneurs to create jobs, while avoiding the housing shortages, soaring living costs, and congestion that can follow.
The truth is, there are “two kinds of cities in the world,” said Peter Cohan in Forbes.com, and only a “tiny fraction” are startup magnets such as San Francisco. “It is quite possible that a handful of geniuses could decide to start world-changing companies in Detroit, Akron, and South Bend, Ind.” But the money and talent, for now, is still in the Bay Area—and will be for the foreseeable future. People have been saying Silicon Valley is too crowded and expensive “since the 1970s.” And until engineers can match their Valley starting salaries of $200,000—compared with $50,000 elsewhere—“it will take a cataclysmic event for talent to move.” ■