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The exodus of innovative companies from Silicon Valley coupled with the new realities of remote work has accelerated the imperative for policymakers in Washington state to take steps to attract and retain innovative companies that can drive economic growth and job creation. And they must act quickly.
California’s Innovation Exodus
In recent years, the relocation of iconic California companies to emerging tech hubs has dominated headlines. Across the board, leaders and entrepreneurs in California blame poor governance and a palpable animosity toward businesses.
It is notable that “we are only in the second inning” of the tech exodus from Silicon Valley, said Tanium CEO Orion Hindawi. “For every one company that left the Valley, there are ten more making that same decision,” he elaborated. “I get a call every couple of days from [a CEO] who says I am about to make this decision.”
While policymakers in California have failed to appreciate the vital role that innovative companies play in driving economic growth and job creation, cities and states across the country are jumping at the opportunity to recruit the businesses that will bring new high-paying jobs and tax revenues along with them.
And it begs the question – is Washington prepared to compete?
Cities and States Compete for Tech Jobs
For tech companies weighing whether to leave California, there is an appealing short-list of desirable destinations – Seattle, Austin, Houston, Nashville, Denver, Miami, Atlanta, and Boston. The receptiveness to businesses, access to talent, and policy landscape are the top priorities for most tech CEOs looking to relocate.
The Seattle area has long topped this list, as innovative companies benefit from an abundant and growing pool of talent in the state. This is in large part due to the continued investment by the state government to expand access to STEM and tech apprenticeship programs. Founders and entrepreneurs are also able to leverage a wide range of startup programs, as well as proximity to an active venture capital network. The area’s natural beauty and abundant lifestyle benefits further reinforce these business upsides.
Despite this rich ecosystem, tech leaders question whether Washington policymakers understand the new competitive dynamic between cities and the ways in which the state’s policy landscape is falling behind. Hindawi states, “the narrative in Washington today is that they do not want to maintain what Nashville, Austin, and Miami, and a bunch of other places are saying that they do want to maintain, which is very attractive to business owners. People can argue that [this narrative] is right or wrong, but it’s somewhat irrelevant. The question is, actually – do you want these people moving to your state, or not?”
Alongside the regulatory landscape, policymakers must also continue to make investments into our cities and communities to make them attractive places to start and grow a business. This includes critical equity and livability considerations – such as transportation, public schools, and affordable housing – as well as steps to ensure regions are able to absorb new companies and jobs.
Remote Work and the Imperative to Retain Talent
Seemingly every week another large tech company announces a permanent shift to a remote or hybrid flexibility model – further solidifying this new reality will extend well beyond the acute period of the pandemic. Along with it, the tech workforce is facing an unprecedented level of geographic flexibility. This extends to hiring and recruitment of new talent as well, particularly as high-demand workers gain more leverage in their ability to work remotely.
The persistent geographic flexibility created by the pandemic has added an additional layer to the inter-state competition dynamic for Washington’s policymakers – not just on recruiting new companies, but also on retaining existing ones. Tech leaders and entrepreneurs already in the state are actively debating whether they should stay.
The second order question in this scenario is, what happens to the local businesses and communities in Washington they would leave behind?
How Can Washington Compete?
This fundamental shift in remote work and inter-state competitiveness requires policymakers to quickly advance policy measures that help foster a vibrant and resilient innovation economy in Washington.
Policymakers should start by taking stock of Washington’s standing in this increasingly competitive field and assess opportunities to attract and retain founders and innovative companies. Indeed, the decision to adapt hybrid work models or to relocate is already on the desk of tech leaders across the country – and policymakers must respond quickly.
WTIA is a committed partner to policymakers as we interpret this rapidly evolving tech landscape and account for the new realities of geographic flexibility. WTIA recommends the creation of an advisory council as we seek to understand and respond to this new reality.
Tanium CEO Orion Hindawi on Washington’s competitiveness as a tech hub: