Facebook, meanwhile, has more aggressively planned to let its workers work from anywhere. In May, after long emphasizing the importance of engineering hubs, Facebook CEO Mark Zuckerberg launched a new target of 50% remote work. The same month, Facebook unveiled a refreshed design for its new campus in Menlo Park, called Willow Village, with space for 3,400 workers and 1,700 homes. The company continues to expand its presence in other Bay Area cities, and Zuckerberg told employees Facebook still sees use for all of its current and planned space.
So what gives? Much of it comes down to simple math: The giants of Silicon Valley are growing too fast to loosen their grip on physical space – even if, in some cases, they want to. In the time of Zuckerberg remote work comments, internal investigations showed most employees were eager to return to the office, and Zuckerberg said the transition to remote work could take 10 years. Meanwhile, in the last year alone, Facebook increased its workforce by 13,000 people, mostly in products and engineering, bringing the total number of employees to over 58,000. Alphabet added 16,000 for a total of 135,000. These figures do not include the thousands of entrepreneurs who operate their campuses.
Deep in the pandemic, “it’s easy to lose sight of the big picture,” says Mark Muro, a senior researcher at the Brookings Institution, who studies how cities attract high-tech development. For decades, Muro searched for evidence of decentralization – the diffusion of talent and wealth enabled by the so-called “distance death. The idea was that technology would allow people to work from anywhere, which would make offices and cities less relevant. What we have was the opposite. Fast-growing tech companies have clustered in a few cities, as have what Muro defines as “innovation” jobs in science and technology. Other cities have grown and tech companies have grown elsewhere. But tech hubs like San Jose and Seattle just grows faster.
The latest wave of growth in these places has been broadly defined by Big Tech, but it builds on the benefits of the past, says Margaret O’Mara, a historian at the University of Washington who has chronicled the many suspected deaths of Silicon Valley since the 1950s. Today’s tech companies have grown out of the benefits of an unusual setting: universities, infrastructure, wealth and talent from the local semiconductor industry (itself fueled by contract lucrative government). These new businesses then applied the benefits of proximity to their workplaces. She highlights the early plans for the Pixar campus, when founder Steve Jobs crafted a single, centrally located bathroom bank. Point? A fortuitous innovation. (More bathrooms would be built.) Companies like Google would come to set the agenda for a generation of desks in which integrated benefits and services blurred the lines between work and life.
This focus on face-to-face collaboration has turned these growing offices into centers of gravity themselves – hubs for investors looking for Google talent, marketing companies that manipulate the Twitter logo, companies of manufacturing that help Apple to make new prototypes. Then there are the startups, which emerge and tap into the great pool of technological talent and are often absorbed there. Despite perpetual complaints about the Bay Area – its high costs and taxes, its social problems – this engine continues to run well. “It’s not just the proximity to big companies,” says O’Mara. “It’s the proximity to the ecosystem from which large companies come. The whole jam.
The pandemic has accelerated the evolution of ideas about proximity, but many were already underway before the pandemic, she adds. A natural consequence of success is that companies disperse. They are establishing bases elsewhere, often choosing relevant university centers for specialist teams, and perhaps larger centers in major cities with a wide range of talent. (Hence the recent buying spree of Amazon, Facebook and Google in midtown Manhattan.) Remote working was booming before the pandemic, especially among small businesses. For now, however, decamps tend to be the exceptions – often larger, older businesses that need to cut costs and cut costs. As Walesh of San Jose notes, his city’s most publicized pandemic departure – the HP Enterprise headquarters in Houston – was not a departure at all. Tech workers mostly stay; the difference is where the taxes are deposited.
With most people still working remotely, it’s hard to draw long-term conclusions, says Robert Sammons, director of research in the Bay Area of Cushman & Wakefield, a real estate brokerage firm. One thing we do know, he says, is that markets like San Francisco overheated before the virus. Costs were hardly a barrier for the wealthy tech giants, but small businesses were excluded, and even the largest companies struggled to find enough space downtown. Tech campuses were also evolving. They had become more dispersed, reflecting a desire to be closer to where people actually live. The new proposals have included more housing and less office space, often in response to pressure from communities facing skyrocketing housing costs, but also reflecting the changing needs of businesses themselves. Google’s San Jose project is typical of this model: closer to where many employees live, and every square inch of space doesn’t need to contain a desk.