The Stampede from Silicon Valley
By forcing knowledge workers to telecommute, the COVID-19 pandemic has laid bare many of the unnecessary tax and regulatory burdens that tech firms face simply because they are headquartered in California. State and local policymakers who want to prevent an even larger outbound stampede should take note.
STANFORD – The news out of Silicon Valley is that some of America’s most dynamic businesses are pulling up stakes and leaving. Hewlett Packard Enterprise, the firm started by Bill Hewlett and David Packard in a Palo Alto garage in 1939, is moving its headquarters to Houston, Texas, and the software giant Oracle has already relocated its headquarters from Redwood City, California, to Austin, Texas.
Likewise, Elon Musk, the CEO of Tesla and SpaceX, has announced that he, too, is moving to Texas, as is Joe Lonsdale, the founder of the data-analytics company Palantir, who is bringing his entire venture-capital firm, 8VC, along with him. Lonsdale is so disenchanted with the Golden State that he announced his move publicly in an op-ed for the Wall Street Journal headlined “California, Love It and Leave It.”
Of course, many economic observers had noticed this exodus long before it became a stampede. The talks I give for supporters of Stanford University’s Hoover Institution all used to be held in California, whereas now I find myself often traveling to Dallas or other cities, because that’s where many people have gone.