Silicon Valley is becoming unsustainable. Despite being home to some of the most successful tech companies in the world, the Bay Area is staring in the face of dreaded stagnation. LinkedIn data is showing employee headcounts to be dropping, and some analysts suggest we’re only witnessing the start of a significant brain drain.

Several recent reports have suggested it is only the sixth-best metro for STEM workers, behind the likes of Seattle and Austin, whilst Business Insider ranked it below London and Tokyo for innovation.

There are several Canadian cities too which are competing strongly with Silicon Valley. Namely, Toronto and Ottawa, which have around 300,000 tech workers between them, along with Vancouver’s 75,000. With cheaper living costs and rising tech opportunities, it’s clear to see why Canada is getting a lot of attention.

Current times have created opportunities for tech companies in North America – while traditional land-based businesses are struggling, their online counterparts have been blossoming. Such an example could be seen with land-based gaming businesses who struggle heavily, while Canadian online casinos such as JackpotCity online casino are doing well – offering all the gaming services people need without having to leave the house during lockdowns.

However, it’s not necessarily the fierce competition of rival cities that are harming Silicon Valley, but instead, its own inherent flaws and failures to address them. Silicon Valley is seemingly shooting itself in the foot.

Why are STEM workers leaving Silicon Valley?

The major cause of this brain drain is the rising costs of San Francisco. The median rent for a 2-bedroom home is over $4,300, with the median home price around $1.2 million. Even with high wages, it could be a long time before workers can be approved of a mortgage.

Compare this to the average house price in Ottawa, which comes in at $479,000, and it’s a night and day with what workers can afford. Population inflow into the city is still positive, but its growth has stalled – whilst outflow is on the rise.

It’s not just the costs of the current workers that’s an issue, but the costs of entry for immigration. Silicon Valley is built on the immigration of talented engineers, computer scientists and entrepreneurs. Over 57% of Silicon Valley workers have STEM jobs, a Bachelor’s degree and were born outside of the US. So, Trump’s previous tightening on immigration has not conducive to growing this environment.

It’s being observed that more and more talented immigrants are returning home to their own booming tech industries, like in India, Israel and China, whilst Silicon Valley becomes more unsustainable. With the H-1B visa becoming increasingly difficult to attain, remaining in home countries that have rising opportunities can make increasingly more sense.

With lots of talented workers leaving, booming tech scenes in other countries and a possible recession – we may see a slight power shift away from Silicon Valley. Or, at least, the democratisation of tech – given that this is an inherent part of tech, and IoT in particular. Plus, it’s not the competing locations, but remote work in and of itself.

Coronavirus lockdown measures have been in place for almost a year now, meaning the trends we’re seeing could become routine and permanent. Forcibly working from home, much against the reluctance of many tech companies, has given food for thought: why pay $4,300 in rent when I could do this job from anywhere in the country and cut my outgoings by more than half.

Silicon Valley, of course, remains a highly regarded tech area that’s become the heart of the tech industry. Whilst we’re seeing tech become more decentralised, both in terms of cities and work-from-home, Bay Area’s future could lay in the hands of California’s own actions in fighting the housing crisis.


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