Don’t all industries do this? I mean auto clustered in Detroit, TV & Film largely clustered in LA, big oil and gas in Houston, big finance is NYC and much of the northeast. Industries that grow in a spot just attract others to the same area.
Alfred Olumba finance is not that clustered. There are lots of satellites abound. Hardware is physical so have to near each other. Unless we develop transporters (Star Trek). Software however can literally be transported or teleported far away
I used to live in Seattle and surrounding area. Don’t think that big tech companies coming to your town will make your life easier. It gets harder as your rent and home price increases and everything becomes more expensive.
@@msergio0293 I'm a HVAC tech in the bay area I live in the central valley so about 4hrs everyday commuting, rent is rising....But yall get heart attacks when we present you the repair bill or replacement lol....and it's our fault?
grandmother lives in san Fransisco her house is worth a fortune now compared to when her and my grandad first bought it years agoand the crazy thing is that it just keeps going up in price
@@Chris-pq3wp The benefit is there, but companies can operate without. For example, just last week, I taught my coworker in-person how to search our codebase faster, cause I saw him doing it in an inefficient way.
It's because clustering makes it easier to recruit talent. Lets you want to start a new ecommerce company. Where are you going to find great software engineers to help build your website. Seattle or Wichita? San Francisco or Lexington? The main reason Jeff Bezos started Amazon in Seattle was so he could hire Microsoft engineers.
yeah theres a ted video of that you can see! it's basically about competition and the share of customers edit: it's here ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-jILgxeNBK_8.html
Agglomeration benefits are something WeWork should be utilizing to deliver on their (currently vapor) collaborative ecosystem promises. Up and coming startups would absolutely pay a premium to be in the same building as a Google or Amazon.
Actually its the opposite. Just take google for example, they buys many small to medium companies. RU-vid, Android, and DeepMind to name a few, were separate companies before Google/Alphabet bought them. All the Big Tech Companies do the same.
Michael Iverson u both are a little tight little company mock bigger company’s because it’s tested and gives back good returns but they buy. Out anyone who had done a better job then they would have so they buy them out of there business
This happening in the uk as well not just tech but finance companies. The only jobs in cities close to big cities is amenities like sores for people who live but work in the big city. However unlike the uk american cities have more control over tax and income whereas in the uk our cities especially he big ones are getting funding costs t the largest even though we have the highest inequality due to high paying jobs excluding people from the housing market
They ruin cities that size.. trust me. A place like ny is big enough to handle it. Amazon destroyed Seattle. Nothing is affordable and there is rows of former residents in tents. They pay no tax,
This was written 5 months ago. In the meanwhile, thousands of folks from Manhattan are working remotely and went various places in order to socially-distance. Hope this "de-agglomeration" trend continues. Imagine having people with 200k salaries in neighborhoods where the income is only 100k - that would bring a lot of local tax revenue to other cities besides just the big 4-5
This is false, NYC is an employee market, meaning their are more jobs openings in NYC that employees to fill them. Despite NYC large population. This is why NYC has the highest wages in the nation across the majority of job fields.
@@Beachdudeca that's because those salary surveys are by region. San Jose /San Francisco and it's suburbs make more. But NYC only makes the same if not higher. You have to account that the neighboring areas around NYC don't pay so well in tech
Exactly. Like you could actually find workers to build google or facebook in Iowa...oh sure you might find 100 such people in the state, but please when you need 10's of thousands of tech savy people you don't move to Iowa. DUH.
No he didn't. He implied silicon valley has just been oversaturated with tech jobs so its hard to find good people because they all already have jobs in tech.
As much as we think telecommuting and remote work is a thing (and arguably it can be for some people/some companies), on average there's still a large onus on physical collaboration in the workplace. Therefore, as a company, you still want to employ people who can work at your physical office location and that means clustering your office with others of a same industry. Clustering means you'll have a larger pool of talent flocking to the area, you can poach talent from other competitors and generally speaking you will also have other companies providing goods/services that cater to your industry more easily. It certainly isn't impossible for tech companies to scatter into smaller towns; as many have echoed, of all the industries they're probably among the most mobile, but it might be more difficult/a pain for them to do so. The large players can move wherever they want sure, but the smaller startups (that eventually grow into larger companies) will make their lives easier if they are in cities nearer to the big players.
