Menus Subscribe Search

Burgh Diaspora

silicon-valley

(Photo: Patrick Nouhailler/Flickr)

Bright Flight From Silicon Valley

• April 08, 2014 • 2:00 AM

(Photo: Patrick Nouhailler/Flickr)

Talented people are starting to move to places where the cost of living is more reasonable, but a town can’t just be cheap and wonderful. It also has to be connected.

The Innovation Economy is moving to where the cost of living is reasonable. The anecdotes and data points are piling up, putting the squeeze on talent-starved Silicon Valley companies. Tale of the domestic migration tape:

“It’s a kind of middle-class flight—a bright flight,” said William Frey, a demographer at the Brookings Institution, a think-tank in Washington, D.C. “People are moving to where the cost of living is reasonable.”

The shift holds some long-term implications for the economy. The clustering of workers with advanced degrees has been a driver of America’s growth, economists say. That is because skilled workers are more productive when they collaborate with similarly skilled colleagues. Consider Silicon Valley, for example, or Detroit’s Motor City in the 1950s, where innovation and industrial-scale operations drove economic development.

However, if professionals young and old fan out to more places, that could spread the nation’s talents more widely. A broader dispersal of America’s skilled workers eventually could mean more jobs and new businesses, boosting the economy’s dynamism.

Emphasis added. Detroit’s Motor City in the 1950s is today’s Silicon Valley. Then manufacturing fanned out to more places, at home and abroad. Government labs attracted the best and brightest to new knowledge hubs. Detroit slipped into the cul de sac of globalization. Now it’s Silicon Valley’s turn.

Before we stick in fork in the geography of innovation, not every place will benefit from Silicon Valley’s decline. Finding cheaper digs is easy. Attracting highly mobile talent to some forgotten corner is another story. Can Buffalo compete with Barcelona?

Another attraction Barcelona holds for fledgling tech companies, aside from its warm climate, location and cultural appeal, is its relatively low cost base for anyone looking to build a start-up in its early stages.

While high competition for engineers in Silicon Valley means that talented engineers can demand ever higher salaries, the lower wages that are paid in Barcelona to workers who want to stay in Europe and enjoy the city’s lifestyle can allow new ventures to flourish. …

… “Lots of people want to live in Barcelona, and this helps companies to have a much lower cost base than other places, but still operate out of Europe in an attractive location,” he says.

The other side of the Silicon Rust coin is the cost of talent. Start-ups can’t compete with Google or Apple for employees. Places such as Barcelona comprise the minor leagues for tech. Thus, proximity to the largest markets matters. A town can’t just be cheap and wonderful. It also has to be connected.

Barcelona has another asset going for it. It’s a tourist destination. Restaurant workers and housekeepers already have an economic rationale to be there. Furthermore, returning to the original concern about the rent being too damn high, Barcelona has a long way to go before it bubbles over with Silicon Valley-like gentrification pressures:

East Palo Alto is the last haven of low-rent housing in a region where companies like Tesla, Facebook Inc. and Google Inc. have minted at least two dozen billionaires and thousands of millionaires. Woodland Park is where Silicon Valley’s cooks, janitors and housekeepers live, often working second jobs to hang on to their homes as rents soar and wages stagnate.

The service class can’t afford to work in Silicon Valley. The foreign born usually fill that void. But California has reached peak immigration and is rapidly sliding into demographic decline. Better opportunities await elsewhere, including in the homeland. With plummeting birth rates worldwide, the absolute number of potential workers is constricted. The supply crunch is hitting Silicon Valley at both ends of the labor market. Get out while getting is good.

Jim Russell
Jim Russell is a geographer studying the relationship between migration and economic development.

More From Jim Russell

A weekly roundup of the best of Pacific Standard and PSmag.com, delivered straight to your inbox.

Recent Posts

July 30 • 4:00 PM

Still the World’s Top Military Spender

Although declining in real terms, the United States’ military budget remains substantial and a huge drain on our public resources.



July 30 • 2:04 PM

The Rise of the Nuisance Flood

Minor floods are afflicting parts of Maryland nearly 10 times more often than was the case in the 1960s.


July 30 • 2:00 PM

The (Mostly Awful) Things You Learn After Investigating Unpaid Internships for a Year

Though the intern economy remains opaque, dialogue about the role of interns in the labor force—and protections they deserve—is beginning to take shape.


July 30 • 12:00 PM

Why Coffee Shortages Won’t Change the Price of Your Frappuccino

You’re so loyal to Starbucks—and the company knows it—that your daily serving of caffeine is already marked up beyond the reach of any fluctuations in supply.



