For those in tech, the allure of what most consider the tech capital of the country — Silicon Valley — is real.
But according to real estate website Redfin, last year saw more people move out of San Francisco than any other city in the United States. When a group of San Francisco venture capitalists went on a three-day tour through the Midwest to find promising startups, they quickly realized why. Once outside the bay area, home prices dropped precipitously, and even old manufacturing towns had amenities such as upscale shopping and farm-to-table eateries.
Still, it’s inarguable that Silicon Valley has seen its share of success in the field, so it makes sense that many such cities hope to attract startups and investors by billing themselves as the “next Silicon Valley,” giving themselves nicknames such as the Silicon Prairie, in the case of the Midwest, or the Silicon Desert in Arizona. Although imitation is the sincerest form of flattery, the reality, of course, is that these cities are sabotaging their own cause.
An Uphill Battle
It makes sense that cities around the country would look to Silicon Valley with envy, considering there’s record job growth, record wealth — seemingly record everything when it comes to recent decades in the tech field. City leaders everywhere might do anything to try to replicate that formula and bring that amount of growth and opportunity to their own area, even if it involves a silly nickname.
The problem is, it’s impossible to become the “next Silicon Valley,” and history explains why. The financial industry has been clustered into a tiny area in New York City for more than a hundred years, and it’s only become more prominent in that time. The film industry has been in Los Angeles since the early 1900s, and that area will remain the hub of the industry indefinitely.
Companies choose to overlook real estate prices and salary demands in Silicon Valley because of the strong contingent of talent. As a result, talent moves to the area, and more companies follow, bringing further growth and innovation to a region already ripe with it. This cycle wasn’t built in a day, and it may never again be replicated at the same level — in part because of a key ingredient: investor dollars.
According to a report from Wealth-X, from 2016 to 2017, there was a 15 percent increase in the number of billionaires on the planet. Of the 2,754 individuals whose net worth resembles a phone number, 74 of them call Silicon Valley home. It now has the third-highest concentration of billionaires on the planet, behind only New York (with 103) and Hong Kong (with 93).
A Different Approach
Instead of trying to blend in with Silicon Valley, leaders need to make sure their cities stand out. Here’s a handful of things to consider along the way:
1. Don’t attract talent; create it yourself.
Companies and regions always want to talk about attracting talent — that is, bringing it to them. But there’s a strong chance that plenty of talent and potential is already in your area; sometimes it’s simply a matter of developing individuals’ skills.
Underemployment exists: While the unemployment rate dropped to 3.9 percent in April of 2018 as 236,000 people left the labor pool, underemployment remains at 8.2 percent. That just means cities need to invest the time and resources into training, cross-training, or retraining talent to craft it into what the market needs.
Take a hard look at what opportunities exist in your area. Do many companies offer apprenticeship programs for people who may have great potential but not a lot of qualifying credentials? Are there government-funded job training programs with proven track records of success? Making sure initiatives like these exist is key to developing homegrown talent.
2. Know what makes your city, specifically, strong.
When you’re on the job hunt, you become acutely aware of your strengths in order to best market them. The same goes for when you want to market your city to talent and the economy overall — you have to know what separates you from others in the best way.
In Detroit, for instance, progress in the self-driving arena has outpaced Silicon Valley, reclaiming its dormant reign of the automotive market. Ford and General Motors are behind the wheel of this growth, each making billion-dollar investments to acquire the right talent. Ford purchased Argo AI for $1 billion in an effort to have self-driving cars in the next three years — Detroit has its ability to leverage that and become not the Silicon Valley of the Great Lakes, but its own entity.
Going further, Phoenix has a low cost of living, low tax rate, and “community support” for small businesses and startups. Whenever possible, local leaders center messaging designed to attract talent to the area around these perks. A partnership between Alphabet’s Waymo and rental company Avis will bring a fleet of almost 600 self-driving Chrysler minivans to Phoenix, and residents will be the first members of the public to experience the cars.
Point being: There’s undoubtedly value in what your city contributes to the economy as a whole — identify it and take every chance to shout about it.
3. Stay ahead of the tech curve.
There’s no sense in making your entire strategy a game of keeping up with the Joneses, but you still have to keep a close pulse on the tech field and what innovations it’s bringing to every other corner of the economy. Look again at what makes your city stand out, and prioritize learning about what new tech tools and concepts people are putting out.
Machine learning, for instance, is transforming many industries, and the measurable improvements it brings to healthcare is a perfect example. As technology is integrated into the healthcare industry, cities should put resources in place that attract these and other companies to lay the groundwork for becoming a future hub.
The obsession with becoming the next Silicon Valley is rooted in the desire to attract the best and brightest talent. What companies and government officials need to realize is that, while Silicon Valley may never be replicated, they can cultivate and grow the talent that’s already there.