“In a time of drastic change, it is the learners who inherit the future.” These words by American philosopher Eric Hoffer ring exceptionally true today, particularly as innovators and leaders attempt to make sense of what’s ahead.
Silicon Valley, which is often referred to as the global epicenter of technology innovation, is feeling its share of challenges in this current pandemic in ways that mirror other major metro areas.
The strong concentrations of industry, talent, and culture have long enabled the region to be unique and unlike any other part of the world. However, looking forward, it becomes clear that changes will emerge that could alter the image and makeup of this storied region.
Based on the unique attributes of Silicon Valley, I posit that the recent experience of the pandemic will result in a gradual shifting within three large areas: focus, people resources, and regional tone.
A More Balanced Focus
Although few voices in the tech industry forecasted the challenges the virus would cause, the vast majority of leaders and participants in our industry didn’t really understand what was about to hit us, until it did.
It’s undoubtedly clear to everyone that things will be different moving forward and new problems also need addressing now. New categories of companies will be created and some existing players will shift more resources and investments into sectors that were relatively stagnant in prior years.
Verticals like biotech, supply chain logistics, productivity, or communications could now become as prevalent as cloud, gaming, transportation, or cryptocurrencies. Opportunists rightfully chase the opportunity and the last many months have exposed numerous areas for improvement in our world.
That’s not to say areas that were ripe and active in prior years won’t continue to see growth, but it’s reasonable to assume activity happens across a broader set of categories. The mundane and boring sectors that serve a strong public need quickly become attractive in a market of anxiety.
The future of Silicon Valley companies could involve a more distributed workforce, with a smaller physical concentration of people needed in the Bay Area. And before you dismiss this point as obvious and non-novel, let me describe nuanced parts of this to drive this idea home.
A work-from-home or remote-work environment will undoubtedly become more acceptable than before, simply because of newly created workflows, changes in operations, and realized cost-savings. Companies that see value may only return some of their staff to office workplaces, instead of all. Then, the location of the remote workers becomes much less relevant.
Furthermore, recent large-scale layoffs among large Silicon Valley-based companies will inevitably cause some number of employees to relocate out of expensive markets like the Bay Area. Consider that unemployment in metro markets could likely remain a huge challenge for the foreseeable future when compared to 2018 or 2019 rates.
Pair that with the expensive cost-of-living in the Bay Area and you have an unsustainable situation for anyone in job limbo. Eventually, a portion of this talent will move to more affordable markets and will be hired by companies located everywhere.
Silicon Valley has fueled technological, economic, and informational progress across the globe for decades. While certainly not the only driver of progress, this region surely cemented itself as one of the key growth engines for our modern economy. This is best exemplified by simply looking at the names and headquarter locations of some of the most valuable companies in the world.
What came along with that is a unique level of pride, which I think is partially deserved. Talk to anyone who’s spent meaningful time in the Bay Area and they’ll likely have their own description of the tech ethos. Some would characterize this regional sentiment more as hubris or arrogance, but after nearly a decade of living here, I think ‘pride’ is a better term.
So what will change here? We will likely see a more balanced sentiment of humility and general national awareness.
It was easy to argue that Silicon Valley was an insulated and vastly different ecosystem from the rest of the world. Today, not so much. Tech companies and employees are facing most of the same challenges other regions are dealing with during this pandemic and we can’t solve the problem by ourselves. I envision that this will lead to more participation in the national dialogue in the future and more empathy towards national challenges.
Therefore, if you consider how investment areas will re-balance to take advantage of emerging industries and how many residents will consider relocating to new markets, it’s easy to imagine a slightly different region taking shape. Add on general sentiments of national connectedness and I think you see a brighter, faster-moving, and more innovative Silicon Valley.
By: Mark Hall
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