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How the Pandemic Disrupts Silicon Valley’s Position on Tech Jobs

Silicon Valley, giving way to US Silicon

In a feedback loop that could transform US economic geography, millions of Americans are on the move and companies are following them — technology companies in particular. In turn, the emigration of companies and investment is attracting more workers to places where there have been frequent talent wars in the past. This is a reversal of a decadelong trend in the opposite direction. It could have major implications for which areas of the United States will prosper and for income inequality, and therefore also for politics, innovation, and competitiveness. United States as a whole.

For decades, the success of America’s so-called “superstar cities” has been driven by a tendency for the nation’s most productive workers and businesses to cluster in a few places like the Valley of the Sea. Silicon Valley. Now, the economic equivalent of a glance — the two-year span of the pandemic — has begun to change.

Until recently, evidence for this change was mostly anecdotal and preliminary. But a new study has yielded astonishing statistical results that document the scale and speed of this change in the way people whose jobs can be done remotely work and live:

Nearly 5 million Americans say they have moved since 2020 — and another 18.9 million are planning to do so — as a result of telecommuting, according to a survey released last week by Upwork.,

a platform that connects employers and freelancers.

In the US, nearly a quarter of all full working days will be at home after the pandemic is over, as opposed to 5% before the pandemic, according to survey data released in December collected by economists at Stanford University, the University of Chicago and the Instituto Tecnológico Autónomo de México.

A paper from researchers at the University of Oxford, the OECD Economics Department and job posting website, shows that as of December 2021, the proportion of job listings in 20 countries refers to the ability to work. telemedicine has more than tripled from before the pandemic, from 2.5% to 8.5%. The same researchers also tracked how such postings change as pandemic restrictions are strengthened and circulated, and found evidence that these numbers are unlikely to change once pandemic restrictions are in place. Pandemic restrictions are over.

Yet another paper published last week, from economists at Stanford, MIT Sloan, Princeton University and others, makes the case that the US government has under-charged the rate. Americans work remotely by 33 percentage points, and about half of all US workers currently. do their jobs remotely at least some of the time.

Finally, last week’s study from the Brookings Institution provides new evidence that the rise of jobs from anywhere as both a technological and cultural phenomenon is driving the massive migration of capital, firms, and companies. and workers. They’re headed to a host of cities that for decades have seen their best and brightest drained to places like the San Francisco Bay Area, New York City and Seattle. These new “rising star” cities include Atlanta, Dallas, Denver, Kansas City and St. Louis, according to Brookings.

Tech Job Market: Rising Star vs Superstar

While job postings in many ‘superstar’ tech hubs have declined since pre-pandemic, most ‘rising star’ cities have increased.

Tech job postings, changes in 2021 compared to 2019, according to some major city areas

Post a tech job in RISING STAR metro area and SUPER STAR metro area, 2021 changes compared to the same month of 2019

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Post a tech job in RISING STAR metro area and SUPER STAR metro area, 2021 changes compared to the same month of 2019

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Post a tech job in RISING STAR metro area and SUPER STAR metro area, 2021 changes compared to the same month of 2019

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Post a tech job in RISING STAR metro area and SUPER STAR metro area, 2021 changes compared to the same month of 2019

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Post a tech job in RISING STAR metro area and SUPER STAR metro area, 2021 changes compared to the same month of 2019

In terms of companies’ willingness to hire remote workers, what we’re seeing is a dramatic effect. Tara Sinclair, a professor at George Washington University who conducted the 20-country survey as a senior fellow at Indeed.

“We know remote work is possible and we know job seekers want it, but it’s the pandemic that has made it a reality every day, and once it happens, it’s stuck. ,” She added.

The rise in remote work caused by the pandemic coincides with another, multi-year, phenomenon, according to data from Brookings: a decade or more of increased investment in companies, according to data from Brookings. Technology companies are concentrated in cities outside the regions that typically consume most of the investment and capacity.

The result of the convergence of these two consolidating trends is that by 2021, six of the nine rising star cities will experience growth in tech job postings, one proxy for future jobs. in those cities. During the same period, postings in Boston, the Bay Area, New York and Los Angeles all fell, according to data from Brookings.

Local commentators and advocates have suggested for decades, perhaps dreamily, that this sort of thing could happen. From “Silicon Prairie” to “Philicon Valley,” it has been a slow build to its current inflection point, and some tech hubs in the region are growing faster than others.

