Tuesday, December 24, 2013

Silicon Cleveland, Where the Rent Isn't Too Damn High

Innovation has already abandoned Silicon Valley at Pacific Standard magazine.

Theme: Convergence of the Innovation Economy.

Subject Article: "Some Further Thoughts on Moving Silicon Valley to Cleveland."

Other Links: 1. "Rust Belt of Silicon Valley: San Jose Is Dying."
2. "A Creative Comeback in the Big Easy."
3. "A Snowier Silicon Valley in BlackBerry’s Backyard."
4. "Midsize Cities in Poland Develop as Service Hubs for Outsourcing Industry."

Postscript While the move of Silicon Valley to Cleveland got the blog post spotlight, economic convergence in Poland was the star:

In fact, Lodz, a former textile manufacturing center with a population of about 740,000, is just one of several Polish cities that have become service hubs for an international corporate clientele that values Poland’s well-educated and often multilingual work force.

In midsize cities like Wroclaw and Gdansk, Poles are doing back-office work not only for Indian outsourcing companies like Infosys, Wipro and Tata Consulting Services, but also for major corporations like IBM and banks including Citigroup and Bank of New York Mellon.

About 110,000 people work in what is broadly known as the business services industry in Poland. The category includes outsourcers like Infosys that take over such functions as finance or information technology for customers, as well as banks and other companies that set up in-house operations to do their own back-office work.

For me, Poland has been a bellwether for the convergence of the Innovation Economy. Dell moved operations from Limerick, Ireland to Lodz, Poland. Ireland itself is a hot spot of economic convergence. The competition for talent is fierce with more places competing for a piece of the innovation pie. The salary ask for employees in alpha global cities is too damn high.


Steve said...

Moving Silicon Valley to Cleveland makes no sense. Yglesias was busy looking at airline hubs when he should have been looking at universities. His article would have made more sense if Cleveland and San Antonio were replaced by Pittsburgh and Austin respectively (because of Carnegie Mellon & UT-Austin).

Christian said...

Carnegie Mellon is a fine school with a "niche" national reputation in tech, but its program's quality is certainly comparable to that of its more generally influential Cleveland rival, Case Western Reserve University. It's no use arguing which city offers better educational opportunities because both areas are utterly comparable in every way.

At the end of the day, Greater Cleveland/Akron has a larger population (25% more people) than the Pittsburgh CSA, and thus has much more excess capacity to soak up new immigrants.