Silicon Valley

Feudal Future Podcast — Challenges and Solutions for California's Economy

Joel Kotkin and Marshall Toplansky — Wed, 19 Feb 2025 18:57:00 -0500

Is California losing its status as a global innovation powerhouse? Join us for a compelling conversation with Dr. Ken Murphy as we explore the shifting dynamics of California’s economic landscape. We question whether the iconic tech hub is maintaining its edge or if it’s at risk of devolving into a neo-feudalist economy. While Silicon Valley continues to thrive, other regions like Los Angeles and Sacramento face significant hurdles. Dive deep into the challenges of remote work, high operational costs, and regulatory burdens that could threaten California’s standing in high-tech industries.

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The Center for Demographics and Policy focuses on research and analysis of global, national, and regional demographic trends and explores policies that might produce favorable demographic results over time. It involves Chapman students in demographic research under the supervision of the Center’s senior staff.

Students work with the Center’s director and engage in research that will serve them well as they look to develop their careers in business, the social sciences, and the arts. Students also have access to our advisory board, which includes distinguished Chapman faculty and major demographic scholars from across the country and the world.

For additional information, please contact Mahnaz Asghari, sponsored project analyst for the Office of Research, at (714) 744-7635 or asghari@chapman.edu.

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Learn more about Joel’s book ‘The Coming of Neo-Feudalism‘

This show is presented by the Chapman Center for Demographics and Policy, which focuses on research and analysis of global, national and regional demographic trends and explores policies that might produce favorable demographic results over time.

Feudal Future Podcast: The End of the Valley

Joel Kotkin and Marshall Toplansky — Tue, 06 Jun 2023 13:39:41 -0400

On this episode of Feudal Future, hosts Joel Kotkin and Marshall Toplansky are joined by American entrepreneur, Rony Abovitz, and author Michael Malone to discuss the future of Silicon Valley.

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Latest Research: From Chapman’s Center of Demographics & Policy, Joel Kotkin & Marshall Toplansky co-author the new report on Nurturing California Industries.

If you haven’t downloaded the report, see it here

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Support Our Work

The Center for Demographics and Policy focuses on research and analysis of global, national, and regional demographic trends and explores policies that might produce favorable demographic results over time. It involves Chapman students in demographic research under the supervision of the Center’s senior staff.

For additional information, please contact Mahnaz Asghari, sponsored project analyst for the Office of Research, at (714) 744-7635 or asghari@chapman.edu.

Tweet thoughts: @joelkotkin, @mtoplansky, #FeudalFuture #BeyondFeudalism

Learn more about Joel’s book ‘The Coming of Neo-Feudalism‘

The SVB Collapse Marks the End of the Silicon Valley Era

Joel Kotkin — Mon, 13 Mar 2023 11:05:14 -0400

The collapse of Silicon Valley Bank, the second largest in US history, is raising concerns about a “contagion” that could trigger a financial panic. As the 18th largest bank in the US, SVB’s bankruptcy may not prove an event on the scale of Lehman Brothers, but it may reflect something perhaps even more important: the decline of the Valley’s once vibrant entrepreneurial culture.

As a young reporter, I covered bank founder Roger Smith in 1983 when he came up with the idea of providing conventional financing to young, often venture-backed growth companies. In those days the big Wall Street financiers were largely clueless about technology, and the industry needed someone who understood their needs and ambitions. The now-retired Smith became a real player in the tech world, as well as in the Valley’s philanthropic scene.

Read the rest of this piece at UnHerd.

Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

SIlicon Valley VC Firm Moves Headquarters to Cloud

Wendell Cox — Mon, 01 Aug 2022 17:44:53 -0400

The latest California corporate headquarters move is to the cloud. Venture capital firm Andreeson Horowitz made the July 21 announcement, which was also reported by the Wall Street Journal. According to the Journal: “…its new headquarters would be in the cloud after a pandemic driven shift to remote work changed the need to be concentrated in one geographic region.”