Margaret O’Mara, professor of history at the University of Washington and author of “The Rule,” a history of Silicon Valley, said: The growth of America’s existing superstar tech hubs is the most obvious example of that — after all, the term “Silicon Valley” was coined half a century ago.

“One of the secrets of Silicon Valley is timing,” says Dr. O’Mara. “No mayor or county executive wants to hear that answer, which is why I don’t have a multi-million dollar economic development consulting career.”

Mark Muro, who conducts research for Brookings, says the ascent of these new tech hubs is unlikely to be the end of the world for America’s superstar cities or tech companies and public employees. technology there. But it looks like this is the first full-year data in an ongoing shift. Data for 2022 and beyond will show a deeper shift in employment than in what were previously tech-dominated cities, he added, especially as some public companies Technologies, such as Oracle and Tesla, move workers as a result of moving their headquarters out of the Bay Area.

Following the rise of remote work and the growth of more tech hubs, a third fundamental trend could also be driving this geographic shift: the maturation of certain technologies that in decades that have underpinned Silicon Valley and other hubs, especially its own microchip and internet.

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Fetch CEO Adam Steinberg founded his truck rental startup in Atlanta to take advantage of lower costs and other benefits.


Photo:

Ariel Guan

“Silicon” in Silicon Valley is, after all, a reference to what microchips are made of. The first commercial integrated circuit was manufactured by Fairchild Semiconductor, of Santa Clara, California, in 1961. The PC revolution and then the internet gave rise to today’s technology giants, mostly in and around around the Bay Area and Seattle.

But the outsourcing of electronics manufacturing and the rise of cloud services have made it much easier to build a tech startup anywhere. The dispersion of the knowledge needed to build a company and the dramatic drop in the cost of launching a startup in the tech industry, are both prominent signs of what historians say. called a “mature” set of technologies. This is not to say that these technologies are being made more and more advanced, just that the rate of disruption has slowed down enough that companies that were built far away from where they were first invented can now participate. their development.

Some historians and economists have declared our present era the “fourth industrial revolution”. According to Dr. O’Mara, if that’s the case, it could, in a way, be following the path of past industrial revolutions. From Britain’s 18th-century Industrial Revolution – which quickly became America’s, after the expertise and necessary technology were passed across the Atlantic – to the rise of Detroit, history is rife with technology. started in one place, making the people living there incredibly wealthy, and eventually became a global phenomenon, leading to specialized centers of knowledge and production around the world.

While it’s impossible to replicate the exact formula that worked for the Bay Area and build the “next Silicon Valley,” the region’s tech hubs can prosper by finding niches of their own. them, she added.

‘One of the secrets of Silicon Valley is timing. No mayor or county executive wants to hear that answer, which is why I don’t have a multi-million dollar economic development consulting career. ‘


– Margaret O’Mara

Atlanta is a prime example of these trends. Although it was largely abandoned during the early decades of the rise of PCs and the internet, the presence of corporate headquarters and the Georgia Institute of Technology meant that it had both demand for its products. of enterprise technology startups and the talent to build them.

America’s ninth-largest metro area has quietly become an assembly line for tech unicorns, with five of their startups topping a $1 billion valuation in 2021 alone. including Calendly, which simplifies the process of scheduling meetings, and Stord, which helps businesses with fulfillment and logistics. The result of successive waves of exits from startups, followed by mentoring and reinvestment from startup founders, plus the proximity of potential customers in the headquarters. Home to Fortune 500 companies like Home Depot and United Parcel Service, the city has built all the ingredients it needs to create tech startups.

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Adam Steinberg, an Atlanta-area serial entrepreneur and CEO of Fetch, a startup that allows individuals and small businesses to rent vans and utility vans by the hour.

Mr. Steinberg went through the Y Combinator accelerator program, where he was advised that he would have better access to capital and talent if he moved his company to the Bay Area. But other variables, such as his existing professional network in Atlanta, proximity to family and friends, and the fact that he can sustain his company longer for the same amount of money. investment because of Atlanta’s lower costs, kept him in that city.

He added that the pandemic has made it easier to find talent because with the rise of a remote work culture in the tech industry, he can hire workers anywhere in the world.

Additionally, he feels that for a truck rental company, it is important to start in a city that is typical, in layout and demographics, of most of America: “We calculated that if we could go to Atlanta, we could go anywhere.”

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