Another day, another set of announcements about large companies and rich people moving to lower cost US states. Yesterday it was announced that Oracle will move its corporate headquarters from Silicon Valley to Austin, Texas. (If you remember, Elon Musk also recently announced that he had moved himself to Austin from California.) The company has said that the move puts Oracle in the best position to grow and to give its employees greater flexibility about where and how they work.
While these sorts of moves are making headlines right now, it's important to keep in mind that this is not necessarily a new phenomenon. In fact, depending on how you look at it, you could argue that these headlines are a lagging indicator for trends that have been underway for some time. Below is a chart from New Geography showing the top 50 state-to-state moves last year. Number one is the move from California to Texas with 45,172 net movers. And number two is the move from New York to Florida with 38,512 net movers.
According to New Geography, California saw a net domestic migration loss of 912,000 people from 2010 to 2019. And the most popular receiving states are what you would expect: Florida (1,230,000 people) and Texas (1,146,000 people). A big part of this story obviously has to do with housing affordability and the search for an overall lower cost of living. As well, since companies are always in need of young and smart talent, it makes since for them to locate in places where young and smart people want to live.
But urbanists like Richard Florida have also pointed out at this relocation of companies could be a leading indicator for something else: the decline of innovation in America. Here, he argues that in the nascent stages of a new invention, there tends to be a tight clustering phenomenon. Think steel in Pittsburgh, cars in Detroit, and computing in Silicon Valley. However, as the industry matures, the tendency to centralize seems to decline and companies then start moving around.
I'm not yet convinced that this is what's happening. Because there seems to be a pile on happening in specific cities like Austin (which, by the way, I hear is terrific). Even before this pandemic, there was a growing sense (from the outside, mind you) that the Bay Area had simply gotten too expensive, both for individuals and for companies. It would seem that when you greatly restrict the supply of new housing and make it unattainable for many, people go find housing somewhere else. Sometimes in other states.
Photo by Tomek Baginski on Unsplash
Architect Sheena Sharp, of Coolearth Architecture, tweeted something interesting out today:
https://twitter.com/sheenasharp/status/1332369424775409664?s=20
Improving this would be good. And it is the same gripe that I had with architecture school when I was there. Why is it taboo to talk about money and the market? Why must design exist, in many instances, within a vacuum?
I can appreciate the value in not always constraining yourself with the status quo. To innovate, you have to stretch. And sometimes, or perhaps oftentimes, the best ideas initially seem dumb. It's important to have room to experiment and tinker.
But eventually, reality does matter. Plans that look good on paper, may not be suitable for the market. Constraints are a big part of what makes the city building industry so rewarding. Planning is hard. Building is hard. Getting consensus is hard. It's all incredibly difficult and you have to be creative.
The really elegant solutions usually need to weave across and through many different objectives and stakeholders. And so in my view, the more you can empathize with those other constraints, the more elegant your solution will be. Knowing more is good.
Management guru Clayton M. Christensen died this week. Sadly, he was only 67 (leukaemia). A professor at Harvard Business School, Christensen was best known for probably two things: His work on disruptive innovation and his teachings on how to live a more fulfilling life. If you've read anything on innovation and disruption, I am sure you've come across the work of Christensen. He had a way of explaining things by reframing them. Here is a short video about the "job" of a McDonald's milkshake. And here is another one where he explains the cycle of disruptive innovations, sustaining innovations, and efficiency innovations. Both videos are worth watching.
https://youtu.be/Zn6-KksdOgE?t=67
Another day, another set of announcements about large companies and rich people moving to lower cost US states. Yesterday it was announced that Oracle will move its corporate headquarters from Silicon Valley to Austin, Texas. (If you remember, Elon Musk also recently announced that he had moved himself to Austin from California.) The company has said that the move puts Oracle in the best position to grow and to give its employees greater flexibility about where and how they work.
While these sorts of moves are making headlines right now, it's important to keep in mind that this is not necessarily a new phenomenon. In fact, depending on how you look at it, you could argue that these headlines are a lagging indicator for trends that have been underway for some time. Below is a chart from New Geography showing the top 50 state-to-state moves last year. Number one is the move from California to Texas with 45,172 net movers. And number two is the move from New York to Florida with 38,512 net movers.
According to New Geography, California saw a net domestic migration loss of 912,000 people from 2010 to 2019. And the most popular receiving states are what you would expect: Florida (1,230,000 people) and Texas (1,146,000 people). A big part of this story obviously has to do with housing affordability and the search for an overall lower cost of living. As well, since companies are always in need of young and smart talent, it makes since for them to locate in places where young and smart people want to live.
But urbanists like Richard Florida have also pointed out at this relocation of companies could be a leading indicator for something else: the decline of innovation in America. Here, he argues that in the nascent stages of a new invention, there tends to be a tight clustering phenomenon. Think steel in Pittsburgh, cars in Detroit, and computing in Silicon Valley. However, as the industry matures, the tendency to centralize seems to decline and companies then start moving around.
I'm not yet convinced that this is what's happening. Because there seems to be a pile on happening in specific cities like Austin (which, by the way, I hear is terrific). Even before this pandemic, there was a growing sense (from the outside, mind you) that the Bay Area had simply gotten too expensive, both for individuals and for companies. It would seem that when you greatly restrict the supply of new housing and make it unattainable for many, people go find housing somewhere else. Sometimes in other states.
Photo by Tomek Baginski on Unsplash
Architect Sheena Sharp, of Coolearth Architecture, tweeted something interesting out today:
https://twitter.com/sheenasharp/status/1332369424775409664?s=20
Improving this would be good. And it is the same gripe that I had with architecture school when I was there. Why is it taboo to talk about money and the market? Why must design exist, in many instances, within a vacuum?
I can appreciate the value in not always constraining yourself with the status quo. To innovate, you have to stretch. And sometimes, or perhaps oftentimes, the best ideas initially seem dumb. It's important to have room to experiment and tinker.
But eventually, reality does matter. Plans that look good on paper, may not be suitable for the market. Constraints are a big part of what makes the city building industry so rewarding. Planning is hard. Building is hard. Getting consensus is hard. It's all incredibly difficult and you have to be creative.
The really elegant solutions usually need to weave across and through many different objectives and stakeholders. And so in my view, the more you can empathize with those other constraints, the more elegant your solution will be. Knowing more is good.
Management guru Clayton M. Christensen died this week. Sadly, he was only 67 (leukaemia). A professor at Harvard Business School, Christensen was best known for probably two things: His work on disruptive innovation and his teachings on how to live a more fulfilling life. If you've read anything on innovation and disruption, I am sure you've come across the work of Christensen. He had a way of explaining things by reframing them. Here is a short video about the "job" of a McDonald's milkshake. And here is another one where he explains the cycle of disruptive innovations, sustaining innovations, and efficiency innovations. Both videos are worth watching.
https://youtu.be/Zn6-KksdOgE?t=67
Share Dialog
Share Dialog
Share Dialog
Share Dialog
Share Dialog
Share Dialog