Majority of tech leaders expect Silicon Valley to be eclipsed in next four years
Of 740 leaders surveyed in in KPMG’s seventh annual Global Technology Industry Innovation Survey, 58% said Silicon Valley won’t be the tech innovation center of the world in four years.
This is the first time in the survey’s history that global tech leaders have predicted Silicon Valley would not remain the center of the tech world. The insight isn't quite as shocking as it seems - there has been an ongoing trend of tech-related firms setting up shop elsewhere in the past few years.
"The belief that Silicon Valley will be displaced as the leading hub underscores the continuing decentralization of technology innovation spurred by investment in other cities and regions globally, as well as contributing factors in Silicon Valley," Tim Zanni, KPMG Global and US technology leader, said. "Several much-discussed factors ranging from the cost of living to an overmatched infrastructure to questions about corporate culture are contributing to the perception that Silicon Valley may not continue to dominate tech innovation in the coming years."
There are several reasons for this. Rent is too high. People are growing tired of Silicon Valley "tech bro" culture. There is too much traffic and not enough public transportation. Companies are also eager to avoid California’s relatively high business taxes.
Survey respondents saw New York as the top global tech innovation hub outside of Silicon Valley in the next four years. While expensive, the city checks a lot of boxes on the list of elements KPMG says a city needs to be an innovation hub, including a pipeline of skilled talent, an urban locale with which to attract young people, positive demographic trends, research universities, available investment funding, and a history of successful start-ups.
The survey, however, was conducted in December and January, before Amazon announced it was backing out of its plans to put half of HQ2 (and 25,000 tech jobs) in the city's borough of Queens.
Boston and Austin, meanwhile, tied for ninth on the list. Washington, DC moved to thirteentn, buoyed by the Amazon secondary headquarters project, which for now still has the go-ahead.
Beijing ranked second after New York; Tokyo and London tied for third; and Shanghai and Taipei tied for fifth. Singapore and Seoul rounded out the top performers, at seventh and eighth, respectively.
The KPMG survey also found that other countries are closing the gap on global tech innovation leaders: the US and China. Though the US maintained the top spot as the most promising market for global tech innovation and breakthroughs, the country this year dropped its share of respondents from 34% to 23%. China remained in second place, though its share dropped from 26% to 17%.
The US and China were voted the top two countries by 60% of respondents last year, compared to this year's 40%, pointing to a perceived decentralization of tech dominance.
The UK rose to third place in the ranking (9%), displacing India, which fell to fifth and was tied with Singapore, holding a 5% share of respondents. Japan came in fourth with 6%, while Germany, South Korea, Israel, and the Netherlands rounded out the top 10 with 4% each.
