Elon Musk believes that state regulators have grown too ‘complacent’ and ‘entitled’ about the state’s tech companies—specifically those in Silicon Valley. A combination of unfriendly legislature, business-hindering regulations, and sometimes hostility have driven tech companies to make the difficult decision of moving out-of-state.
It can almost be considered a voluntary upheaval as recreating the exact harmony that kept these companies flourishing is unlikely to be the same elsewhere.
“As many cities have found in recent years, building such agglomerations is exceedingly hard, as much art as science. Low taxes, modest regulation, sound infrastructure and good education systems all help, but aren’t always sufficient. Once squandered, moreover, such dynamism can’t easily be revived. With competition rising across the U.S., the area’s policy makers need to recognize the dangers ahead.”WealthManagement.com
It has been especially hard for California. The state battled major wildfires, substantial evacuations, rolling blackouts, and above all the COVID-19 pandemic. Now, the state is enduring the loss of multiple tech giants in Hewlett Packard, Enterprise Co., Oracle Corp., Palantir Technologies Inc., Charles Schwab Corp., and McKesson Corp. who have all preferred the high-road.
The state is “Far from welcoming experimentation, it has sought to undermine or stamp out home-rental services, food-delivery apps, ride-hailing firms, electric-scooter companies, facial-recognition technology, delivery robots and more.”
But above all, what tech companies believe are downright hindrances, are attempts at trying to prohibit corporate cafeterias at company sites, and regulating which new products are deemed worthy of testing (Office of Emerging Technology). New privacy laws which have imposed heavy compliance burdens which account for 1.8% of state output, an 8.8% State Corporate Tax, and %13.3 are only even more factors for leaving.
The perception that business owners want state regulators to have of their tech-companies is that they are “more than the sum of their parts.” The companies offer an exponential effect on the growth of jobs, wages, innovation, and business creation. To put this narrative into perspective, WealthManagement.com reported that for each new tech-job created there are five additional jobs created across other industries.
For now, California’s Silicon Valley won’t be dethroned as the nation’s tech-hub capital. The threat is certainly there if the current hostel environment worsens for them, but the area still fields some of the most valuable companies in the world.