Here in Detroit, we have a fast growing tech scene centered around the auto industry. Tech isn't just apps that sell your personal data, and there are tech hubs outside of Amazon/Google turf
Paused at 3 seconds in. The answer is easy. *Tax subsidies and infrastructure* are usually the top considerations for operations site selection. Do I need to watch the WSJ piece?
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Out of college students need something to buildup their experience and big tech companies are a good way to increase knowledge as they are always involved with upcoming technology which you will hardly see in small companies.
@@aatishkamble3108 Exactly. After a few years in the industry you can get decent remote jobs and live where ever, but getting started, if you want quality work with good pay, then you are moving to a tech hub.
This is not entirely true because of the following reasons. 1) EPIC - The largest medical record software company has their headquarters in Verona Wisconsin. 2) During this pandemic, tech workers are working from home and they're realizing that they can do this from anywhere. They don't have to be in San Francisco. That's why SF rent prices are finally dropping.
Great point also these Tech Comapnies are leaving these cities all together or putting new facilities elsewhere. Thats why you see States like Virigina, Texas and North Carolina getting a growing tech presence.
I believe it depends specifically on what aspects of tech you work on. Companies like Twitter have made working remotely a permanent option so we could see many leave cities but that'll only be an option if your job just requires a laptop/phone like coders or customer service. If you work on physical computer chips or other things that require special tools or you work on super top-secret technologies you most likely will still need to work in one of the hub cities. Not to mention, start-ups will still most likely need these types of environments both for the concentration of talent as well as other resources that can help them grow.
Now these Tech companies are leaving these cities. It clearly wasn't sustainable. Now you see more Tech companies going to smaller large cities like Austin, Boston, Denver.
As someone who moved from the bay area to Michigan, there's a reason people want to live in Northern California even though it's stupid expensive. It's a really nice place to live.
The exact opposite happens in London, all back-office software development centres for major companies/banks are outside of London (JPM, Barclays and NationWide have most of their devs in Bournemouth) while something like 20% of their dev workforce is in Canary Wharf, Victoria Embankment, City of London.
I think it's misguided to blame tech companies as the reason for housing unnafordability/high cost of living. The bottom line is that NYC, SF and Seattle are vibrant urban places that are highly desirable to live in. Therefore they are more expensive. Maybe the reason tech companies are moving there is for the same reason anyone else does. They're exciting, culturallly rich and full of human capital. Also, think of the demographics of most tech people; young, educated, ethnically and culturally diverse. Where do you think most of these people would want to be? I think reports like this get it completely backwards. Big tech isn't the reason cities are expensive and housing is going up. The desirability of big cities, and corresponding demand for them, drives up the cost of living. Big tech moving in is just a byproduct of this.
They do - Seattle/redmond in the 90s, silicon valley in the 90s as well, Israel as well for silicon designs, Shenzen for manufacturing. Tech companies hire where education is high and where trade is easy, Austin has that to an extent and has an extreme tech growth over the last few decades. You don't identify the areas I've mentioned as new and upstarty because you don't associate the areas developing until they have already grown so large they become a massive city and society in themselves.
Phoenix metro area is another place tech companies and other major businesses are starting to flock to. Waymo, State Farm, Uber, Ring, GoDaddy, Keap, PayPal, Amazon, Intel. All these companies have offices here, or their HQ's are here. Even the satellite and defense industry has a huge presence there, Boeing, Northrop Grumman, Iridium, General Dynamics, BAE. I'm surprised more tech companies aren't flocking there at a faster rate because land is cheap, economy is strong, housing is much more affordable, and Phoenix has a huge international airport. Not to mention weather is great, except the summer heat.
