Tech Companies Are Moving East: Why the MN Tech Corridor Tops the List for Site Selectors
27 Feb 2020
Tech companies are moving east from California and discovering that the MN Tech Corridor is an ideal location for their headquarters or expansion. There are numerous reasons that tech companies are leaving Silicon Valley, including: high cost of real estate, challenges finding affordable talent, taxes, and California’s high cost of doing business. In the last few years even major tech companies like Google and Apple have headed east and are investing billions outside of California.
What is driving the move from California?
In many cases, it comes down to talent. "Talent is at the top of the list of things tech companies are looking for when deciding where to locate and expand their operations," said Moody's economist Mark Zandi.
This need for talent has led tech companies to consider the MN Tech Corridor. An area located 20-minutes from the Twin Cities metro, the Corridor offers access to one of the highest concentration of graduates in the United States - many of them with technical training. In fact, over 10,000 students graduate with STEM training every year. As an added benefit, tech jobs pay less in Minnesota than they do in Silicon Valley, allowing growing companies to secure top tech talent at a cost savings. This in turn makes it possible to hire even more talent and continue to grow the company.
Why Tech Companies are Looking at the MN Tech Corridor
Site selectors and tech companies are interested in the MN Tech Corridor due to the availability of local talent, and also for the following -
#1 The MN Tech Corridor has abundant, affordable real estate
Tech companies in search of a large piece of property for a headquarters or data center can easily find it in the MN Tech Corridor. Premier sites are available and all premier sites have the necessary utility access, competitive speed to market, and feasibility for a variety of project needs. Many of these sites are adjacent to the interstate and 30-minutes from the airport. In addition, the Twin Cities is less than 30-minutes away. Even with these conveniences, commercial property is more affordable in the MN Tech Corridor than it is in major metros. For example, 27 acres in Hugo is listed for only $1.2 million.
#2 Low energy rates are ideal for data centers and tech companies
Energy rates are low in the MN Tech Corridor and that can result in a significant cost savings for tech companies, data centers in particular. WIth the rate to cool buildings low, data center can locate here and significantly reduce their operating expenses when moving from the west coast. 100% renewable energy options are also available for companies seeking to reduce their carbon footprint.
#3 Low cost for businesses and employees
The cost of doing business is lower in the MN Tech Corridor than on the west or east coasts. It is also more affordable to live here. This means that employees spend less on things like housing, which may improve their quality of life. When the cost of doing business and living is lower, this means that a business has more options in where to allocate capital.
#4 Financial incentives
Financial incentives are available for tech companies locating in Minnesota and the MN Tech Corridor. Companies who are interested in incentives are invited to contact us to discover which ones they qualify for. Options include the Angel Tax Credit, Data Center Sales Tax Incentives, Minnesota Job Creation Fund, Research and Development Tax Credit, and Tax Increment Financing.
#5 Strong collaboration between local and regional economic development groups
The MN Tech Corridor offers businesses an intangible benefit as well - a collaborative environment in which to grow. The strong collaboration among regional stakeholders, governments and economic development groups means that companies have a group of influencers actively working to support them, while also finding creative solutions to any challenges. This is the opposite of government bureaucracy. This is true support.
Tech Companies - Look East Towards Minnesota
You don’t have to go all the way to the east coast when leaving Silicon Valley. Stop in the MN Tech Corridor to experience the benefits of locating near top tech talent at a fraction of what you would pay in California. Contact us today for more information.