In the announcement, co-founder Ben Horowitz noted that “Silicon Valley became the place that attracted most of the great national and international talent,” but that the adoption of remote work during the pandemic proved have substantial advantages:

“It turns out that running a technology company remotely works pretty darned well. It’s not perfect, but mitigating the cultural issues associated with remote work turns out to be easier than mitigating the employee satisfaction issues associated with forcing everyone into the office 5 days/week. As a result, nearly every technology company has moved to a remote or hybrid approach to work and this change is profoundly weakening the Silicon Valley network effect.”

For Andreeson Horowitz, the answer is principally a remote work model:

“Concentrating all of those companies into one or two geographies cuts off great opportunities from anyone who can contribute, but cannot easily move. Remote work is opening up many new locations for entrepreneurs and technology workers. We embrace that by changing our own operating model.”

Horowitz added: “headquarters will be in the cloud and we will continue to create physical offices globally where needed to support our teams and partners.”

Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. He is a founding senior fellow at the Urban Reform Institute, Houston, a Senior Fellow with the Frontier Centre for Public Policy in Winnipeg and a member of the Advisory Board of the Center for Demographics and Policy at Chapman University in Orange, California. He has served as a visiting professor at the Conservatoire National des Arts et Metiers in Paris. His principal interests are economics, poverty alleviation, demographics, urban policy and transport. He is co-author of the annual Demographia International Housing Affordability Survey and author of Demographia World Urban Areas.

Mayor Tom Bradley appointed him to three terms on the Los Angeles County Transportation Commission (1977-1985) and Speaker of the House Newt Gingrich appointed him to the Amtrak Reform Council, to complete the unexpired term of New Jersey Governor Christine Todd Whitman (1999-2002). He is author of War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life and Toward More Prosperous Cities: A Framing Essay on Urban Areas, Transport, Planning and the Dimensions of Sustainability.

Feudal Future Podcast — Power & Responsibility: Tech's Control from the Eyes of a VC

Joel Kotkin and Marshall Toplansky — Tue, 08 Jun 2021 13:08:58 -0400

On this episode of Feudal Future, hosts Joel Kotkin and Marshall Toplansky are joined by Andrew Romans, Venture Capitalist, 3x author, advisor to Corporate Venture Capital Groups & Host of podcast - Fireside with a VC.

Andrew Romans is the founder of 7BC Venture Capital and Rubicon Venture Capital. Andrew lives by the motto - only invest if you can add value – otherwise, you do not deserve to be in the deal. He has financially outperformed more than 75% of all VCs in Silicon Valley. Before becoming a VC he was a VC-backed entrepreneur and 3x author, former techVC and M&A investment banker, founder of The Founders Club & cofounder of Georgetown Angels. He is the author of Masters of Corporate Venture Capital, Masters of Blockchain & The Entrepreneurial Bible to Venture Capital, which have been translated into Chinese, Japanese, Italian and Russian by major publishers. Romans raised over $48m for tech startups he founded by the age of 28. He is fluent in English, French & German. MBA Georgetown University, which he completed on scholarship.

[ 2:33] Concentration of power in global tech

[ 6:45] Historians perspective of the power of tech giants

[16:30] The impact on the middle class and becoming labor slaves

[29:08] Effect of regulations on tech giants and a glimpse into the feudal future

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Learn more about Andrew Romans and his company here : https://7bc.vc/

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Silicon Valley Exits California for Texas

Tory Gattis — Mon, 14 Dec 2020 12:11:03 -0500

The big news this week is all the different tech companies announcing their moves to Texas.

The big one for Houston is the announcement that HP Enterprise is moving its HQ from Silicon Valley to Spring just north of Houston - a long-term legacy benefit of Compaq Computer (which was acquired by HP and kept substantial operations here).

