Slashdot Mirror
High-Tech Start-Ups Put Down Roots In New Soil
ThousandStars writes "The Wall Street Journal says that 'High-tech start-ups are increasingly setting up shop in places previously not known for attracting high-tech firms. A number of cities, such as Kalamazoo, Mich., and Toledo, Ohio, are offering grant money and tax breaks to high-tech start-ups, just as the usual venture-capital hot spots, such as Silicon Valley and Boston, continue to see a pullback in venture lending.""
My wife & I left silicon valley about 5 years ago at the tail-end of the dot-com bust. I had a GREAT time there, aside from the worthless options and 80-hour work weeks. We thought it was time to start a family, and wanted a bigger, less-expensive house, no traffic, slower quality of life. We were willing to trade a premium salary for it.
WHAT A HUGE MISTAKE.
Turns out that when you're in a smaller town, you have NO OTHER employment options. What happens if you don't like your little tech company? uh, you're screwed. In Silicon Valley you always had a network three deep that could get you a fun, interesting job in a little bit. You had options. A backup plan. In smaller towns you're running without a safety net. If you leave the relocated tech-company, you've got the small-town mindset and businesses. I see plenty of craigslist ads that read, "must have 5 years networking experience, cisco preferred. Be able to build and administer our 50-person network. References required. $10/hr, contract only." I'm seriously NOT kidding.
I wish I could completely rewind my experience and still be in silicon valley. Higher rents, more traffic, silly housing prices and all.
The economy is moving online. Soon, it won't matter anymore where you live and who you work with.
And I'm not talking about the scams such as "make $100K working from home". I mean real, legitimate, value-added work (like programming), that you do wherever you want, whenever you want, as long as you deliver a good product.
Problem is, and all jokes about single engineers aside, that means the spouse has to find something viable in that location as well. Some professions are pretty portable, others aren't. But it's not just about where you can lure a single person.
Plus, if you lose your job, suddenly you're in Toledo where there's not that many other companies. At least in the Bay Area, you know you have multiple options to switch to should you want to. Without having to sell your house which no one wants or needs to buy. (Admittedly this is a chicken-and-egg problem; if enough companies move to Toledo or wherever, this goes away.)
I wouldn't move from Pittsburgh to anywhere in California for any amount of money.
What we see on a state by state basis to attract jobs while at the same time we try to make the evil multinational corporations pay (Obama and taxes) we may start to see many start ups simply avoid the US.
Intel has been accused many times of avoiding paying taxes for the massive tax breaks they get to have a location in the Portland Oregon area, but most people don't realize they not only pay salaries taxed by the state, they also are taxed for their property. Nike also in the area has a much lower inventory tax because they don't have a fab full of multi million dollar manufacturing tools. To attract Intel, the city of Hillsboro had to adjust for this.
Failure to do this would let them have a larger piece of nothing, With no concessions for the value of the factory equipment Intel would have built elsewhere. The clean water and moderate electricity rates are what attracted them. High local tax areas could soon erase the advantages.
I am afraid that Obama's economic plan will drive the rest of large manufacturing overseas. The Union obligations are already having a severe toll on the auto industry without the help of taxes driving them out of business.
Tax the rich simply is to send them elsewhere in a global market where conditions are better.
The truth shall set you free!