The Next Silicon Valley is HERE!

​As the economy continues to boom we’ve seen several geographical areas around the country over the last 5-6 years show signs of impressive growth and future promise.  Areas like Boston, the DC, Virginia, Maryland area known as ‘Tech-Corridor’ and Southern California are quickly giving the traditional tech depots like Silicon Valley and Seattle a run for their money.  With home prices in the Bay Area and Seattle eclipsing obnoxiously high levels businesses are flocking to other areas and their doing so by the droves!  According to Inc Magazines Marc Emmer (a Bay Area local) upwards of 46% of Bay Area residents plan to leave “in the next few years”.

So where are they going?

Before we can answer that question we need to understand the three major fundamentals for what makes a good tech and business ecosystem: universities, money and talent.
Universities drive education which in turn drives innovation, money (VCs, corporations, private interests, etc.) provide the catalyst for development, while having an enriched talent pool ensures the jobs of today will remain input for tomorrow.

These three things combine are the building blocks for a strong and lasting ecosystem.  When each of these fundamentals coexists these geographical areas turn into a ‘build it and they will come’ field of dreams scenario.

So, where are businesses moving to?  Southern California!

SoCal may have been slow to catch on however the area including Los Angeles, Orange County and San Diego is quickly showing why it shouldn’t be ignored as it turns into a tech and business force to be reckoned with.  Annlee Ellingson of LA Biz wrote an article based on a Boston Consulting Group tech report which outlines some of the reasons why SoCal is the next area on the block to look out for:

• It’s home to several major industries which have a top 3 foothold across the country: aerospace, medical technologies and business services.
• While the cost of housing in SoCal is relatively high, the cost of living in SoCal can be 20+% cheaper than the Bay Area, Seattle and DC, mostly due to lower housing prices comparatively.
• SoCal produces more tech PhDs per year than any other region in the country.
• Caltech generates more patents than any university in the U.S. and UCLA more startups.
• 54 percent of CalTech’s 2017 alumni chose to stay in SoCal versus 31 percent of grads from 2012.
• Recent high-profile tech leaders have relocated to SoCal including Meg Whitman (eBay, HP) and Peter Thiel (PayPal, Founders Fund, Thiel Capital).
• SpaceX, Snap Inc. and Cornerstone OnDemand are among the heavy hitters calling Southern California home.
• Tech giants such as Google, Yahoo! and Facebook have expanded their footprint in Silicon Beach, increasing the density of tech employees and engineers in the area.
• Santa Monica and West Hollywood already have an “entrepreneurial density” on par with many Silicon Valley cities, including Palo Alto and Menlo Park.

 
Key Take Away:  the three major fundamentals for what makes a good tech and business ecosystem: universities, money and talent.

Action Item:  One of the best things you can do to determine where the best place to be located is to review the labor pools in that area to determine if your place of business will be housed in an area that will provide you with good access to talent.  
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