WSJ story: Hewlett Packard Enterprise to Leave Silicon Valley for Texas - Tech giant, which traces its roots to the origins of Silicon Valley, is latest company to move away from area long considered hub of innovation

“Houston is also an attractive market for us to recruit and retain talent, and a great place to do business,” Mr. Neri said, adding that as one of the largest and most diverse cities in the country, “Houston provides the opportunity over time to draw more diverse talent into our ranks.”

And some more detail from their press release: (hat tip George)

"Why Houston?

Houston has long been our largest U.S. employment hub, and construction has been underway since the beginning of the year on a new, state-of-the-art campus in the area. Houston is also an attractive market for us to recruit and retain talent, and a great place to do business. The most diverse city in America and the fourth largest, Houston provides the opportunity over time to draw more diverse talent into our ranks – a key priority for HPE as we work to be unconditionally inclusive.

We also anticipate long term cost savings associated with this move that we can reinvest in key areas of our business and innovation."

And finally a repost from Facebook that digs into what that increased affordability really means for employees:

"Hewlett-Packard announced its leaving Palo Alto for Houston.
$1,100 is the average rent in Houston.
$3,350 is the average rent in Palo Alto.

Just to give a concept of how much the extra $2,250 a month that saves is.
$530 is the average monthly payment on a car.
$460 is the monthly individual cost of health insurance.
$400 is the average monthly cost of food.
$145 is the average monthly spending on gas for a car.
$130 is the average monthly cost of car insurance.
$1,665 a month total.

Those 5 things which are just as essential for people in Palo Alto as Houston and cost about as much in both places cost that much.

If an HP employee moved to Houston and cut rent cost down, but chose to save $585 more a month and put it in a 401k paying 5% for 10 years, they’d have $92,700 or 7 years average rent in Houston.

Those 5 things are also essential, so let’s just say an HP employee moved to Houston and saved the entire $2,250 a month for 10 years.
$27,000 saved a year.
$357,000 saved over 10 years.
27 years worth of rent in Houston.
9 years worth of rent in Palo Alto.

A lot of people have a lot of different reasons for companies leaving, but I think the rent factor and how it’s extremely hard for employees to live is the problem.

Hewlett-Packard was the birth of Silicon Valley and it’s leaving.

I don’t see it as unlikely a future where Facebook, Uber, Google and more could join."

Then there are the other stories on Elon Musk's and Oracle's moves to Austin:

NYT: ‘Welcome to Texas!’: Musk’s California Departure Stokes the States’ Rivalry - Several companies have followed the same path to Texas, which has aggressively advertised lower taxes and fewer regulations.

"California, with its steep housing costs, raging wildfires and strict business regulations, has been losing residents to other states, with Texas as the most popular exodus destination. Of more than 653,000 people who left California last year, about 82,000 went to Texas, more than any other state, according to census figures.

Or, as The Stanford Review wrote in a nod to the native Texan George Strait, “All of California’s Exes Are Moving to Texas.” (????) ...

California and Texas — two economic powerhouses, one led by Democrats and the other by Republicans, with respective populations of 40 million and 29 million — are in many ways natural frenemies. It is a rivalry made up of In-N-Out versus Whataburger, of Disneyland versus the State Fair of Texas, of tacos versus, well, other tacos."

The Verge: Elon Musk says he has moved to Texas, calls California overly ‘complacent’ - ‘California has been winning for a long time, and I think they’re taking it for granted’
Techcrunch: Oracle is headed to Texas now, too

"Taxes, a more affordable cost of living for employees, a lower cost of doing business, and less competition for talent are among the top drivers for the companies’ moves, though there is also a growing sense that culture is a factor, as well."

WSJ: Covid-19, Remote Work Make Austin a Magnet for New Jobs - Texas’ capital is attracting corporate jobs and remote workers, lured by lower costs and lower taxes

All in all a very good week for Houston and Texas! Let's hope this is just the beginning of a much larger tech exodus from California to Texas...

This piece first appeared on Houston Strategies Blogspot.