Yeah ,come over here, work for me, pay high prices for commodities, pay high taxes(30%) while we evade tax using legal loopholes which are fine as long as lawyers and lobbyists are getting commission. You have been warned
This was posted January 2020. The world has changed since the outbreak of COVID. HI-tech companies are de-clustering; and going online, so are in education, finance, and even porn industry.
What isn't mentioned is that some other cities that are forming clusters of industries as we speak and attracting nets of thousands of people a year have still managed to keep their housing prices low, because the supply has kept up with the growing population. Most prominent of those big cities is Houston, TX, which, in my view, is a success story when it comes to housing policy and affordability. Cost of housing is still around $190K, including in areas not far from the urban and high-density clusters. *Development-friendly public policy matters.*
Everyday world is getting smaller with internet and tech. Digital system provide more flexibility working environment. So saying the reason why all tech company choose San Francisco and New York as they office because of better talent and workers productivity is questionable. Rezoning and agglomeration corporation in same postcode will widening the wealth gap between the city, industry and increase the urban migration. Instead of care about corporate interest, why don't govt invest more in social planning around this area - housing inflation, road infrastructure, affordable childcare etc?
"So saying the reason why all tech company choose San Francisco and New York as they office because of better talent and workers productivity is questionable. " As someone who spends a lot of time looking at resumes from all over I assure you the vast majority of top candidates are coming from tech hubs. Yep there are some good engineers in the heart land..and they end up in the tech hubs eventually if they want good work. After a few years in the industry it's easy enough to find remote work and move where you want, but if you want to break into the industry you would do well to move where the jobs are.
Companies like Apple are moving to Austin where wages and rent is cheaper. But there’s always the chance that the talent won’t relocate. If you get laid off in the Bay Area there are many more jobs than a smaller town or hub. And the company ends up spending so much time and money on travel.
The median house price in NYC is only above 530 grands,so that is not so affordable,are u kidding me?! I'm from a small city of roughly 250,000 in China and the median house price in my city stands around 250 grands(suppose 1 USD=7 CNY).My family has two houses here.However,I am of the middle layer in my society.That means,half of our population can afford a house in NYC,please tell me,Mr. RU-vidr,that you aren't kidding me
Fortunately, in the US, but also in countries like Germany and China, there at least are multiple agglomerations around the country, each with different strengths and weakness. Compare this to the situation in the UK or France, where anybody who is anybody in any field has to live in London or Paris.
The US us the strangest place on earth... I’m just curious on what the end goal is? What’s the vision for the country? It certainly isn’t focused on creating a quality of life for MAN and NATURE to thrive and grow and create something that is real... it seems to be focused on creating technology that will bring humanity to total annihilation...
Not just in the US. In other countries its even worse. For example in the UK no other cities can match London's competitiveness. Not even close. They dont have their own San Francisco or Seattle or LA. Birmingham and Manchester are really lower class compared to London. At least the US has much more choice on where to work as an IT grad
if you have all of the right education/experience in the USA you can basically move to any medium to a major city that has companies that can support your salary, also like to say you want to work for a medical device company's you have options where you can live for medical device company's you can live in Minneapolis MN or Boston MA and still get paid a really good salary.
@@gisar.6539 And I have to say. In my country Malaysia. Its even worst than the UK. Everybody has to work in Kuala Lumpur if they have ambitions. You have no other options.
WOW. This video came out 6 months ago. How irrelevant is it now. The tech industry is moving towards remote working. Google and Facebook might never fully come back to the office or clustering. People will hire from anywhere in the country and the need to flock to new York for a better education might die down altogether
What's so "unfortunate" about that? It has always been like that ever since. And then when recession cuts all the jobs, then the people still complain! never ending complaining! people have no contentment.
they don't always. like you SHOULD know Microsoft specifically chose to relocate to Redmond Because it was a cheap place to do business: inexpensive real estate, low taxes etc. But hey convince yourself everyone wants to be highly taxed! No $kin off my no$e.
