It is the beating heart of the tech world and its unmatched capital since the 1930s. But Silicon Valley The position of the industry’s epicenter has taken several powerful hits in recent weeks, as the impact of the Covid pandemic has been felt. A small but highly publicized number of so-called “Texit” companies have decided to leave their California bases and establish a new headquarters in Texas . While Facebook , Apple and Google are not going anywhere, other legacy companies, technology leaders and venture capitalists are on the move. Database giant Oracle Corp, which only signed a 20-year sponsorship deal worth $ 180million (£ 132million) last year to name the San Francisco The Giants’ Oracle Park baseball stadium announced its move from Redwood City, Calif., To Austin , Texas. “We believe these moves best position Oracle for growth and give our staff more flexibility over where and how they work,” spokeswoman Deborah Hellinger told CNN. Hewlett Packard Enterprise, which has a long and famous history in Silicon Valley, also announced the relocation of its headquarters to Houston, Texas. And earlier this month You’re here founder Elon musk , who lives in Los Angeles and travels to the company’s headquarters and factory in Fremont, Calif., announced that he had personally moved to Austin. “If a team wins for too long, they tend to get complacent and then they don’t win the championship anymore. California has won for too long, ”Musk told the the Wall Street newspaper CEO Council Summit. “First of all, Tesla and SpaceX obviously have massive operations in California,” Mr. Musk said. “Tesla is the last auto company that still makes cars in California. SpaceX is still the last aerospace company to manufacture in California.” California was once the center of aerospace manufacturing. My businesses are the last two. This is a very important point. Some observers say the moves may be partly explained by the coronavirus pandemic and how it has changed workplaces, with employees now accustomed to contributing from home. A number of tech companies have already stated that they would allow employees to work from home permanently after the “The public health crisis is over. “Covid has basically encouraged people to work remotely and experiment with other places to live,” said Keith Rabois, a San Francisco-based venture capitalist who moved to Miami, Florida. Mr Rabois, a former executive at PayPal and LinkedIn, also said he was fed up with high California taxes, the cost of living and issues like roaming. “It became clear that there were much better places to live,” he told the the Wall Street newspaper . California also has a high personal income tax, which neither Florida nor Texas has. An entrepreneur like Mr. Musk, who is now the second richest man in the world with a personal fortune of $ 155 billion, could therefore expect to save large sums of money in taxes following his move to Texas. The absence of state income tax would, in effect, give executives in the top tax bracket a 13.3 percent pay rise when they leave California. Mr Musk also sharply criticized the Covid restrictions and workplace closures imposed by California officials in 2020, and Florida and Texas are seen as less restrictive business environments. While Silicon Valley has the highest tech average annual salary of around $ 144,800 (£ 106,000), notoriously high house prices in the region have seen it become the most expensive property market in the states. -United. The median price of homes sold in the region in November was $ 1.38 million, and housing costs in Texas are one-third of the price. Many have asked why they should struggle in one of the country’s most expensive housing markets when they can afford a lot more for their money in Texas. The hottest new landing spot for tech companies is Austin, Texas, which previously developed the nickname Silicon Hills. As of November, 39 companies, across tech and other industries, had moved to the region, already home to IT company Dell and US semiconductor giant Micro Devices. Austin subsequently had the highest net inflow of tech workers of any major US city in the year from May 2020 to April 2021. The perception that workers needed to be close to their employers’ headquarters was apparently broken. According to Linkedin data cited by the chronicle of San Francisco , the Texas capital gained 217 technicians for 10,000 users, while the Bay Area lost 80 for 10,000. Tesla has opened its 4 million square foot plant in Texas, which is expected to create 5,000 jobs, and will build the company’s Model Y and Cybertruck models. “We are talking about ourselves as human capital,” said Laura Huffman, president and CEO of the Austin Chamber of Commerce, which has 25 colleges and universities. “I also wouldn’t underestimate the importance of quality of life,” Ms. Huffman said. “There’s a lot about this community, it has a great local flavor, a great music scene, it’s an outdoor city.” That’s where people want to be. I think 2020 has taught us all that we have more choices when it comes to where we live. Tech investor Joe Lonsdale has also moved his financial firm 8VC to Austin. “It became really obvious that there are a lot of places to build across the country, not just Silicon Valley, because of the cost of living, talent and all kinds of other things, culture. and all the rest, “Mr. Lonsdale told the American statesman from Austin. The city has now recovered 97% of the jobs lost during the pandemic, according to the chamber of commerce. Unemployment fell to 4.6% from a peak of 12% in April 2020. In contrast, San Francisco has fallen behind in bringing employment back to pre-pandemic levels. But Silicon Valley advocates insist the companies are not gone for good and will continue to employ people in the region. “I haven’t left Silicon Valley; they continue to employ people here. They continue to innovate here in Silicon Valley, ”said Peter Leroe-Munoz of the technology industry advocacy organization, Silicon Valley Leadership Group. “We have a unique blend of world-class universities, sufficient venture capital, and we are attracting immigrants from all over the world at a higher rate than any other region,” he told KTVU in San Francisco. . Carl Guardino, the former chief executive of Silicon Valley Leadership Group, said losing innovators and leaders was never helpful. “Businesses go where they are needed and they stay where they are valued,” he said. “It brings some of the best intellectual talent elsewhere and often those other jobs will follow to keep them together. Either way, it’s not good for our region or our state,” Guardino said. But don’t count California yet. The state defied doom and gloom and surprised everyone by turning a projected budget deficit of $ 54 billion into a surplus of $ 75.7 billion. There is also $ 27 billion in federal aid left to spend. Even though the tech majors are expanding in Austin, they are also investing more in California – Google plans to invest $ 1 billion in California real estate and Apple has signed a huge lease to expand into Sunnyvale. The Golden State is also a leader in the venture capital needed to fund start-ups and take tech companies to the next level. According to data from research firm Pitchbook, venture capital transaction activity in the Bay Area exceeded $ 61.5 billion in 2020, and in Los Angeles it was $ 19.3 billion. . Austin’s total was only $ 2.3 billion. While the Bay Area will continue to be the center of the tech industry, other metropolitan areas have used the pandemic economic upheaval to capture some of the activity. Austin is certainly a city that seems to be leading the way.


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