Dallas Tech Talent Drives Silicon Valley Migration

In For Employers by Ntelicor

Uber is increasingly illustrative of a migration that is well under way in Silicon Valley. Where has Uber chosen to go?

Well, that too is exemplative in the sense that the previously California-based giant has chosen to pick up stacks for North Texas. The migration from the San Francisco Bay area to more tax-friendly Texas is nearly complete in many tech sectors, and Dallas is taking in a surprising number of these tech companies tired of kowtowing to California regulators and politicians.

Silicon Valley Migration Underway: By the Numbers

North Texas in particular is benefiting from a complex brew of factors driving migration from California to the Lone Star State. In 2017, nearly 10,000 fresh tech jobs entered the North Texas area. This uptick in new tech jobs accounts for 20 percent of new office jobs in the North Texas region, according to one report from a real estate company known as CBRE. The Dallas region is proving particularly tempting as a new headquarters for dozens of high-flying tech companies.

Tech companies as well as life sciences companies, such as biotech firms and geo-engineering companies previously headquartered in Silicon Valley, prove the point more than other sectors of the tech industry. In past years, these kinds of companies have taken up about 30 million square feet of office space in the San Francisco Bay Area’s Silicon Valley. This year, tech companies and life sciences outfits accounted for well over a million square feet of office space in the North Texas area.

Having said all of that, Dallas isn’t the only game in town as Silicon Valley-based companies have also been scouring the country for prime real estate. They’ve consistently chosen office space in large metro areas by transportation hubs and with plenty of attractions for reeling in top talent. New York has been particularly successfully in offering Silicon Valley companies attractive incentives to make the move as New York has been able to rent out or sell five million square feet of office space in recent years.

Austin and North Virginia, by Washington D.C., have also done especially well in terms of attracting top Silicon Valley firms to make the transition to more tax-friendly areas of the country. Austin, which is about 200 miles from Dallas and Northern Texas, accounted for an incredible six million new square feet of office space. Both Apple and Google have set up shop in Austin by setting up regional facilities there. In terms of Northern Virginia, after shopping around the entire country Amazon decided on Northern Virginia for its second headquarters. Northern Virginia is conveniently close to Washington D.C. for Amazon.

Multiple Headquarters Becoming the Norm

Many analysts believe that Dallas is enjoying all of the aforementioned success because of something like a flavor-of-the-month phenomenon and that Austin could quickly move ahead. Uber will lead the charge to Austin by unveiling three thousand new jobs. Uber, like Apple and Google, seems to be planning to have two headquarters moving forward – one headquarters in Silicon Valley and another in Austin. Other companies are settling on Dallas, Northern Virginia, or New York, but the strategy seems to be the same in all cases: Lower the tax liability in California and realize various benefits by setting up shop in a more tax-friendly state.

Clay Vaughn, a marketing guru at CBRE, says that Dallas, an IT staffing hub, has gotten a shot in the arm thanks to the uptick in media attention and all of these recent moves to the area (e.g., Uber’s decision to move three thousand jobs to the area). Pursuant to all of this media attention, many California-based tech companies have assumed that Dallas is the only game in town, or at least the city with the highest potential for growth in the future. Whether that is true or remains true in the future is probably moot since other cities offer more attractive perks and similar tax incentives.

Chelsea Storey, another associate of CBRE, opined that North Texas is large and accommodating enough to absorb all of the growth that Silicon Valley’s tech companies thrown its way. In fact, Clay Jenkins, a country judge from Dallas, gushed that Uber’s high-profile move has stimulated interest from other Silicon Valley companies, which might be ambivalent or on the fence about making the trek to the Big D.

Cities like Dallas were once seen as secondary markets, but now they’re being viewed as primary markets with plenty of top talent, mentors, and increasing economies of scale to the realized newcomers.