In the original Tale of Four Cities post one point of discussion was: “Why on earth would you want to locate and operate a company in the outrageously expensive environs of San Francisco where none of your employees can afford to live?”
Apparently lots of people are asking that question. According to Indeed.com, “Tech workers are increasingly looking to leave Silicon Valley”, a trend “highest among people ages 31 to 40, suggesting that people are leaving to find better opportunities elsewhere or to settle down in more affordable areas where they can improve their quality of life.” One chart from the article shows the Share of outbound tech job searches from within the Bay Area among this demographic group.
Of course lots of factors are likely at work behind these numbers, and the trend could as easily reverse. The data do continue to support the thesis however that successful innovation ecosystems need to balance the needs of all stakeholder groups (including startup employees), and that these factors can get out of whack.
Certainly Silicon Valley will continue to be the primary hub of global venture capital for the foreseeable future. But, writing in Forbes, Brian Solomon reported last year on the 2015 ranking of accelerator programs by researchers Yael Hochberg and Susan Cohen, which for the first time left off the archetypal accelerator, Y-Combinator. Hochberg and Cohen concluded that Y-combinator has evolved into a hands off seed fund, and is “cashing in on the name it made for itself, [by] raising a multi-billion dollar late stage fund to take advantage of their model that selects great entrepreneurs rather than mold them.” [italics added]
Innovation occurs in many many places, including Silicon Valley, but if these nascent trends continue we may wake up one day to find that Silicon Valley has become primarily an investment center rather than an innovation center.