More techies are leaving Silicon Valley than are arriving. This trend applies to several tech cities including San Francisco, Los Angeles and San Diego, which all experience net out-migration. With few apartments renting for less than $2,100 per month and almost no homes for sale under $700,000, housing is becoming too pricey for many workers in even in well-paying corporate tech jobs or well-funded startups (Fannin, 2017). But where are tech workers going? Data shows that Seattle, Portland, Phoenix, most of Florida, Austin and Dallas experience net in-migration (Beall, 2017). Because of the rise in real estate prices, people are moving away from expensive cities in the Bay area to places with active job markets and more affordable costs of living. Silicon Valley’s loss in population is these cities’ gain. For example, Seattle’s Eastside is home to many tech companies and is the fastest rising  housing market on the West Coast, but housing prices in Seattle are still less than half the cost of the Bay Area. There is also a growing trend of tech workers who work from home remotely to avoid the high costs of living in the Bay Area (Beall, 2017).

The housing crisis is not the only reason Silicon Valley is losing status as the world’s innovation capital. There is also the visa issue, which causes the Valley’s finest tech talent to return to home countries like China and India. On top of that, Europe is dethroning Silicon Valley. In a lot of respects, Europe is a better place for startups than the Valley. It is crucial to understand that Europe is not a large monolithic block, but rather a collection of small countries with their own strengths and weaknesses. To illustrate this, take a look at Germany, where different cities have their own local expertise; Berlin focuses on IoT and FinTech, Dortmund on Logistics and Karlsruhe on AI (Maack, 2017). The Benelux region, the Nordics and the Baltic countries generate as much as eight percent of GDP from information technology and Facebook, Microsoft, Amazon and Google are eager to acquire European tech companies (Hughes, 2017). European tech companies often start in small countries with a focus on the domestic market, before expanding abroad. The founder of Blendle, an online news platform, explains that by starting in the Netherlands he was able to perfect his product and business model, before expanding to other countries. Another benefit of the European startup scene is the free movement of people and the opportunities to relocate. This means that tech workers can easily position themselves to leverage funding opportunities and low costs of doing business. Also, European startups can take advantage of the institutional support coming from the European Union and governments. Over the last couple of years a number of Tech City and Digital Hub initiatives have been launched to support the local startup ecosystem (Hughes, 2017).

Amsterdam is Europe’s powerhouse for AI, nanotechnology, FinTech, VR, energy efficiency and startup culture. The Dutch capital specializes in electric vehicles, aiming to ban gas and diesel cars by 2025. It is home to over 578 international IT companies. Amsterdam is famous for having Europe’s fastest broadband speeds, it is ranked fourth globally in app invention and development, and it is the gateway to Europe and beyond thanks to its well-connected transport links via land, water and air (Iamsterdam, 2017). World-leading data-centres like AMS-IX, Equinix and AM4 are located at the Amsterdam Science Park, which is dubbed as the world’s largest internet hub. Besides the presence of Silicon Valley companies like Google, Uber and Cisco, the city is also home to successful homegrown companies like TomTom, Booking.com and WeTransfer, and startups valued over one-billion dollars, like Adyen  (Iamsterdam, 2017). The city also has an impressive investment funding landscape. Amsterdam-based startups received funding of €194m in 2016. Whereas the Valley experiences a housing crisis, Amsterdam is known for its healthy work-life balance and village-like atmosphere.

Like Kevin Rose said, it is a myth that tech startups and tech workers need to relocate themselves to Silicon Valley in order to become successful. Take advantage of Europe’s sustainable growth, long-term vision and homegrown tech talent pool.

Sources:

Beall, G., 2017. Techies are leaving San Francisco, but where are they going?.
https://thenextweb.com/contributors/2017/10/03/techies-leaving-san-francisco-going/#.tnw_ihfd5Huj

Fannin, R., 2017. Silicon Valley Is Hotter Than Ever But Risks Losing Status Due To Sky-High Prices.
https://www.forbes.com/sites/rebeccafannin/2017/07/21/silicon-valley-is-hotter-than-ever-but-risks-losing-status-due-to-sky-high-prices/#7f74a4fb1b8a

Hughes, M., 2017. Europe isn’t the new Silicon Valley. It’s better.
https://thenextweb.com/eu/2017/05/22/europe-isnt-the-new-silicon-valley-its-better/#.tnw_xT7rIaRw

Iamsterdam, 2017. How Amsterdam is becoming the new Silicon Valley.
https://www.iamsterdam.com/en/business/news-and-insights/news/2017/how-amsterdam-is-becoming-the-new-silicon-valley

Maack, M. M., 2017. How Europe’s biggest economy is uniting its tech hubs to dethrone Silicon Valley.
http://www.businessinsider.com/europe-overtake-silicon-valley-2017-6?international=true&r=US&IR=T