Tory Gattis is a Founding Senior Fellow with the Urban Reform Institute and co-authored the original study with noted urbanist Joel Kotkin and others, creating a city philosophy around upward social mobility for all citizens as an alternative to the popular smart growth, new urbanism, and creative class movements. He is also an editor of the Houston Strategies blog.

Why Young Talent Is Leaving Silicon Valley

Joel Kotkin and Wendell Cox — Thu, 03 May 2018 10:08:48 -0400

Perhaps no region in the world is more associated with talent than the once-booming San Francisco Bay Area and Silicon Valley. In the first four years of the decade, the area netted an average of 10,000 domestic migrants annually. But by 2016, the tide had turned. About 12,000 residents fled San Francisco that year, and the net outflow for 2017 climbed to 25,000. Nor is the future prognosis particularly great. Seventy-four percent of millennials in the Bay Area are currently considering an exit, according to the Urban Land Institute.

No surprise. San Francisco has devolved in recent years, with streets in some areas marred by the presence of homeless people, excrement and needles. Yet, housing prices are such that the California Association of Realtors now suggests a $181,000 income is necessary to purchase a home, more than 3.5 times the national average.

Expect Bay Area prices to rise further— even if Valley economic expansion continues to slow due to planning policies that block the peripheral growth required to improve affordability. Meanwhile, the outflow of households from the Bay Area could be accelerated by the new federal income tax provisions.

To date, the Bay Area’s job market has survived largely by hiring foreign workers; immigrants account for virtually all the region’s population growth. Many of these are essentially indentured servants on H-1B visas; the Bay Area accounts for a disproportionate share of these contract laborers and depends on non-citizens almost twice as much as other tech-oriented metropolitan areas. If the Trump administration follows through on promises to cut this program, the Bay Area may face even greater talent challenges in the years ahead

The complete listing for the Best and Worst States for Business can be found here.

This piece originally appeared on Chief Executive.

Architecture Critic Paul Goldberger on Silicon Valley, San Jose, and Apple

Adam Mayer — Sun, 27 May 2012 13:16:38 -0400

Last week Paul Goldberger, Pulitzer Prize winning architecture critic for the New Yorker and Vanity Fair, sat down with Allison Arief of the San Francisco Planning and Urban Research Association (SPUR) in downtown San Jose to discuss the state of 21st Century urbanism with a focus on Silicon Valley. Though admired the world over as the preeminent center for technological innovation, Silicon Valley has never been known for its great architecture. Goldberger suggested that this reputation could’ve improved had Apple not missed the mark with the design of their proposed Apple Campus 2 building in Cupertino.

While acknowledging that Apple is probably the best design company at the moment, Goldberger asserted that the company’s design abilities end with small consumer gadgets and fail spectacularly at the urban level. Calling the Norman Foster designed building for the new Apple Campus a ‘beautifully designed donut or spaceship’, he lamented the lack of context and connection to anything around it. Speaking to an audience that included members of San Jose’s city government, Goldberger suggested that Apple missed the opportunity to take the reins to help transform San Jose by relocating at least some of its operations to help its long struggling (and subsidized) downtown.

The reality is that most of the big tech companies in the Valley, not just Apple, have an extreme indifference to place-choosing to locate operations in suburban office parks. This has much to do with the history of Silicon Valley planning as it does with the nature of tech companies, which tend to employ legions of introverted computer engineering types and go to great lengths to remain insular and secretive (Apple taking this to the extreme). Perhaps it also makes perfect sense that rather than even acknowledging the true urban environment, companies whose primary business is creating the virtual world in which we increasingly experience public life take an active stance on turning their backs on the city.

Yet for those still interested in experiencing the delights of pre-Information Era, pre-21 Century urbanism, there is always San Francisco not far up the road. Goldberger made the point that the handful of tech companies who do choose to locate their operations in the city probably have a different mindset than those that stay in the Valley. Twitter being the prime example of the moment- the micro blogging site just leased 400,000 square feet of space on a long-maligned section of Market Street. Up in Seattle, Amazon recently announced its plan to build three new 37-story towers in the downtown area, which the proposal’s architect said is “not about building a corporate campus, it’s about building a neighborhood.”

