The migration away from the industry’s east London heartland has echoes of a similar trend a decade ago, when the technology companies began a gradual march from the business parks of the Thames Valley to the capital. However, the move into areas traditionally associated with banks and media companies challenges the accepted wisdom that technology companies favour offices – often converted – in the fringe locations surrounding the City.
Tech is not just moving next to finance in London's urban core. Tech is replacing finance. Why? Access to talent:
“Silicon Roundabout has been a magnet for the start-ups for some time but the bigger companies are realising that they need to be in London to hire the best people. The difference is, they need the kind of space usually taken by banks and big consumer-facing companies, so they come into the City or the West End,” said James Roberts, head of commercial research at Knight Frank.
Instead of thinking of London as a global hub of money, imagine global flows of people. That's the geography of the Talent Economy, the next round of globalization. Talent is cramming into center city at considerable expense. You need to be where the migrants are.
During the last round of economic globalization, you went to Harvard for the M.B.A. Now you matriculate there because the best and brightest flock in from around world. Boston is an international hub for talent production. To lesser extent, so is Pittsburgh. The dawning economic epoch will favor such metros, as well as the nimble alpha cities such as London and New York (where the graduates from the likes of Boston and Pittsburgh go to be developed).
This geography of globalization will punish the suburbs, just as the dawn of the knowledge economy emptied out the downtowns of industrial powers. Schools will deteriorate. Legacy costs will crush a declining tax base. American urban patterns (see Florida) will look a lot more like Paris: Wealth in the middle and poverty concentrated in the banlieues. However, the key is not where people reside. It's where the jobs are, where the best talent wants to work. A suburban office park is a lousy place to develop talent.