With big names like Oracle, Palantir, and Hewlett Packard Enterprise leaving Silicon Valley for good, California’s status as America’s tech hub could be coming into question. The shift to remote work created a wealth of new possibilities; tech professionals are taking advantage of the new standard of flexible work by relocating to more affordable areas.
For these individuals and their companies, the Midwest’s low cost of living and affordable commercial real estate makes it the perfect spot to settle. The central location of the Midwest also makes it an ideal place for doing business in the U.S., and the average median home price across Nebraska, Missouri, Iowa, and Illinois was just $163,825 in 2021 — less than a third of what buyers might expect to pay in California and less than an eighth of the median home price in San Francisco.
Soohyung Kim started making waves in 2013 when Institutional Investor named him one of the rising stars of the hedge fund world. He founded his hedge fund, Standard General, in 2007 after a career at Bankers Trust Co and Och-Ziff Capital Management Group, where he helped launch its fixed-income business. In 2005 he co-founded a Read More
Top Talent And Tech Companies Are Moving To The Midwest
The cost of starting a business or hiring top talent is quite affordable in the Midwest, which is why companies like Tallyfy and Scollar relocated. Top talent and tech companies leaving Silicon Valley in search of greener pastures should consider moving to the Midwest to take advantage of these qualities:
A Favorable Business Environment
California’s corporate tax rate of 8.84% is more than double the 4% and 4.31% tax rates you’ll find in Missouri and North Dakota, respectively. From the moment companies move, their businesses could see improved operating margins. And without the fierce competition for top talent that takes place in Silicon Valley, they can pay far less for talent than they would in an expensive coastal city while still offering employees proportionally higher compensation and a better lifestyle.
Improved Quality Of Life
Not only are houses more affordable in the Midwest, but they’re also bigger. The average home in San Francisco is 1,150 square feet, while the average home size in Kansas is 1,782 square feet. Additionally, eight of the 12 Midwestern states rank among the lowest in the nation for cost of living, according to 2021 data.
If you’re worried about missing out on the cultural aspects of California, think again. The Midwest boasts three of the top 10 zoos in the U.S. and noteworthy museums like the Art Institute of Chicago and the Rock & Roll Hall of Fame in Cleveland. No matter what you’re into, there’s something for everyone.
Existing Innovation Infrastructure
The Midwest is packed with Fortune 500 companies: auto giants such as General Motors and Ford, insurance juggernauts like Allstate and State Farm, and agtech titans like Bayer. There’s innovation happening in almost every industry. These major companies draw talent and investment to the region, but there are also plenty of accelerators with entrepreneurs just getting started. Chicago’s Future Founders is a fantastic example; the program is chaired by Uptake Technologies founder Brad Keywell — the EY World Entrepreneur of the Year in 2019.
Great Outdoor Opportunities
The Midwest is full of adventure; all you have to do is walk outside. Rivers and lakes offer opportunities for fishing, boating, kayaking, and canoeing. The Lake of the Ozarks in central Missouri, for example, offers more shoreline (1,150 miles) than the entire coast of California. Large parks and forests throughout the region also encourage people to camp, bike, or hunt.
The Midwest is also home to some of the most beautiful national parks in the country — parks that are free of the crowds that you might find at Yosemite. The National Park Service website warns of hour-plus delays at Yosemite’s entrance and two- to three-hour waits in the valley itself. Instead, you could visit Mount Rushmore in the Black Hills of South Dakota (which easily accommodates more than 2 million people per year).
The location of the next major tech hub is going to boil down to economics. Companies are looking for low tax rates, less red tape, top talent, and reasonably priced real estate. The Midwest meets all these criteria and more, creating an environment where businesses can flourish. If you’re thinking about moving to the Midwest, the heart of America is ready to welcome you with open arms.
About the Author
Subash Alias is the CEO of Missouri Partnership, a public-private economic development organization available to assist businesses today, in six months, and in six years. Missouri Partnership is an expert resource to support companies’ site selection needs when the time is right to look at Missouri.