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INSIGHTS ABOUT THE FUTURE OF TECH, REMOTE WORK, AND SAN FRANCISCO
During last week’s Tech Migration event, sf.citi heard key insights about the future of tech and tech-focused cities from an incredible lineup of industry leaders, real estate experts, and the Mayors of Austin and Miami.
The event began with a lively conversation between Kim Mai-Cutler, Partner at Initialized Capital, Guy Berger, Principal Economist at LinkedIn, Justin Bedecarre, CEO of Raise, and our moderator Lizza Dwoskin, Silicon Valley Correspondent for The Washington Post. What the speakers quickly established is that while a California exodus hasn’t materialized, people did leave San Francisco (even if they didn’t travel far). More significantly, the number of people moving into San Francisco has declined significantly during the pandemic. This trend was also highlighted in a fireside chat between sf.citi Executive Director Jennifer Stojkovic and CEO of Zumper Anthemos Georgiades who has observed an “escape from cities” in Zumper data.
Our conversation with Mayor Francis Suarez of Miami and Mayor Steve Adler of Austin revealed another key theme, which was that tech’s success in Austin and Miami doesn’t mean tech will decline in San Francisco. In fact, every one of our speakers expressed optimism about the future of tech and its growth in cities across the country. Discover more findings about the tech migration and a complete recording of our event below.
THE TECH CONTRAST BETWEEN SAN FRANCISCO AND NEW YORK CITY
In the latest sf.citi blog post, we explore how tech has responded to the pandemic in San Francisco and New York City, as well as the shared challenges both cities face in their recovery from COVID-19.
sf.citi hosted our third Mapping the Tech Exodus event with Julie Samuels, Executive Director of Tech:NYC. We learned that tech continued to expand in New York City during the pandemic, bucking the trend of other industries who vacated their downtown offices. Apple, Facebook, and Google all claimed real estate in New York City in 2020, which is an encouraging sign for a city that has been working to grow its tech economy for many years. San Francisco, in contrast, has seen a less conclusive trend. While VC funding for San Francisco startups hit record highs in 2020, a number of tech companies have downsized their office space all while announcing permanent hybrid work policies.
San Francisco and New York City face many of the same challenges on their road to recovery from COVID-19. The reality that remote and hybrid work will outlast the pandemic raises questions about the durability of downtown’s economic ecosystem, which relies heavily on foot traffic from a bustling office industry that may be forever changed. Both cities have also seen key revenue streams plummet, which will likely mean several more years of budget deficits before they return to pre-pandemic levels. In either case, tech will be crucial to recovery on both coasts.
NEW INNOVATION NEEDED TO BOOST THE BAY AREA INNOVATION ECONOMY
sf.citi’s Jennifer Stojkovic joined Ahmad Thomas, CEO of the Silicon Valley Leadership Group, and Sean Randolph, Senior Director of the Bay Area Economic Institute, to discuss the future of the Bay Area’s innovation economy.
Hosted by the Commonwealth Club, this conversation examined how tech’s widespread embrace of remote and hybrid work policies will affect the Bay Area’s economy for years to come. Sean Randolph of the Bay Area Economic Institute explained that the Bay Area transformed into the premier global technology innovation economy due its tremendous concentration of talent and technology. Remote work, however, has created a new “gravitational force” that challenges the Bay Area’s historic density of both these things.
Ahmad Thomas of the Silicon Valley Leadership Group (SVLG) observed, “For the first time, the cost-benefit dynamic is beginning to concretely shift away from the Bay Area.” He explained that the benefits of Bay Area talent and access to capital are starting to be outweighed by persistent affordability challenges—both in terms of living and doing business in the region. All three speakers agreed that equity in the Bay Area can only be achieved by integrating the region’s innovative spirit into public policy and utilizing private capital to develop new solutions.
DID YOU KNOW?
Google announced that it will be investing $7 billion in offices and data centers across 19 states in the U.S., including $1 billion here in California. Although Google employees will remain fully remote until at least September 2021 and have the option to work from home two days a week after offices reopen, Google is clearly committed to expanding in the Bay Area. “I believe a lasting economic recovery will come from local communities, and the people and small businesses that give them life. Google wants to be a part of that recovery,” said Google CEO Sundar Pichai. Read more on that here.