California means Silicon Valley and Silicon Valley means tech industry. Silicon Valley has the most densely concentrated tech companies in the world.
The valley’s perfect climate, natural beauty, casual attitude, and proximity to prestigious schools all contributed to its development.
Despite all the advantages, Silicon Valley is now witnessing a downfall, threatening its reputation. This temple of tech is finally losing its grace.
Why is Silicon Valley on the rocks?
The biggest reason for this is that California is the highest taxed state in the U.S., leading to heavy taxes and a higher cost of living.
Beyond Artificial Intelligence and it's considerations, Silicon Valley’s reputation as a global high-tech center suffered a massive hit after a scandal in recent years — from Facebook’s Cambridge Analytic debacle to Google’s sexual misconduct investigations.
Another reason is remote work, which changed people's perspective and helped them consider other "better" options. The competitive behaviour of Silicon Valley has turned young techie's dreams into greed, power and wealth, which is a big concern for the public.
Engineers working in the sector have agreed that one has to make nearly a million dollars a year to even consider staying.
Who has joined this exile?
Due to Silicon Valley's sinking reputation and high housing prices, many startup founders are foregoing San Francisco for some other states.
Some audacious big tech giants are on the move. The creators of the valley, Oracle and Hewlett Packard (HP) Enterprise, are moving their headquarters, Londonsdale's VC firm, the Dropbox (DBX) CEO, FileTrail, DZS Inc., the founder and managing partner of early stage venture capital firm Blumberg Capital, tech mogul and Facebook board members, the Sharkey brothers who own a company called Autopilot.
The Tesla CEO Elon Musk, Iron Man, recently moved to Texas, as did Reddit Co-founder Alexis Ohanian.
According to data from the Austin Chamber of Commerce, 39 companies in tech and other industries had relocated to Austin so far this year.
Predictions say that only the best-funded companies will be able to survive in Silicon Valley i.e. the Ubers and Amazons of the world.
Carl Guardino, a Silicon Valley advocate for decades, had admitted that losing top innovation leadership is never helpful. All these are now addressed as 'tech exodus' from the Bay Area. As for now, it's not just about tech firms, but companies like e-cigarette maker Juul Labs have moved out from the Bay Area, too.
So, where are these gypsies halting?
It is often said that money flows where it’s respected most, and this story bears that out. While California takes as much as 13.3% of top earners’ income, one of the highest rates in the U.S., Texas is only one of the seven states that does not have an income tax. Not only Texas but Miami and Austin have gathered a lot of tech attention.
But lacking explanation, Silicon Valley is still known as the most successful tech startup ecosystem on the planet. No one can disagree, that this pandemic made people think out-of-the-box and something better.
This article has been written by Rutuja Gosavi for The Paradigm
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