Good morning! It seems like every few years tech entrepreneurs decide they’re fed up with San Francisco’s high cost of living and “flee” in “droves” in search of greener — and cheaper — pastures. But once again, the data tells a different story. I’m Caitlin McGarry, and for some reason I feel compelled to admit that I can’t stop listening to Grimes.
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Searching for America’s next great tech hub
Austin. Miami. Denver. Each has cultivated a
thriving tech scene
and plenty of buzz. Miami has become a destination for the crypto community, and Austin has Elon Musk (and, obviously, Grimes). But new reports indicate that the
tech hubs of yore
still dominate the industry.
It’s unlikely that any city will ever overtake the Bay Area. When it comes to the concentration of technology investment, employment and innovation, Silicon Valley has everyone beat.
- Between 2015 and 2019 , the areas surrounding San Francisco and San Jose accounted for 20% of new technology jobs in the U.S. Seattle added 7% of those new jobs. The pandemic changed the calculus a bit, but not much. Tech employment growth in San Francisco and Seattle slowed to 2.9% from 4.9% in 2020, and in San Jose, growth plummeted from 5.3% to 1.9%. But job growth in so-called rising star cities like Miami and Denver also slowed.
- According to Bloomberg data , San Francisco and San Jose also rake in the lion’s share of venture capital investment, capturing 36% of overall investment in the U.S. last year. For a quick comparison, in 2021 San Francisco attracted $90 billion in VC funding; Austin brought in $5 billion and Miami $4.6 billion.
- As this March 8 Brookings Institution report (worth reading in full) notes: “The pandemic years have raised the promise of tech decentralization through remote work and new siting decisions. However, the continued dominance of tech’s long-standing hubs ensures that the ‘rise of the rest’ won’t happen easily, or by itself. The nation, states, and regions themselves will need to help it along.”
We’ve seen the hype around the search for the next Silicon Valley fizzle before. I covered downtown Las Vegas for the Las Vegas Review-Journal in 2012 when Tony Hsieh, the late CEO of Zappos, committed $350 million to turning downtown Las Vegas into a thriving tech startup scene.
- He relocated the company’s headquarters to downtown and launched the Downtown Project, which kickstarted a tiny tech hub in a spot that used to have seedy motels and a few cool bars. But after an initial blitz of investment and hype, the startup scene floundered.
- And it’s easy to see why: Las Vegas offers cheap housing and no state income tax, but it lacks nearby technology-focused universities and research institutions. That makes it difficult to attract talent. The absence of venture capital was also an issue. It turned out that remaking Sin City, which is already controlled by the hospitality and gaming industries, into a tech hub in the desert just wasn’t an easy sell.
So which city will be the next “tech hub”? By one measure, it might be in the Pacific Northwest. Seattle is the destination of choice for college kids post-graduation, according to a new Axios poll . New York, Los Angeles, Denver and Boston round out the list.
- San Francisco wasn’t even in the Top 5, which indicates that what was once a north star for young idealistic tech workers has lost some of its appeal.
- Seattle’s technology jobs, cool culture and moderate weather make it appealing for a new generation of workers.
But still, even among the college students looking to move to Seattle after college, only 12% want to find careers in tech. The gravitational pull of the Bay Area for tech workers remains unmatched.
Housekeeping
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People are talking
Eric Schmidt said the war will help tech understand the importance of national security:
- “We need a strong national security in our country, and the tech industry needs to support it.”
DocuSign's Dan Springer said he didn't realize how much a waning pandemic would impact sales:
- “We always believed that COVID as a dramatic tailwind would come to an end. The place that we missed is how fast we would see that drop.”
Making moves
Robert Iger is a new board member for Genies, which makes avatars for celebrities for the metaverse.
Arm is laying off about 1,000 people . The company is regrouping after the Nvidia deal fell apart, and before its planned IPO.
Frank Klein is Rivian’s new COO . Klein was the head of carmaking at Magna International.
La’Naia J. Jones joined the CIA as CIO. Jones most recently oversaw IT investments and acquisitions as the National Security Agency’s deputy CIO.
Sarah Cannon is joining Coatue as a general partner. Cannon was previously at Index Ventures.
P.J. Linarducci joined Thumbtack as chief product officer. Linarducci spent nearly a decade at Meta and worked at PayPal before that.
In other news
The people spoke, Twitter listened. Users can make the feed default to chronological order after people complained about its algorithmic “Home” feed.
The future of transportation is getting more expensive. Tesla raised its prices thanks to supply chain issues, and Lyft joined Uber in adding fuel surcharges to cope with spiking gas prices.
iOS 15.4 will let you unlock your phone with Face ID while wearing a mask, even if you don’t own an Apple Watch. The update also includes improved safety warnings for AirTags, a gender-neutral voice for Siri and some new emoji.
HBO Max and Discovery+ are
becoming one big streaming service
.
Until that happens, there will be a single sign-on process for both platforms.
Ukraine is reportedly using Clearview AI’s facial recognition tech to help vet people of interest.
Shenzhen’s lockdown is affecting several large tech companies. Foxconn was forced to stop production at a couple of sites, and Huawei, Tencent and Oppo are headquartered in the city.
The EU won’t cut out crypto . The European Parliament voted to move a crypto-assets bill known as MiCA forward without banning proof-of-work-based crypto.
Foxconn
wants to build
a factory in Saudi Arabia.
The $9 billion facility would make microchips, EV components and more.
CDs are making a comeback
Dust off your Sony Discman: CD sales increased last year for the first time since 2004, according to a
report
from the Recording Industry Association of America.
The resurgence of CDs isn’t surprising, since vinyl sales have also grown over the past decade and the overall collectables market has taken off .
But why now? Maybe CDs are like NFTs: There’s something to owning something outright. And with CDs, you can actually hold them in your hands! But even better: CD collections are significantly less expensive to maintain than an NFT collection.
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From fraudsters to hackers, the web has its share of bad actors. Aura’s all-in-one digital protection keeps them at bay, so you can do what you love to do online—safely. Sign up for your free trial to experience how our powerful security fits seamlessly into your life.
Thoughts, questions, tips? Send them to sourcecode@protocol.com, or our tips line, tips@protocol.com. Enjoy your day, see you tomorrow.