Location matters. Startups leaving the suburbs and locating in city centres

The book Pastoral capitalism helped me to connect some dots between the expansive model of suburban sprawl around technology parks and industrial buildings and the hypothesis of the comeback of cities as productive spaces. On one hand, the crisis has highlighted the failure of the expansion of land use for industrial or tertiary activities in the suburbs. This approach triumphed as a spatial resolution for the generation of large areas of concentrated production and it had a consequent impact on land consumption and, above all, leading to a strong investment needs to provide these new areas with public infrastructure and services (mostly favoring infrastructure for private vehicles and an under-provision of public transport services for the movement of workers to these workplaces in the suburbs). These spaces have also been designed primarily to accommodate headquarters and campuses of large corporations, even building their own "cities" (offering a fake sense of urban environment for employees).

The generalisation of this industrial landscape is covered in the book by Louise Mozingo, focusing on the United States situation, and has traced a common path in other parts of the world with their own urban, historical, cultural and economic structure particularities (another good reference is the recent work by Alexandra Lange, The dot-com city. Silicon Valley urbanism). This spatial single-use concentration and specialisation has shaped not only our landscape but the spatial organization of urban economies. Global and local economies undergoing profound changes and this suburban specialization of activities in the outskirts of city centres might be in cuestión nowadays.

Tech City Map London

Some recent moves point to a new path in preference for startup location working towards a trend that probably will not turn into mainstream for any industry. However, it is starting to make sense for some of them. Pinterest left Silicon Valley to relocate their offices in downtown San Francisco, following other tech companies such as Twitter, Pulse or Zynga that are doing the same and locating their premises in the city centre instead of Palo Alto, Cupertino, San Jose and surrounding areas. Considering only for this analysis Silicon Valley as a peripheral location (which in fact is a reductionionist view of the most complex structure of the San Francisco city-region), these cases may indicate that the most characteristically urban area in the region, San Francisco, is gaining appeal for this particular profile of companies, seeking not only lower rental rates but, and this is the hypothesis, tangible and intangible atributes that only an urban center can provide. In fact, California is not the only case. Chicago is also witnessing how companies like Motorola, BP Amoco and United Airlines have already decided or are planning to move into the city center. Trends like this are also taking place in other cities worldwide and even local economic development strategies are considering this return to the city centres as productive hubs (see New York or London cases).

This process of rediscovering the central urban areas as a suitable location for headquarters makes sense. As mentioned earlier, in the case of startups and entrepreneurial projects with a high component related to creative industries, digital businesses or R&D activites and the widespread movement of urban incubators, business accelerators, co-working spaces and, in general, new flexible work and interaction spaces are fostering this ecosystem of urban innovation. The dream of kicking-off a project in a small office at the new technology park on the outskirts of the city is no longer a first option for entrepreneurs.

The geography of startups. The Economist

Anyhow, what are these features that might make it more attractive to locate an entrepreneurial, technological or creative project in the center of a city? At the end of the day, all these industrial parks, were not exactly born to flee the city centers? Is it decisive where we locate our project? Suburban location served to give uniqueness to company headquarters and campuses outside the confusing and conflictive urban centers. This provided employees with a pastoral landscape and open space, creating a spatial specialization and even an iconic symbol of power. Over time, this has led to counterproductive isolation. Technology parks are an example which explain how suburban business location offers great advantages in terms of affordable rent or purchase prices of land and buildings, and common facilities availability. It was normally the easiest place to go when creating any business project or a technology-oriented service.
However, this location has increasing disadvantages compared to urban centers where compnaies may find many more opportunities for social interaction and ideas hybridization with companies and professionals from other fields, allowing serendipity and accidental innovations, proximity and concentration, access to a more dynamic and versatile environment and, in general, more close involvement in the diverse and complex city life as agent provocateur of new ideas and solutions. The startup genome needs an urban ecosystem to succeed and geography still matters.