Back in the '70s, in San Francisco bay, the main product produced was silicon transistors, which were used worldwide in all microprocessors. That is how we got the notorious name: Silicon Valley. Also, back in the '70s, if you asked any primary school kid what they wanted to be when they grew up, the typical answer would be a firefighter, a police officer, a doctor, etc. If we asked the same question to the same audience, but 40 years later, there's a big possibility to hear them say: I want to be an entrepreneur, a business owner, someone whose company is in silicon valley.
It became a trope of some sort; to be in silicon valley meant your company has achieved the maximum capacity of success. But, meanwhile, little ol' Europe snuck up on the big USA and changed the game. So even though the name remains in the US, the actual birthplace of major start-ups and big tech companies changed its location from one continent to another.
We all know the names of giant companies that silicon valley always boasts about: Google, Apple, Facebook, you name it, they made it. But if it's all so fine and dandy, why are some companies moving away from silicon valley and entering the European market?
Apart from the success cases of Silicon Valley, as with all resources, we think it's feasible to say that it's depleting. Everything is comparative, so considering the new competitor, all that remains of silicon valley is the trope we've already mentioned. The saying has been going around that: "Europe is the new Silicon Valley," and they aren't far off, considering the numbers: Europe has garnered more than $100 billion last year alone, and considering the year 2021 was, it's an awe-inspiring result. It's expected that this year, the number will grow significantly because Europe is not a new player on the market; booking.com and Spotify are proof of their success in tech.
Is that why Elon(a) decided to migrate to the company's HQ in Europe? We think the untapped marketplace, the source of talent, and new players make migrating a good decision, but Tesla is not the sole case. More companies are migrating from the US to Europe, so let us explain the primary reasons behind this migration:
While traveling may have been a hassle these few years, the opposite can be said in the digital space: Geographical restrictions were lifted, and more companies decided to expand their hiring horizon. More companies are tapping into the unexplored resources of talent Europe has to offer; moreover, the young developers and marketers from the eastern side of the world have gained worldwide attention for their skill + hourly rate ratio. When you're working on a web or app development project, the costs can easily hit a few hundred thousand grand (Yes, that's more than a few zeros). Keeping this information in mind, the European side of the talent pool offers the same service for lower prices; that is why outsourcing became one of the best ways to hire talent. Countries such as Poland, Sweden, and even the far eastern European country of Georgia, have become the hub for start-ups because of this exact reason.
In 2019, a venture capitalist, whom you may know from Sequoia, Matt Miller said that "Europe is about to skyrocket into a technological expansion". At the time, Matt's quote was received with side eyes and scoffs. The investor further explained his position, stating that Europe received funds from the Big 5 tech companies, as they were slowly and steadily expanding their roots into Europe by opening engineering and research offices throughout the continent. From 2019 to 2022, venture capitalists' eyes shifted from Silicon Valley to Europe, and let's be honest, where there's money, there's the future. Many investors shrugged off this idea at first, stating that Europe did not have enough talent or resources to establish the new Silicon Valley; even the language barrier was brought up by some US-based investors. Even better, researchers published a study in 2020 stating that more than 80% of Europeans spoke English, and if we take a wild guess, developers, designers, project managers, spring masters and other professionals are among those 80 percent.
Let's put our assumptions aside and take a look at the numbers: By 2022, it's expected that we'll see more than 800,000 IT graduates. The US has the most percentage of outsourced services in the world, with almost 68% of companies delegating their services. The UK, meanwhile, has around 48% of companies outsourcing offshore. The most exciting countries for outsourcing used to be from the central or western region of Europe, but small countries are gaining up at an immense speed. You may have heard of Ukraine's humanitarian crisis because of the war Russia waged on them, but this amazing country was (and we hope will return to being) a hub for outsourcing IT talent. Also, Belarus has some very talented people in its ranks. Despite the country's politics, the outspoken people of Belarus have earned recognition because of the high-tech talent they've produced. The itty-bitty country of a few million people, called Georgians, is skyrocketing yearly. Massive companies are outsourcing their tech needs to this small country.
Taking a business from a start-up level to a successful enterprise is a long journey and an expensive one. Silicon Valley was once "the place to be" for aspiring entrepreneurs and successful businessmen alike, but the financial cost is staggering, and the talent pool is depleting fast. This is why more companies are looking outside the box of geographical containers to look for affordable talent. Silicon Valley has earned it's place in the history books of all things tech, but Europe is the best contender, for whom taking the title seems more of a reality every single day.