For many tech workers, stuck in small apartments and paying exorbitant rent just to be within commuting distance of company headquarters in huge hubs like Silicon Valley, the global shift to remote working caused by theunlocked the ability to telecommute to work from a cheaper, greener, and better location.
Leading tech companies were soon promising their workers that the arrangement could become permanent. Facebook led the effort, adding that it would aggressively open remote hiring, and was quickly followed by many others ranging from Twitter and Square to Salesforce.
With the WFH now the norm, at least for some, so it’s tempting to speculate that gigantic, well-established tech hubs like Silicon Valley are on their way to becoming ghost towns, as employees disperse to different cities and even countries. .
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A new KPMG survey appears to lend credence to this prediction. Out of 800 business leaders, the consultant found that only a third of those polled were confident that Silicon Valley would maintain its leadership position in long-term innovation, with another third confident that it would not.
Two major reasons have emerged for the feeling that the global innovation hub will move away from Silicon Valley: Talent is leaving the region due to the high cost of living and the rise of remote working is pushing other cities. of the world to become leading technology hubs. .
“Technology is an industry where all ships go up, and it would be crazy to think that everything would continue in one place,” Alex Holt, global chief technology officer at KPMG, told ZDNet. “You can’t adapt to every person in an organization, but rather than saying, ‘It’s Silicon Valley or nothing,’ companies will create five or 10 hubs outside the valley so people can work. and operate elsewhere. ”
Throughout 2020, employees fled the campus life of hubs like Silicon Valley, drawn to dream destinations like Lake Tahoe, for example, which in turn began to see an influx of eager home buyers. to connect to work from a new environment that is often much more inviting. .
Bloomberg analysis found that a third of home buyers in some of the cities surrounding Lake Tahoe were employed by tech companies, including 10 buyers from Facebook and nine from Apple.
With that in mind, it’s easy to see why the Silicon Valley-inspired model, with its sprawling campuses with gyms, shops, and cafeterias that blur the line between work and play, is quickly becoming obsolete.
But that doesn’t mean employees are quite ready to say goodbye to the office just yet. When everyone realized that as long as they were connected they could work efficiently from anywhere, they thought about how far they could push that change, says Holt. Some people have taken car tours in the United States because they always wanted to, and made it work with their workload.
“Fast forward a little bit, and I think a large group of individuals then felt like they missed being with their team. Being able to take a trip to the mountains or near a lake and keep doing your thing. work is amazing, but as we’ve gone on, people missed that personal interaction. ”
To retain their top talent, companies will therefore need to strike a delicate balance between the growing popularity of the concept of the “digital nomad” and the continuing need to come together as teams in a physical office.
For Holt, that will mean multiplying the number of hubs a business has locations in so that most employees are within easy reach of an office – and can walk in when they want or are required to.
In fact, only 22% of respondents to KPMG’s survey said they think hubs are no longer important, while almost twice as many decision makers (39%) said they still think employees will continue to come together and collaborate in large cities.
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The analysis even provides a picture of cities on their way to becoming major business locations. Outside of Silicon Valley, respondents viewed Singapore as a major technology hub, followed by New York, Tel Aviv, Beijing and London; but also Bengaluru, Hong Kong, Austin and Seattle.
All of these, KPMG said, will potentially become real Silicon Valley challengers over the next four years.
None of the candidates are surprising – and that’s because some of the criteria that were critical to building a technology ecosystem before the pandemic will continue to prevail – think of modern infrastructure such as high-speed bandwidth, generous tax and government incentives, available funding and especially research-intensive universities.
This is why Holt believes Silicon Valley will remain a tech hotspot, due to the presence of key components such as academic ties. But according to the analyst, there will be a shift from a vision of technology hubs that included only a privileged few, to a dispersion of corporate infrastructure over more areas. And that’s largely for one reason: to adapt to the changing desires of the workforce.
“Before, if you ran a big company, you got the talent to move in and come to your place. What we’re seeing is a shift in influence,” Holt told ZDNet. “Organizations recognize that talent may not want to be exactly where it is, and if you want that talent you need to provide a flexible scenario that works for them as well.”
The coming months and years will soon reveal where exactly these hubs will be located and how companies are handling the dispersion of talent across different regions, and sometimes even countries.
But one thing is certain, according to KPMG’s analysis: the balance of power between employer and employee is changing. In the new world of the WFH, workers are responsible for when and where they move. To retain talent, business leaders will need to adapt to their employees, and not necessarily the other way around.