
Silicon Valley is changing, and its lead over other tech hubs narrowing - qubitcoder
https://www.economist.com/briefing/2018/09/01/silicon-valley-is-changing-and-its-lead-over-other-tech-hubs-narrowing
======
malchow
I think this is fairly mistaken. As a share of the tech economy, SV is almost
certainly declining. That's to be expected and embraced as labor economics
evolve.

That doesn't for a moment mean that northern California isn't still the place
with the maximum idea flow.

Three major things in SV that _aren 't_ declining:

a) Intelligent risk capital being deployed by scientists and engineers, not
MBAs

b) Stanford

c) Ambitious unmarried 20- and 30-somethings for whom quality of home life is
very unimportant

I'm not bullish on California politics. Single-party psuedo-progressive rule
can, eventually, ruin the state by driving people away.

But for density and quality of ideas, it seems to me that the gap between SV
and elsewhere is as wide as it has ever been.

~~~
cbHXBY1D
I would add UC Berkeley to that list. If you look at any big tech company in
the bay on Linkedin and sort by university, UC Berkeley students almost always
make up a plurality.

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SQL2219
good quote:

...it costs at least four times as much to base a startup in the Bay Area as
it would in most other cities in America.

~~~
philipodonnell
I expect it is also at least four times easier to raise capital in the Bay
Area as it would in most other cities in America. These things have a way of
evening out.

~~~
fnbr
I would honestly expect it to be more than 10x easier. In Canada, the idea of
raising a 2-3 million round is completely foreign, and in my city (Edmonton)
the idea is absurd. I strongly suspect you could raise 10x more much easier in
the Bay compared to Edmonton, making it worth it to have an office down there,
even though the cost of SWEs is ~4x cheaper here.

~~~
sanderjd
Honest question from a place of ignorance: why do you need an office there,
rather than just extended stays in hotels and some rented conference space?

~~~
fnbr
A lot of investors won't invest in companies that don't have large offices in
the Bay. Investors also generally advise against having remote offices when
you have less than 100 people. As a result, there's not really any reason that
startups need offices there other than that it can be difficult to get
investment if you're based elsewhere.

EDIT: I shouldn't say "the Bay", but rather, "the Bay/LA/NYC/Seattle". I more
mean "top tier startups cities" rather than strictly just the Bay, per se.

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biocomputation
And to think that so much of the technology that makes this possible comes
from the Valley itself!

As a US citizen, the idea of being able to work anywhere is appealing. If your
infra is everywhere, then I guess you could be anywhere too.

That's the dream, right?

~~~
shams93
Yeah it's inevitable, think of when Google was founded, people were still on
dialup and working remote was something only something for outside phone call
sales people.

~~~
raverbashing
With good planning, maybe not dialup, but it is doable to work remotely with a
not always on connection.

~~~
Uberphallus
Yeah, I've done remote work on dialup and my breaks heavily correlated with
cvs commands.

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11thEarlOfMar
"Alameda and San Francisco counties also are seeing slower population growth.
Existing residents left the region at their highest levels in seven years in
2017. International in-migration is compensating for the departures."

[1] [http://www.siliconvalleyoneworld.com/2018/03/25/new-
census-d...](http://www.siliconvalleyoneworld.com/2018/03/25/new-census-data-
silicon-valley-population-growth-slows/)

------
arcticbull
And crazy immigration laws and policies aren’t helping much either. IMO it
makes sense people are staying home and building their businesses instead of
uprooting to a place they perceive doesn’t want them, both from an immigration
and a housing cost perspective. This is the real cost of current rhetoric and
discourse, and it takes time to manifest, but the change is happening. Many of
my friends recently moved out of the Bay Area and back to their countries of
origin instead of pursuing a green card, and I’m on the fence myself, for
exactly these reasons. These are successful, connected people who’ve seen
exits too. I believe those who would be successful in SV can be successful
anywhere.

~~~
imrelaxed
I’m confused. There is almost no rhetoric against legal and/or qualified
immigration, just the illegal kind.

~~~
electic
You're kidding? There is more and more rhetoric being spewed relating to the
legal kind as well. There is even policy being enacted to drastically cut down
or make it very hard to gain legal status by burying you with paperwork.

Beyond immigration talk, the constant spewing of racism coming from the
administrations is a clear signal that immigrants of different backgrounds are
not wanted.

To that end, they simply pack up and build their business and wealth
elsewhere. We won't feel those effects right now but it will hit hard in a few
years.

~~~
repolfx
There has always been pressure against H1Bs in the US tech industry. The one
time I tried to immigrate to the valley there the visa cap was hit and I
couldn't go (no regrets though). For my whole life I've seen American talk
about immigration = outsourcing = lower wages. It's not new and it's not based
in racism but rather money.

As for Trump, he is only talking about illegal immigration. Nobody with an
engineering degree is going to care about his views on immigration, they may
even welcome them because Trump apparently (I did not know this until reading
the sibling links) wants to move to merit based immigration instead of a
lottery scheme, which would help high skilled workers.

