Technology companies and the high-end employment they bring are generally seen as a desirable and welcome addition to any city or region. But are they?
Internationally – certainly, here in the Republic – courting such companies is part of national, regional and local policy. Every place wants to be a local re-interpretation of Silicon Valley (though former Stanford University president John Hennessy once told me he advised visiting delegations eager for a quick digital economy development recipe that first, you need, oh, about 100 years).
Not everybody is thrilled by a tech company influx. In the heart of Silicon Valley, Palo Alto residents complain about their downtown buildings being taken over by tech firms and start-ups.
Further north, tempers have boiled over in San Francisco into protests against already-expensive rents pushed ever higher. And as public transport struggles with underfunding and ridership, Valley tech companies lay on plush private transport buses for employees resident in the city but working further down the peninsula.
For years now, up and down the ever-expanding region known as Silicon Valley and in other US tech-saturated regions such as Austin, Boston, New York and Seattle, a leading concern has been the growing economic segregation – linked to racial segregation – that sees the “gentrification” of predominantly African-American and Latino neighbourhoods into predominantly white areas.
In San Francisco, the mostly black Fillmore and mostly Hispanic Mission districts that I once knew have flipped to become white hipster-dense zones with high rents and the demise of local businesses.
Dublin, too, has changed, though here, with less ethnic diversity to begin with, the shift has been class-defined. Consider the docklands, formerly a mostly working class inner city zone, where new housing developments now command high rents and artisan coffee has staged a beverage coup.
In cities attractive to innovative companies, blame for these changeovers is frequently laid at the doorstep of the technology sector. Once tech comes in, the assumption goes, cities become more segregated as economic gaps increase. A new study (http://martinprosperity.org/media/2017-MPIWP-001_Innovation-Skill-and-Economic-Segregation_Florida-Mellander.pdf ) suggests this is not actually the case.
“There are reasons to believe that the clustering of innovation and skills are bound up with the growth in urban inequality and economic segregation. For one, cities and urban areas have become increasingly preferred locations for high-tech companies’ start-ups and largely because of the increased locational preference of highly skilled tech workers for such locations,” write the authors of the study, Richard Florida of the University of Toronto (whose work on innovation and diversity is well-known) and Charlotta Mellander, of Jönköping International Business School.
But, notes Florida in a post for Citylab (https://www.citylab.com/equity/2017/08/the-complex-relationship-between-innovation-and-economic-segregation-in-cities/537270/), this is not so.
“We found that economic segregation appears to be more closely associated with three key factors: the population size, average income, and average education levels of a metro.”
In some cities, “these factors may be partially attributable to high-tech industry, which has brought an influx of highly paid and highly educated workers to cities like Boston and San Francisco. But many highly segregated cities don’t have correspondingly high levels of innovation.”
In examining more than 350 US metro areas, the authors found that innovation was less closely aligned to economic segregation than income and education levels. “In other words,” Florida says, “economic segregation tends to be a function of the size and education levels of a metro, which are influenced by many industries other than tech.”
This would seem to hold true for Dublin, too, with its broad range of companies in areas such as the IFSC. It really isn’t all about tech.
The trade-offs of gentrification are complex. Run-down areas, in which former vitality slowly declined only to be further weakened by official neglect, see fresh energy, new businesses, and expanded infrastructure. But former residents and their descendants often can no longer afford to live there.
Florida and Mellander suggest this doesn’t have to be so. Even if innovation and its associated industries are not primarily to blame for economic segregation, they say it behoves tech companies to “stop extracting from the cities where they are located and use their tremendous resources and capabilities to make them less divided and more equitable”.
In some places, this is starting to happen with scale. Google and Facebook are planning expanded campus developments in Silicon Valley that include housing for non-employees – including social housing – for example. Florida suggests tech firms should also dump divisive private transport services and, instead, support new public infrastructure.
What about Ireland? Similar corporate responsibility could help address the accommodation crisis caused by poor Government investment in housing but exacerbated by well-paid tech employees. And it could greatly improve the public transport – or the badly needed, proper bicycle lanes – thousands of them rely upon daily.
Given that so many of these deep-pocketed companies come here with generous State inducements, perhaps it is time such beneficial arrangements include innovative, city-enhancing infrastructure projects or thoughtful public-private partnerships.