Cities & Communities
by Richard Florida
This article was published by SFChronicle
The answer is a qualified yes. The tech migration is not just a phenomenon of San Francisco – it’s happening in New York’s downtown Silicon Alley and East London’s once rundown and raw Silicon Roundabout. This emerging model of “urban tech” just seems to fit downtown San Francisco especially well.
For one, the city is filled with the dense, gritty districts where young techies increasingly prefer to live and work. San Francisco’s inner-city neighborhoods, some blighted and now transitioning, are a huge draw for this new generation of techies, who don’t want big, cookie-cutter suburban houses and prefer walkable areas that enable them to live close to their friends and the amenities they need. To capture these workers, Google has long run its famous daily bus between the city and the Googleplex in Mountain View.
The city’s urban center also is filled with easily repurposed and relatively inexpensive older warehouses and factory lofts, as well as industrial, commercial and other mixed-use buildings that companies can retrofit into the flexible, creative spaces to which this new breed of techies are drawn.
Case in point: The Mid-Market neighborhood. Just last year, The Chronicle noted that “Market Street was once a destination, featuring now-shuttered theaters with lights so bright, the street was dubbed the Great White Way. But the glory faded into disrepair in the 1960s, when the street was torn up for construction of the Bay Area Rapid Transit system. Now, it’s best known for homeless people, drug deals and the stench of urine.”
A year later, it’s home to Twitter’s headquarters in a formerly vacant 1937 Art Deco landmark.
These neighborhoods and districts also enable companies to draw on the amenities – coffee shops, restaurants, take-out shops, food trucks, dry cleaners and gyms that tech workers require – without having to put them and pay for them on campus. Apple’s San Francisco flagship is open seemingly 24/7 to serve just this group with their flexible hours and blending of work and after-work life.
San Francisco’s neighborhoods have the additional advantage of public transit – BART, Muni Metro, buses and cable cars – that enable workers, customers and residents to get around without owning a car. They also provide the urbanity and lively street culture that bring people together, encouraging serendipitous interactions.
When smart people rub together in different groupings and places, they spark new ideas, which ultimately generate even more startups. Surprisingly, as expensive as it is, San Francisco offers would-be entrepreneurs a significant cost advantage over Silicon Valley.
Office space for tech companies runs $3.55 per square foot per month in San Francisco compared with $5.78 in downtown Palo Alto, $4.81 in the Palo Alto-Stanford Park area and $5.21 in Menlo Park, according to figures from real estate firm Cushman & Wakefield reported in June on Gigaom.com.
This is partly due to its supply of older industrial and commercial buildings that can be redeveloped into high-tech offices.
For all these reasons, San Francisco has emerged as a high-tech power, closing in on and in some cases overtaking its well-established neighbor. The San Francisco metropolitan area ranked third in my ranking of America’s high-tech metros, trailing only Seattle and Silicon Valley. And it placed second, behind Boulder, Colo., on my overall creativity index, which assesses regions on the “3Ts” of economic development (see box). And it topped the list of venture-capital investments in 2011, with $8.6 billion compared with $6.9 billion for Silicon Valley, according to data from the National Venture Capital Association.