July 30 • 10:00 AM

Having Difficult Conversations With Your Children

Why it’s necessary, and how to do it.


July 30 • 8:00 AM

How to Make a Convincing Sci-Fi Movie on a Tight Budget

Coherence is a good movie, and its initial shoot cost about the same amount of money as a used Prius.


July 30 • 6:00 AM

Are You Really as Happy as You Say You Are?

Researchers find a universal positivity bias in the way we talk, tweet, and write.


July 30 • 4:00 AM

The Declining Wage Gap for Gay Men

New research finds gay men in America are rapidly catching up with straight married men in terms of wages.


July 30 • 2:00 AM

LeBron James Migration: Big Chef Seeking Small Pond

The King’s return to Cleveland is a symbol for the dramatic shift in domestic as well as international migration.


July 29 • 4:00 PM

Are Children Seeking Refuge Turning More Americans Against Undocumented Immigrants?

A look at Pew Research Center survey data collected in February and July of this year.


July 29 • 2:00 PM

Under Water: The EPA’s Ongoing Struggle to Combat Pollution

Frustration and inaction color efforts to enforce the Clean Water Act.


July 29 • 12:40 PM

America’s Streams Are Awash With Pesticides Banned in Europe

You may have never heard of clothianidin, but it’s probably in your local river.


July 29 • 12:00 PM

Mining Your Genetic Data for Profit: The Dark Side of Biobanking

One woman’s personal story raises deep questions about the stark limits of current controls in a nascent industry at the very edge of the frontier of humans and technology.


July 29 • 11:23 AM

Where Should You Go to College?


July 29 • 10:29 AM

How Textbooks Have Changed the Face of War

War is more personal, less glorious, and more hellish in modern textbooks than in the past. But there’s still room for improvement.


July 29 • 10:00 AM

The Monolingual American: Why Are Those Outside of the U.S. Encouraging It?

If you are an American trying to learn German in a large German town or city, you will mostly hear English in return, even when you give sprechen your best shot.


July 29 • 8:00 AM

The Elusive Link Between Casinos and Crime

With a study of the impact of Philadelphia’s SugarHouse Casino, a heated debate gets fresh ammunition.


July 29 • 6:00 AM

What Are the Benefits of Locking Yourself in a Tank and Floating in Room-Temperature Saltwater?

After three sessions in an isolation tank, the answer’s still not quite clear.


July 29 • 4:00 AM

Harry Potter and the Battle Against Bigotry

Kids who identify with the hero of J.K. Rowling’s popular fantasy novels hold more open-minded attitudes toward immigrants and gays.


July 29 • 2:00 AM

Geographic Scale and Talent Migration: Washington, D.C.’s New Silver Line

Around the country, suburbs are fighting with the urban core over jobs and employees.


July 28 • 4:00 PM

Border Fences Make Unequal Neighbors and Enforce Social Inequality

What would it look like if you combined Israel, the West Bank, and Gaza, demographically speaking? What about the United States and Guatemala?


July 28 • 2:00 PM

Are Patient Privacy Laws Being Misused to Protect Medical Centers?

A 1996 law known as HIPAA has been cited to scold a mom taking a picture of her son in a hospital, to keep information away from police investigating a possible rape at a nursing home, and to threaten VA whistleblowers.


July 28 • 12:00 PM

Does Internet Addiction Excuse the Death of an Infant?

In Love Child, documentary filmmaker Valerie Veatch explores how virtual worlds encourage us to erase the boundary between digital and real, no matter the consequences.


Follow us


Subscribe Now

The Rise of the Nuisance Flood

Minor floods are afflicting parts of Maryland nearly 10 times more often than was the case in the 1960s.

America’s Streams Are Awash With Pesticides Banned in Europe

You may have never heard of clothianidin, but it's probably in your local river.

How Textbooks Have Changed the Face of War

War is more personal, less glorious, and more hellish in modern textbooks than in the past. But there’s still room for improvement.

NASA Could Build Entire Spacecrafts in Space Using 3-D Printers

This year NASA will experiment with 3-D printing small objects in space. That could mark the beginning of a gravity-free manufacturing revolution.

The Most Popular Ways to Share Good and Bad Personal News

Researchers rank the popularity of all of the different methods we have for telling people about our lives, from Facebook to face-to-face.

The Big One

One in two full-time American fast-food workers' families are enrolled in public assistance programs, at a cost of $7 billion per year. July/August 2014

Copyright © 2014 by Pacific Standard and The Miller-McCune Center for Research, Media, and Public Policy. All Rights Reserved.