Austin, already a significant tech center, is the biggest beneficiary of tech workers being able to live anywhere and work remotely:
Austin is the top beneficiary of tech-related migration in the past 12 months, according to data from Microsoft Corp.’s LinkedIn profiles. Nashville and Charlotte also saw noteworthy migration rates.
Why is Austin #1? Tech workers are finally able to live where they want, and it turns out they have similar preferences to other Americans. The southwest has seen a huge influx of people in recent years, regardless of their occupation. Sun, warmth and cheap housing are powerful draws.
The typical house in San Francisco is nearly 3 times the price of the average Austin house. If you moved to SF for a job and the job no longer requires that you be there, you may leave and pocket the difference.
But there are lots of cheap sunbelt cities. Austin wins due in large part to the presence of a major university. This is something all major tech centers have, whether it’s San Francisco, Boston, New York, or Beijing. Companies often grow out of these universities, and college towns tend to have amenities that attract educated workers. Miami lacks a first rate university, hampering its prospects of competing with the likes of Austin.
Even before COVID, I noticed a strong trend to remote work in the tech sector. I worked in medical software for nearly 15 years. At the beginning, working from home was never allowed. By the end, I was remote 75% of the time.
The tech sector has reconfigured itself during COVID to operate remotely and is unlikely to go back. As an investor in startups today, I’ve seen venture capital firms start to hire anyone regardless of where they live. Will they fire these employees or force them to move once COVID is over? Not likely. Also, investors are finding they can meet with a lot more companies over Zoom than if they had to travel between offices. These efficiency improvements aren’t going away.
What venture firms do affects the whole tech sector. Many often required startups they invested in to move to SF. But that’s a thing of the past.
I’ve actually never been to Austin, but I hope to soon! I took a class at UT-Austin online this spring, and it was superb. Austin has clearly invested in education, and now it’s reaping the rewards.
Dig into these posts for more on tech and startups:
- Big Investors Are on Zoom and They’re Not Going Back
- 7 Companies Had 3 Minutes Each to Pitch Us. This Is What Happened.
- This Is How Startups Pitch Investors
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