Today I published an article in Project Syndicate called “The Stampede from Silicon Valley.” The fact-based message of the article is clear: Tax, regulatory, and other economic burdens that firms face in California are creating a stampede to other parts of the country—especially Texas. There are many examples–Hewlett Packard Enterprise, Oracle, Tesla, and even venture-capital firms like 8VC, who announced the exodus with an WSJ op-ed. State and local policymakers, who want to prevent an even larger outbound stampede, need get to work. There are some positive signs to build on, such as the California voters’ approval of Proposition 22, which frees up gig workers, and the voters’ rejection of Proposition 15, which would raise taxes on business. As one of the recent departures from Silicon Valley recently told me, “I still love California and hope to help fix it.” Well, now is the time.
In fact, also published today was a front page story in the Wall Street Journal telling the same stampede story from the perspective of Austin, one of the go-to cities in Texas. Headlined, ‘Startup City’: Breakneck Growth Strains Austin,” the article tells the story of the arrival of the same firms: Hewlett Packard Enterprise, Oracle, Tesla, and other firms such as venture capital firms like Atomic. The concern from the Texas side is to keep economics competitive while preventing some of the crowding effects of higher growth and land use regulations with added problems like homelessness and forest fires.
Let us hope that good competition leads to better economic performance both in and out of Silicon Valley and Austin. Indeed, some of the reaction I am getting to my Project Syndicate article warns of the failure to reduce economic burdens in the United States as a whole versus other countries, which may make the United States less attractive for business and income growth going forward. And to be sure, there are even a bigger problem globally if less emphasis is paid to economic freedom. There is work to be done in all parts of the world.