Wednesday, December 01, 2010

Best US Cities For Geographic Arbitrage

One reset trend I'm tracking is that of geographic arbitrage. The idea is to get more bang for your big city buck. Introducing the 11 Best Cities for Telecommuters:

In most lists of the best telecommuting cities, the focus is on local technology and the quality of Internet access. But as high-speed broadband and wireless options become more ubiquitous, and with freelancing making traditional workers less profitable, the needs of telecommuters are shifting. For remote workers, it's hard to justify paying a premium to live in a pricey city like New York or Los Angeles, especially when many of the country's second cities offer first-rate values.

Rust Belt cities dominate the list. I think these places represent a new group of winners emerging out of the Great Recession. There are a few usual suspects (e.g. Austin), but a key feature of the surprise cities is the production of talent. Both Silicon Valley and Alley can cost effectively "offshore" operations in Pittsburgh.

Much of these telecommuting opportunities ride on the backs of expatriates. Talent leaves a Rust Belt city and works for the big boys on either coast. As the career path matures, valued workers head for the interior in search of a better quality of life. Firms such as Google are desperate to plug the brain drain and thus facilitate the relocation.

Songwhale maintains corporate and sales offices in San Francisco and Indonesia – the latter a bellwether for future trends – and its technology is developed in Pittsburgh, Minneapolis and Beijing (with China Mobile generating $330 million in revenue per day, notes Aini, a toehold in that country is a must).

The ease with which he is navigating the city's business community is something of a revelation for Aini. "Audrey Russo and the Pittsburgh Tech Council have been terrific. At our first meeting with them, the mayor was at the table. You can be a big fish in a small pond here as opposed to one of fifty interactive media companies coming out of San Francisco. What I love about Pittsburgh is the Midwest mentality, the work ethic. There's not as much entitlement. For a company that's looking to grow, that's key and it's what's rich about this place. Coming from big cities, I can see that. Pittsburghers don't know what they've got."

Pittsburgh is talent rich and inexpensive. The outmigration links are invaluable. It's easy to stand out and make a difference. These are attractive (i.e. not retentive) qualities. It sells better to outsiders than it does to locals. What Pittsburghers think is of little consequence.

No comments: