Silicon Valley has enjoyed the status of being the epicenter of the tech industry for many decades but now that’s changing.
With the unprecedented development of the Silicon Valley in the past few decades, it has invited some of the highest housing costs in the area, coupled with higher taxes and other strict regulations, it has become uneconomical for businesses to operate there when states like Texas are offering tax incentives, more favorable tax laws and a higher quality of life for a relatively lower cost of living.
Texas is turning into a Nirvana for the tech industry.
Why are many businesses leaving California in record numbers?
According to a report from the Hoover Institution more than 13000 businesses have moved out of California in the tenure of 2009-2016, which turns out to be around 1800 businesses per year. Which is an alarming number of businesses moving out of the tech hub and settling into other states which offer tax incentives, lenient tax laws and comparatively lesser living costs, consequently more profit margins, financial benefits and higher standard of living paired with a vibrant community known for its hospitable nature.
Where Are the Tech Companies Going?
The Tech companies are moving out of the Silicon Valley and settling into Texas and Florida among other places. Texas is being projected to be the next tech hub as it stands. Within Texas, Austin is the most popular destination for tech giants. It’s the place where tech CEOs are looking to be. Austin, Texas is being referred to as “Silicon Hills” due to the movement of some tech giants and industry leaders like DELL and Advanced Micro Devices.
According to the Austin Chamber of Commerce’s figures; as of November 2020, more than 35 companies have relocated and started operating in Austin area in single year and their number is increasing over time.
Top 10 Big Companies Moving Headquarters from Silicon Valley to Texas
Following the Exodus trend, Oracle which was founded in 1977, has also announced its plans for moving its Headquarters from Redwood City, California to Austin, Texas in the coming year. Although Oracle will be keeping some of it’s operations in California.
TESLA CEO Elon Musk is building a 4 million square foot facility near Austin in the coming years as he announced late in 2020.
3. Hewlett Packard Enterprises
HP- one of the first building blocks of the Silicon Valley, which traces its origins to 1938 from Palo Alto,California is also moving out of California and planning to settle in Austin, Texas.
4. Charles Schwab Corporation
The Charles Schwab Corporation has announced that its HQ is being moved to North Texas in Dentan County on Jan 1st 2021.
The CBRE group, one of largest real estate services company of US announced its plans to move its Headquarters from Los Angeles to Dallas ,Texas .
In September, Pabst brewing company announced that it was moving its Headquarters from California to Downtown San Antonio in Texas by Jan 5th, 2021.
Londondale’s Venture Capitalist firm is also moving it’s headquarters from Silicon Valley to Austin Texas as Co-founder of Londondale ‘s ; Lonsdale announced recently.
File Trail, well-known for its records management software for law firms also moved from California to Austin, Texas earlier in 2020.
9. DZS Inc.
The Telecom equipment firm also announced its plans for moving to Austin. This announcement came in earlier in the year 2020.
In January 2020, this online survey software firm announced its move from Bay Area to Austin, Texas as well.
Is it worth moving to Texas from California?
Texas is proving itself to be a worthy place for tech giants and other businesses to move to due to the virtue of its policies. Texas is one of the largest states of the US. And Unlike California, where the living costs are too high and Tax laws are too strict, Texas is proving to be haven for those willing to move.
It has many incentives for the businesses, making it worthy of a substitute for the Silicon Valley.
Benefits of Moving to Texas from California
Texas in comparison to California is offering many benefits, which includes but is not limited to; No State Income Tax, a much lower cost of living, a faster growing economy and a vibrant community which is well known for its hospitality. In comparison to California which has the highest state income tax rates in the country, Texas has no such tax in place at all.
The cost of living is also quite low in comparison to the extremely expensive housing market of California. Texas is also enjoying a much faster economic growth with Oil, Wine and Manufacturing industries booming.
Costs and Expenses
The cost of moving is highly dependent on the needs and requirements of a particular family or an individual moving to Texas. For each requirement there is going to be a certain cost associated with it. For luxurious requirements, the cost is going to be much higher. There are many economical options available here as well. The housing market in comparison to California is not as expensive, effectively much cheaper.
