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https://paloaltoonline.com/blogs/p/print/2016/07/11/why-dont-more-companies-move-or-expand-outside-the-bay-area


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By Steve Levy

Why Don’t More Companies Move or Expand Outside the Bay Area

Uploaded: Jul 11, 2016

Some companies have moved or expanded elsewhere. And some residents have moved away to escape the high housing costs. But this has not stopped the region and peninsula from outpacing the state and nation in job and population growth. The Bay Area has led the state in regional population growth as a result of these trends for the first time since the Gold Rush days.

Some posters have suggested incentives for firms to move. Besides the political issues (what public official would propose losing jobs), there are ongoing incentives from other states. The news regularly reports visits from governors from Texas and Florida and other states. Recently Nevada offered very large incentives to Tesla to locate there.
And California has made efforts to jump start job growth in the Central Valley and North Coast. So there already are incentives for moving.

But the news is also filled with plans for Facebook expansion in Menlo Park, efforts by Google and LinkedIn to expand in the Mountain View, recent moves by Apple and Google to acquire sites in San Jose and moves by Uber and Ford to establish facilities in Palo Alto.

With the high housing costs and difficult commutes, why don’t more firms take the incentives to move?

There are good reasons why they want to be here but I think the first step is to acknowledge that despite the high costs and incentives to move, these companies and their workers really do want to be here.

The two pretty obvious reasons are 1) access to the country’s deepest high skill labor pool and 2) being where the action is. The third big reason is related to the first—many highly skilled workers want to live in the Bay Area.

I know these reasons from my work on the Silicon Valley workforce board. Our labor market works for individuals and companies as workers can find jobs and companies can find workers at least in highly skilled occupations because the labor force is so deep and information flows are well organized.

It is a hard combination to beat despite the high costs and traffic. The actions of companies and individuals are giving us a strong message. There are no develops in this exchange—just people and companies in the innovation capital of the world.

Wishful thinking will not stop these trends which is why it is necessary in my opinion to tackle the housing and transportation challenges that growth brings.

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