So even though not every tech company is averse to the city, the Richard Florida argument that high urban density is a prerequisite for innovation and creativity is a bit of a stretch, as the economic success of suburban Silicon Valley continually disproves. Near the end of the discussion, Goldberger suggested that deliberately designing space for innovation might be a bit too self-conscious. This implies that rather than design, factors such as human resources, access to capital and a culture with openness to trial-and-error matter more than the traditional urban hardware of cities.

Adam Nathaniel Mayer is an American architectural design professional currently based in China and California. In addition to his job designing buildings he writes the China Urban Development Blog. Follow him on Twitter: @AdamNMayer.

Information Technology and the Irrelevance of Architecture

Adam Mayer — Wed, 29 Feb 2012 20:38:58 -0500

Throughout history, architecture served as the primary communication device of common cultural values. Whether inspiring religious awe or displaying the power of an empire, great works of architecture went beyond mere utility to reflect the shared expression of time and place. Modern architecture, with its right angles and smooth surfaces devoid of ornamentation expressed the early 20th Century zeitgeist of efficiency and mass production. In many ways, the Modern architectural language also conveyed common cultural values of the time as it became the model for socialist utopia.

The information technology revolution of the late twentieth century changed the role of architecture forever. With digital information readily available at our fingertips, buildings are no longer needed as a communication device. This new paradigm has largely gone unnoticed by the architectural establishment, which itself has been through a series of futile stylistic phases in recent decades ranging from the campy Postmodernism to the cynical Deconstructivism. The soul-searching continues today, as leading architects promote the use of technology to justify the creation of wild, superfluous forms that are for the most part nothing more than self-referential, sculptural contortions.

Function still matters, but building design often no longer serves the higher aim of communicating a shared culture to a civic audience. Rather, it is the mobile IT products created by companies like Apple that do a superior job of communicating and transferring information while at the same time filling a human desire for great design.

The implications for urbanism are enormous. Cities, as they are thought of in the traditional sense of high-density concentrations of people and buildings, are no longer required for a productive economy. No other place represents this new reality better than Silicon Valley. Rather than being an exalted futuristic urban landscape as one might expect given the amount of innovation that goes on there, Silicon Valley is a non-descript amalgam of low-density suburban villages. The headquarters of internet giants like Google, Yahoo! and Facebook are just as anonymous—bland office parks that turn inwards and are indifferent to the street.

Los Angeles Times architecture critic Christopher Hawthorne blasts this reality in a critique of the proposal for the new Apple headquarters, which he calls a ‘retrograde cocoon.’ The proposal is a huge four-story concentric ring set among a park-like setting in the Silicon Valley town of Cupertino which Hawthorne laments as what he sees as the continuation of an unfortunate land-use pattern of low-density sprawl.

Urbanists cannot afford to ignore the fact that technology is unsympathetic to architecture. Computer programmers and IT innovators, people who require countless hours of focused concentration, might actually prefer the pastoral landscape and low-key nature of Silicon Valley to the noisy and bustling urbanism that define what we traditionally think of as a ‘city’. Taking this into consideration, the new Apple HQ is an appropriate design for its purpose and also serves as reminder of the irrelevance of architecture in the twenty-first Century.

This essay originally appeared in the architecture journal CLOG: APPLE

Adam Nathaniel Mayer is an American architectural design professional currently living in China. In addition to his job designing buildings he writes the China Urban Development Blog.

Silicon Valley's Working Class Walks Tightrope

Andy Sywak — Thu, 28 Aug 2008 18:27:35 -0400

It may be home to Google, Cisco, Oracle and the other gleaming companies of the New Economy, but times are tough for the Silicon Valley's working class.

"Working people in Silicon Valley are walking an economic tightrope, and any unexpected medical bill or even a car breakdown can push them over the edge."

What happens to a community like this when the working class can no longer afford to live there?