Tyranny of big tech4/29/2023 “I’m skeptical that COVID-induced changes are driving an acceleration in an exodus of tech firms,” he says. Tech companies have been moving some operations away from their traditional headquarter locations or expanding elsewhere, Moretti says, but that was happening long before COVID. “High-tech clusters tend to be located in cities with high labor and real estate costs - cities like San Francisco, Boston, or Seattle - rather than in cities where costs are low,” Moretti observes, possibly because for creative intellectuals, intellectual productivity outweighs those costs. The allure of living and working in such a cluster outweighs the downsides of high living costs, taxes and congestion. There’s a notable cross-pollination effect: Inventors who move to a city with a large cluster of inventors in the same field experience “a sizable increase in the number and quality of patents produced,” according to UC Berkeley economist Enrico Moretti. That’s how Boston and San Diego became biotech hubs and Silicon Valley and San Francisco centers of inventive approaches to computer hardware and software. As Nicholas Bloom of Stanford and colleagues pointed out in 2020, elite academic institutions attract highly skilled innovators and spin off their learning into new technologies and new industries their presence tends to attract others like them. The value of concentrated ecosystems in nurturing innovation has been document for decades. Early in the period we saw some exiting, especially from the Bay Area, but it turned out that much of it was within California, rather than to Kansas.” “That’s not to say there won’t be some movement. “The California metropolises really do retain their irreplaceable depth and strength,” Muro says. Business Column: California isn’t ‘hemorrhaging’ people, but there are reasons for concernĬalifornia remains a powerhouse, but demographic and economic data do raise some worries.
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