Does Congress want more Silicon Valleys?
There is no doubt that numerous cities across the United States are on the path to become tech hubs that promote the American dream of entrepreneurship. One region that is experiencing this fast-paced growth is the Midwest with cities like Chicago, Pittsburgh, and Columbus leading the way. Columbus is a major benefactor of this growth. Venture capitalists injected over $2 Billion into the city over the past 20 years, particularly in healthcare and insurance startups, according to Crunchbase data.
This growth in the Buckeye capital is reflected in many other tech hubs across the nation, but the Midwest offers several things that are not easily accessible in other tech hubs like Silicon Valley. Affordable housing and education, coupled with reasonable salaries for hiring are just some of the benefits that tech companies and employees realize in the Midwest. They also have access to talent pipelines from universities that are often underrepresented at tech giants in Silicon Valley. These economic developments are welcomed by all, of course? The short answer, well maybe.
In January, Intel announced their plans to invest $20B to build a semi-conductor chip manufacturing campus in New Albany, OH right outside of Columbus. It is a tribute in part to the efforts of our local civic leaders, elected-officials, State government, Congressional members, Senators, corporations, educational institutions and countless others that worked to develop the winning package. In the months that have followed, the company has made slow advancements in the construction process. Why, you ask? Delayed Government funding.
Intel is just one of numerous companies waiting for Congress to pass a $52 billion incentive package for chip production and research before committing to significant expansion efforts. A majority of these companies anticipated getting part of their funding from the subsidy package, which early on had bipartisan support in Congress and has been backed by the Biden administration. American chip-making capacity has fallen to 12% of the world’s total from 37% in 1990, yet this seems to be of no urgency. Across the pond, other governments are making swift moves to capitalize on this opportunity being created by the delay.
The European Union is committing the equIvalent of $43 billion to support the semiconductor industry in the trade bloc as it aims to double its share of chip manufacturing to 20% by 2030. Companies in the United States, such as Intel, are taking note of this as they move on plans of building manufacturing plants in Germany and France. As tech has become the natural stimulus for our economy, this act of foot-dragging begs the question of whether or not the United States urgently supports the growth of tech in the United States outside of Silicon Valley.
While congress has moved slowly in contributing to the growth of Midwest tech hubs, local governments are finding ways to attract top talent for the tech companies that call the Midwest home. Local governments are offering people willing to move up to $12,000 in cash, along with subsidized gym memberships, free babysitting and office space while allowing them to maintain their previous job in a remote capacity. In my opinion, I view this as a “foot-in-the-door” sales mentality. According to the Bureau of Labor Statistics, the average employee stays with a company for 4.1 years. By enticing high-skilled tech workers to move these growing tech-hub cities like Columbus and Pittsburgh are able to position themselves as a waiting room for a tech worker’s next opportunity. As more companies begin to allow many their employees to work remotely, it is a crucial time for cities to recognize how they can position themselves to succeed through future growth. We can only hope that the federal government will recognize the great migration to the Midwest for talent in tech.