~~~
moultano
_> Trump apparently (I did not know this until reading the sibling links)
wants to move to merit based immigration_

He also wants to cut the quota to a third of its current value.

~~~
repolfx
Not sure why you're being downvoted if it's true.

It can still be better for engineers though, if they are in the top third of
desired immigrants from a jobs perspective.

~~~
moultano
Engineering benefits from enormous network effects. American engineers are
better off if all the engineers in the world move here. The industry goes
where the engineers are. It's not because the valley has few engineers that it
pays high salaries, it's because it has many engineers, and the high paying
companies locate here to benefit from the network effects.

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sofon
I read the article, but I can't see how the title is supported.

What is for example, the second largest tech hub and how narrow is silicon
valley's lead over it.

I would guess that the bay area if way way ahead of anywhere else (I don't
like it, but it seems to be self apparent) and the lead is not narrow at all.

~~~
TulliusCicero
I'd bet either NYC or Seattle is number two. I think Seattle comes closest in
salaries thanks to the number of FAANG and similar companies with either HQ's
or large branches (same time zone as California helps). NYC is probably number
two as far as startup scenes.

~~~
volkl48
NYC and Boston are #2 + 3 for VC funding.

Seattle's a tiny fraction of either and not growing in that area.

[https://www.citylab.com/life/2018/03/the-extreme-
geographic-...](https://www.citylab.com/life/2018/03/the-extreme-geographic-
inequality-of-high-tech-venture-capital/552026/)

Obviously, that's only one measure of a tech scene, but I don't think
Seattle's that large.

~~~
sidr
Your article is titled "high tech" venture capital, but the Pitchbook data
they use span all sectors. If you include biotech, then yes, Boston will be
way up there. And New York is just a huge city and an economic hub, so there
will be a bunch of entrepreneurial activity going on there. But if you take
the more narrow view of "tech" as in computer-related things, I'd be surprised
if New York or Boston were much ahead. And yes, as you mentioned, it's one
measure of the tech scene. Seattle is Facebook's largest engineering presence
outside of the Bay area. I think Google may have more engineers in New York
right now, but that will not last - they're tripling their footprint in
Seattle right now. It's one of the largest (non-Bay area) engineering offices
for Uber and the largest for Lyft and Salesforce. And then there's MS and
Amazon. I've looked for SWE and data science jobs in New York and Seattle and
if you're not interested in FinTech, Seattle is the winner by a mile.

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qubax
Yesterday's more indepth discussion on the same topic from the economist.

[https://news.ycombinator.com/item?id=17875803](https://news.ycombinator.com/item?id=17875803)

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sergefaguet
another major part of the problem is the entitled, defocused employee culture
in silicon valley. generated by the fact that crazy talent competition ensures
employees have a huge safety net in the form of big tech.

i raise capital in silicon valley. but i do not want to hire people there.

i hire amazing engineers in russia at a fraction of the cost and they: \- are
loyal instead of jumping to new shiny stuff at every opportunity. \- have skin
in the game \- are focused on building products and not on things like "we
need to hire more female engineers even though none are applying."

and lifestyle-wise the bay area is just unpleasant. aggressive homeless
people. abysmal dating environment. awful traffic.

and of course the costs, taxes etc. top it all off.

that being said in terms of concentration of smart people that one can connect
with at a moment's notice, and in terms of fundraising, the Bay Area is
absolutely unparalleled.

my conclusion is to spend couple months a year there but live and hire
elsewhere.

~~~
alexpetralia
This is exactly why I left a quantitative trading company in NYC and moved to
Poland for software engineering talent. This certainly baffled my coworkers.

More and more companies will eventually recognize the talent abroad is how you
want to supply your business, while the market demand you want will still
remain in the U.S.

~~~
madengr
How about someplace in the USA that isn’t SV or NYC?

~~~
TheArcane
It's easy for talented people in the US to move to SV and NYC. It's a lot
harder for the same kind of people abroad to move to SV and NYC.

~~~
deadmetheny
Not all talented people want to move away from their friends and families to
live in 4x price of living shitholes.

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RestlessMind
> some think a recession might clear out some badly run companies and lower
> costs for the fitter survivors.

I hope it doesn't strengthen AAGMF further by making acquisitions cheaper.

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m23khan
Silicon Valley will remain to the IT industry what Wall Street is for the
commerce.

It is the peak, the absolute peak of humanity's IT pursuits.

I am not American, nor live in US and never been or worked in/for Silicon
Valley and yet this is how I feel about it. Sure, there are good times and bad
times but just like wallstreet has remained global champion of the commercial
world, so will SV. I have zero doubts about it.

~~~
engi_nerd
This sounds like an article of faith.

Do you really want to have faith in a place that is likely ephemeral?

People once had this same degree of faith in the technology corridor of New
Jersey.

~~~
NTDF9
> People once had this same degree of faith in the technology corridor of New
> Jersey.

Or a more sinister example: Detroit

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aricz
The LSD isn't working as intended?

