Is Tech moving east?
Updated: Nov 17, 2020
With Silicon Valley getting more cramped and expensive than ever, there’s been chatter for a few years now about where tech companies are going to move next.
There was a great deal of speculation specifically around where Amazon would put its HQ2, and the benefits and drawbacks it would bring to each prospective city on its list (which included Miami, which was eventually snubbed in favor of Arlington City, VA, and New York City.)
So, why are these companies looking to move to the east coast? One answer might be for tax breaks, or even just to diversify their company. Sources suggest that tech companies are moving east as an expansion rather than leaving their west coast offices behind, and they may be looking for locations with urban appeal but prices much cheaper than where they staked their flagships. After all, if you’re expanding, why not go somewhere where it’s easier to make a profit in the end?
We are living in modern times, and with the capabilities of tech ever-changing, it makes sense for these companies to need more room in order to keep acquiring top talent; as these wunderkinder of the tech world don’t necessarily have to live in Silicon Valley anymore to snag valuable tech experience. With schools pushing STEM and computer skills in recent years, more and more young people are joining the tech wave.
So, with so much talent spread out across the country, it makes sense that these companies would want more offices in varied locations, so they can draw employees (and investors) from each region.
With west coast price tags getting ever higher, along with wanting varied locations, and bigger tax breaks, companies might be thinking, “the farther away we get from Silicon Valley, the better chance we have at finding more affordable real estate.” To find the cities on “the hotlist” so to speak, all one has to do is look for the young people.
It’s no surprise that one of Amazon’s HQ2 locations popped up as #5 on the list of “Best Places for Millennials to Live in the U.S.”. According to the list, the population of Arlington VA is 25% millennials, with a median rent under $2,000 a month. If you look at the list of “The Best Places to Live in the U.S. in 2020-2021” in general, you’ll find Seattle and Portland, but nowhere else from the “Tech Coast” on the list. Instead, you’ll find plenty of East Coast and midwestern states, as well as a few southwestern states, but nothing in California or near it.
So while young people might be abandoning Silicon Valley (and California in general) due to a cost of living that outpaced their income, they aren’t the only ones. Tech will have to continue to push eastward in order to keep attracting talent without paying a premium.
While no one knows for sure where along the East Coast the majority of companies will end up choosing, it’s safe to say that we’ll be keeping an eye out for any “new neighbors” looking to bring their business out here.