Kim-Mai Cutler writes at Tech Crunch:
Why is the tech industry migrating to cities anyway?(ht Robert Blumen)
This is a demographic shift that is much larger than the technology industry itself — although there are some tech-specific reasons that have fueled a migration north from the historic heart of Silicon Valley over the last 10 years.
This is what urbanist Alan Ehrenhalt calls “The Great Inversion,” a major shift where cities and suburbs have traded places over the last 30 to 40 years. As people marry later and employment becomes more temporal, young adults and affluent retirees are moving into the urban core, while immigrants and the less affluent are moving out.
San Francisco’s population hit a trough around 1980, after steadily declining since the 1950s as the city’s socially conservative white and Irish-Catholic population left for the suburbs. Into the vacuum of relatively cheaper rents they left behind, came the misfits, hippies and immigrants that fomented so many of San Francisco’s beautifully weird cultural and sexual revolutions.
But that out-migration reversed around 1980, and the city’s population has been steadily rising for the last 30 years.
This is a phenomenon that’s happening to cities all over the United States.
It’s happening in Seattle, Atlanta, New York City, Boston and Washington. D.C....
The job market has changed as well. In 1978, the U.S.’s manufacturing employment peaked and the noise and grit of the blue-collar factories that once fueled the flight of the upper-middle-class disappeared. These vacant manufacturing warehouses turned into the live-work spaces and lofts that emerged in the 1980s and 1990s in cities like New York and San Francisco.
The concept of lifetime employment also faded. Today, San Francisco’s younger workers derive their job security not from any single employer but instead from a large network of weak ties that lasts from one company to the next. The density of cities favors this job-hopping behavior more than the relative isolation of suburbia....
There are also some tech industry-specific reasons too. The capital costs required to found a company and launch a minimum viable product are much lower than a decade ago. Startups also need fewer people, especially with the low distribution costs provided by platforms like Apple’s iOS app store or Facebook. So it’s easier for lots of small companies to find pockets of commercial real estate in the city for new offices. It’s also easier for VCs to fund an order of magnitude more experiments, even if the same proportion of them fails...
But the big wave of the last decade has been social networking. And every notable consumer web or mobile product of this wave has been seeded through critical mass in the “analog” world. Facebook had university campuses. Snapchat had Southern California high schools. Foursquare had Lower Manhattan. Twitter had San Francisco. These products favor social density.
An even newer generation of startups addresses distinctly urban questions. Airbnb exists because in 2007, San Francisco didn’t have enough hotel capacity to house visitors in town for an industrial design conference. Uber exists because the city’s taxi market was under-supplied with drivers and smartphones offered a new way of summoning transportation on demand. Then there are very young startups like Campus, which is like a venture-backed communal living movement, Leap Transit, which is trying to shake up scheduled transport, or any of the companies out of Tumml, an urban ventures incubator.
As tech workers have moved into cities, the industry has changed San Francisco’s culture and San Francisco has changed the technology industry.
Nevertheless, while tech is fueling San Francisco’s current boom and has helped cut the city’s unemployment rate by about half since 2010, this gentrification wave has been going on for decades longer than the word “dot-com” has existed.
And it’s happening all over the country.
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