As chief executive officers begin to look at setting up shop outside Silicon Valley, some are beginning to wonder if the region’s impressive run, as a Bloomberg op-ed calls it, is ending.
Although Apple is building a new $5 billion headquarters in the area, the region is looking “tapped out,” the article states. Employment in the San Jose metro area had its largest drop in August in seven years—and it’s been falling in four of the past eight months of 2017.
“While wage growth in the region remains strong, and unemployment hovers at a low level of 3.5 percent, the labor force has begun to shrink, indicating that one of the strongest labor markets in the country is no longer bringing people in,” the article states.
The housing market is likely to blame for this trend, according to the article—specifically, too little housing to go around. That’s not likely to hurt tech giants like Apple that can pay top dollar to recruit top talent in the area, but the decision by another giant, Amazon, to build a second headquarters outside Seattle “may have kicked off a new geographic era for the technology industry,” according to the article.
“Over time other talent clusters will grow in lower-cost regions,” it continues. “Whether it’s in a couple of years or a couple of decades, eventually today’s tech titans will feel economic pressure to cut costs and restructure, just as every company and every industry before it has. And when that moment comes, Apple’s glamorous new headquarters, rather than feeling like a spaceship, may feel more like the Titanic.”
Another cause for change in the region may be that workers there feel too entitled. That’s the view of Vineet Jain, CEO and co-founder of Egnyte, a file-sharing startup based in Mountain View, California, according to a CNBC article. He plans to add 150 employees to his roster of 300 in the next 18 to 24 months by hiring in other U.S. and even European cities ahead of a possible initial public offering in 2019. For instance, Jain plans to open an office in Raleigh, N.C., and hire folks in Spokane, Washington; Bracknell, England; and Poznan, Poland.
Workers in Silicon Valley demand high salaries and plentiful perks, and move on to another job quickly when they’re unhappy because there are so many opportunities, Jain told CNBC. “There are no consequences for non-performance” and “a sense of entitlement in the valley,” says Jain, whose 10-year-old company competes with Google, Facebook in nearby Menlo Park and other giants for sales and engineering workers, the article states.