Silicon Valley has long been considered the most viable option for starting a business or finding a job in the tech industry. Its reputation is largely self-affirming, though — as long as it’s seen as the hub of the tech world, it will be by virtue of attracting an abundance of startups and the top talent in the industry.
Silicon Valley’s reputation has been slipping lately, however, which could indicate that it will be surpassed as the foremost entrepreneurial hub in the not-too-distant future.
With the recent slew of accusations against Silicon Valley venture capitalists regarding sexual misconduct and a pervasive attitude of sexism, the hub is beginning to lose its shiny reputation as a spot for some of the world’s most progressive thinkers. The Elephant in the Valley survey brings some of these issues to light, pointing out that 60 percent of respondents had been subjected to unwanted sexual advances. Of those, 65 percent had been harassed by a superior.
Besides an apparent marginalization of women, Silicon Valley’s success has, in part, contributed to its latest problem. According to a study from real estate brokerage firm Redfin, 25 percent of Bay Area residents are now searching for homes elsewhere, mainly in places like Seattle and Portland. While salaries for software developers and the like aren’t as high in these places -- in the case of Portland, they’re about $32,000 less -- the median home price is generally targeted at least half a million dollars lower than the $1.05 million price tag found in Silicon Valley.
The exorbitant real estate prices in Silicon Valley have yet to cause a mass exodus, but they’ve driven top talent to begin looking elsewhere for the next job or startup.
So where are they moving?
1. Salt Lake City, Utah
This Utah city sits between a line of locations that are creating an area set to rival Silicon Valley. From Ogden to Provo, the area has startup companies worth an estimated $12 billion as of mid 2017. The area is attractive for its reasonable real estate, tech talent from the local universities, and low taxes.
Additionally, the U.S. Chamber of Commerce recently ranked Utah No.1 in innovation and entrepreneurship as well as No. 2 in high-tech performance and No. 3 in economic performance in a study of all 50 states. The state also topped CNBC's America's Top States for Business list this year.
2. Tampa, Florida
Bill Gates’ Cascade Investment is investing $2 billion in reinventing the Tampa of the future as an incubator and preparing its infrastructure for growth. Investor Jeff Vinik, now owner of the city’s NHL Tampa Bay Lightning team, has joined him. The pair aims to help build a future for the more than 200 residents flocking to the city each day, according to a CNBC report.
“Top-tier tech graduates flock to Silicon Valley but pay dearly while living the dream,” says Dan Wesley, CEO of Tampa-based Quote.com. “We want to show there is much to be learned and the same salary to be earned, allowing talented employees to learn and grow professionally without them having to live in their cars in our parking lot because of the skyrocketing cost of rent.”
3. Huntsville, Alabama
The tech growth of Huntsville began in the 1950s, with the arrival of scientists working for the U.S. space program. Since then, Bloomberg reports that nearly 17 percent of the workforce is employed in a job related to science, technology, engineering or math. The city saw a 309 percent growth in tech jobs over the past year, as reported by CBS News.
4. St. Louis, Missouri
St. Louis happens to be the home of the Ameren Accelerator Powered by University of Missouri System, UMSL Accelerate & Capital Innovators. This organization, which recently chose seven energy technology startups for its first-round cohort, aims to provide promising new companies with funding, perks, benefits, office space and intensive mentoring. The goal is for the accelerator program to help ensure their success and drive innovation in the energy industry that benefits future residents.Ameren CEO Warner Baxter points out, “The Ameren Accelerator is one of the first of its kind in the country to focus exclusively on energy technologies.”
The seven companies represent a group that is diverse not only geographically, but also in its members’ areas of expertise. Warner is also a member of the St. Louis Regional Commerce and Growth Association, an organization dedicated to attracting resources and people to St. Louis in order to help the city compete with the other tech juggernauts of the world.
5. Seattle, Washington
While it has been a tech hub for awhile now thanks to companies like Microsoft, the Seattle area is picking up the pace in terms of its incubation of tech startups. Recently, there has been tremendous growth in space startups. Combined with other factors, such as job growth, a healthy economy, and more reasonable real estate, reports indicate that many who are fleeing Silicon Valley are ending up in Seattle.
6. Phoenix, Ariz.
The relatively close proximity of Phoenix to Silicon Valley definitely doesn’t hurt its status as a tech city, nor does the fact that the median home price is only $214,000, according to real estate listing site Zillow.
With a population of 1.5 million, the city is well-established, and the presence of companies such as Datashield, MST Solutions and General Dynamics has helped contribute to a one-year job increase of 188 percent in the technology sector.
7. Albany, New York
Albany has worked to create an ideal environment for tech companies and employees, and as a result, the city has enjoyed 161 percent tech job growth over the past year. The local universities ensure that companies in Albany have a well-educated talent pool to draw from, and the state government has also created tax breaks meant to attract investment in the city and contribute to its growth as a tech hub.
No doubt Silicon Valley will retain the highest concentration of tech companies in the country for a number of years, but the bubble is beginning to approach its bursting point. In spite of the hefty salary afforded to many of the area’s tech jobs, employees are unable to keep up with skyrocketing real estate costs. Fortunately, other cities around the country are recognizing the advantages of attracting tech companies and working to position themselves as ideal locations.