The major part of moving is the movement of possessions, belongings and other items and this is directly dependent on the weight of the objects. The more objects you move, the more it’s going to cost you to move them. There are packing and moving services available which cost as per weight and client requirements. But with a lot of belongings this option can be expensive.
The alternative option is to go down the DIY road and sort out and move your stuff by yourself instead of getting a premium packing service. If you have a small number of belongings, doing it yourself is a much feasible option. You can save on money and get crafty yourself. In case your belongings are a lot for you to handle, its better to get the premium service and save yourself from the hectic activity and the stress associated with it.
Another thing that’s quite notable is the time window of the movement. Moving in certain months may prove to be less expensive than moving during peak seasons, when the season is on. With high demand and lower supply, the rates increase and it gets difficult to find a suitable place with ease. Whereas in the off-season its much easier and comparatively less expensive to move. Best practice is to decide after looking at all the possible factors that may affect the movement and then making a decision which is most suitable and in terms of finances, more feasible.
Cost of Living in California vs. Texas
The housing market of California is known to be one the most expensive in the states. Whereas the housing market of Texas is relatively less expensive making it a viable option. This is the driving factor behind the lower cost of living in Texas. According to SmartAsset’s figures, a medium sized house in Texas costs around $166,374.
Consequently, the rents are much lower in Texas than those in California. In Texas, one-bedroom rental costs $844 in comparison to that of $1410 in California. Texas is ranked among the states whose utility costs, healthcare, food and transportation costs are below the national average.
Before moving to Texas everybody needs to be aware of the Driving laws of that state. The Department of Motor Vehicles of Texas has clearly mentioned its requirements and the application process for the new entrants. If you are moving to Texas from another state of the USA, you are legally allowed to drive for up to 90 days if you possess a valid driver’s license . After 90 days you will have to submit an application for the Texan driver’s license.
You will have to provide the following documents:
- Proof of Identity
- Social Security Number
- Proof of US Citizenship
- Proof of Texas Residency
- Evidence of Texas Vehicle Registration
- Proof of Vehicle Insurance
- Evidence of Impact Texas Driver (ITD) Completion and a 6-hour driver education course.
After arranging the required documents, you are eligible to apply for your Texas Driver’s License via the following steps:
- Complete you Driver’s License Application
- Visit the local license office
- Provide the required documents
- Pay the due application fee
- Provide the thumbprints
- Pass the vision examination
- Satisfy the testing requirements for Texas.
Reasons Austin is surpassing Silicon Valley as the next tech hub
Austin is positioning itself to be the next tech hub, surpassing Silicon Valley and there are many factors that are actively supporting it achieve it. The factor that is standing at the top is the availability of affordable housing for professionals and students who don’t make big bucks.
Austin is offering median housing costs and affordable lease rates for young professionals, students as well as businesses, making it a prime candidate for young people and businesses to settle in. Due to this factor, Austin was the second highest state based on its millennial population.
Which is a pool of young professionals and untapped talent to drive the industry and participate in economic growth. The quality of education as well as the vibrant culture of Austin is specifically quite alluring to the younger populace. 42.8% of the Austin workforce possesses a bachelor’s degree, which is quite assuring for Austin. With the tech giants coming into Austin the jobs are readily available and the industry is booming. With successful industrial activity the confidence of the investors is also improving resulting in an influx of Capital into Austin.
More investors are investing their capitals into the city. These factors paired with no state tax on income and lower operating costs, lead to the success that Austin is enjoying right now and making it the forerunner in surpassing the Silicon Valley and making its place as the next tech hub of the USA.
Should You Move Your Business to Texas?
With the booming industry, no income state taxes, inexpensive housing market, lower living costs and a vibrant culture, Texas is the place to be for the tech giants and the new tech startups to build their way up via the limitless opportunities that Texas has to offer. If you are considering to move somewhere other than California than you should look into moving your business to Texas and enjoy all the perks this state has to offer.
The bottom line:
From the points we have discussed above it’s eminent that Austin, Texas is the next tech hub for the USA and is a great place to be considering it’s socio-economic situation.
It has a lot of skilled human capital and with the right investors investing in Austin it’s on its way to limitless success and if you are looking to be in the tech industry or all already a part of the tech industry Austin, Texas is where you should be looking to work.