The Technology-Friendly Hubs of the Future: Where Will We Congregate?
The Covid-19 induced exodus of technology folks from San Francisco to the rest of America, from Bangalore to the rest of India, and from London to the rest of Europe marks the beginning of a ubiquitous trend occurring across continents — digital connectivity is allowing humans to opt for the path of least resistance. Historically, humans have sought to reside and raise offspring in communities that are welcoming, supportive, and in line with their values. So it comes as no surprise that when these values are compromised and better options emerge, they seldom hesitate twice to pack up their belongings and congregate elsewhere.
As humans become more technologically advanced, they tend to assemble in hubs that are also technology-friendly, open-minded, and digitally elastic (ability to keep up with the changing pace of innovation and rules of engagement). This goes back to the origin of urban centres to the more recent rise in people flocking to Austin and Miami. The underlying trend holds.
So that brings us to the question: What are the boundary conditions for predicting this human behaviour?
And more importantly, how can it be engineered?
The factors that people consider include:
Economic — Cost associated with an activity or interaction
Political — Immigration and Tax Laws
Sociological — Sense of community
Legal — Protection under an enforceable and codified law
However, the other factors ultimately feed into the economics. Let me explain.
Just like with BTC, the most pressing variable of concern is the economic incentive structure that underscores technological progressiveness. I believe these economic incentives can be broadly categorised into three buckets — cost of living, cost of innovating, and cost of community. The cost of living is a simple mathematical calculation that can be indexed for each major city in the world. In this regard, people should arbitrage this index to their advantage without compromising on internet infrastructure, law and order, and individual human rights.
In today’s world, most companies require their employees to reside in the same time zone that the company is operating based out of (with the exceptions of international outsourcing, overseas sales, customer support, etc.). Therefore, the factors that constitute the cost of innovating in a particular location include: the cost of hiring top talent, the immigration laws, and the technology literacy of the surrounding market. Keeping this in mind, cities with a meritocratic process to develop software talent in house or incorporate foreign talent into their workforce with urgency hold a competitive advantage over the rest of the world.
The third and final bucket people should consider is the cost of community, which includes the quality of life, a focus on sustainability, and the interaction hurdle rate for community engagement. Listed below are a few of the cities that have optimised the economic functions I have spoken about to develop a burgeoning technology landscape. These include:
Lisbon, Portugal — Lisbon has been touted as the silent cradle for blockchain innovation in Europe. With a high per capita ratio of engineers in comparison to some of its European peers and favourable residency pathways, the city is well positioned to lead the European charge in decentralised innovation (BEPRO Network). Plus, the city’s pastel coloured buildings and maritime weather are an added plus!
Chennai, India — Chennai is home to India’s leading engineering college that has a strong track record for innovation. With extremely able software talent available at reasonable prices and a progressive ministry at the State level, the city is poised to unlock innovation across the board. The delicious local food is an added plus!
Montevideo, Uruguay — “Uruguay became the first country in the region, by a long way, to introduce computer science degrees — just two years after MIT” — Financial Times. Additionally, the country’s Head of Industry, Energy, and Mining is a very carbon-forward and sustainability-minded politician, a rarity in the region. There is a definite buzz about this place and technology folks are taking notice (Link)
Warsaw, Poland — Warsaw University of Technology has been a steadfast way for members of the Polish workforce to up-skill themselves in technology. A lot of hedge funds are taking advantage of this talent arbitrage to solidify the superiority of their trading algorithms.
The reordering of the global population density function presents an opportunity for people to vote with their feet. The leaders of our world today are sending out perceptible signals, both through their words and actions, as to how they plan on governing going forward. And people are beginning to pay attention.
The tailwinds of increasing digital penetration and remote work have catalysed the willingness and ability of people to change their coordinates of residence. However, I foresee a few challenges in the short term that could disrupt this reordering. The most obvious one being — a lot of companies are forcing employees to return to their physical office spaces upon vaccination. The second one — the asynchronous model of work has not yet received widespread adoption leading to time zone restrictions for employees. And lastly, the cultural cost of moving to new countries is still high, and often a barrier for people considering moving overseas.
While we do fantasise about a truly borderless and decentralised global economy where people are hired based solely on their proof of competence rather than where they are based out of — we are still a little while away from this destination.
Covid-19 has undoubtedly accelerated the separation of the technologically progressive jurisdictions from the rigid ones.
And the future is bright for those who can keep up with the changing technology.