Technology

I think that California should take keeping itself competitive as a tech center more-seriously. I think that a lot of what has made California competitive for tech is because it had tech from earlier, and that at a certain threshold, it becomes advantageous to do more companies in an area -- you have a pool of employees and investors and such. But what matters is having a sufficiently-large pool, and if you let that advantage erode sufficiently, your edge also goes away.

We were just talking about high California electricity prices, for example. A number of datacenters have shifted out of California because the cost of electricity is a significant input. Now, okay -- you don't have to be right on top of your datacenters to be doing tech work. You can run a Silicon Valley-based company that has its hardware in Washington state, but it's one more factor that makes it less appealing to be located in California.

The electricity price issue came up a lot back when people were talking about Bitcoin mining more, since there weren't a whole lot of inputs and it's otherwise pretty location-agnostic.

https://www.cnbc.com/2021/09/30/this-map-shows-the-best-us-states-to-mine-for-bitcoin.html

In California and Connecticut, electricity costs 18 to 19 cents per kilowatt hour, more than double that in Texas, Wyoming, Washington, and Kentucky, according to the Global Energy Institute.

(Prices are higher now everywhere, as this was before the COVID-19-era inflation, but the fact that California is still expensive electricity-wise remains.)

I think that there is a certain chunk of California that is kind of under the impression that the tech industry in California is a magic cash cow that is always going to be there, no matter what California does, and I think that that's kind of a cavalier approach to take.

EDIT: COVID-19's remote-working also did a lot to seriously hurt California here, since a lot of people decided "if I don't have to pay California cost-of-living and can still keep the same job, why should I pay those costs?" and just moved out of state. If you look at COVID-19-era population-change data in counties around the San Francisco Bay Area, it saw a pretty remarkable drop.

https://www.apricitas.io/p/california-is-losing-tech-jobs

California is Losing Tech Jobs

The Golden State Used to Dominate Tech Employment—But Its Share of Total US Tech Jobs has Now Fallen to the Lowest Level in a Decade

Nevertheless, many of the tech industry’s traditional hubs have indeed suffered significantly since the onset of the tech-cession—and nowhere more so than California. As the home of Silicon Valley, the state represented roughly 30% of total US tech sector output and got roughly 10% of its statewide GDP from the tech industry in 2021. However, the Golden State has been bleeding tech jobs over the last year and a half—since August 2022, California has lost 21k jobs in computer systems design & related, 15k in streaming & social networks, 11k in software publishing, and 7k in web search & related—while gaining less than 1k in computing infrastructure & data processing. Since the beginning of COVID, California has added a sum total of only 6k jobs in the tech industry—compared to roughly 570k across the rest of the United States.

For California, the loss of tech jobs represents a major drag on the state’s economy, a driver of acute budgetary problems, and an upending of housing market dynamics—but most importantly, it represents a squandering of many of the opportunities the industry afforded the state throughout the 2010s.