It was not a hot destination for an IT start-up when Kevin Eichelberger left Atlanta and moved to Charleston to set up Blue Acorn, a company that offers data-driven optimisation techniques to midlevel e-commerce platforms. The limited space it had for its seven employees seven years ago required someone to leave before it could receive a visitor.
The company’s sprawling office today has abundant space not only for its 130 employees, but also their pet dogs that sniff around Mac machines and pizza boxes.
“Our primary competitors and peers are all in primary cities like New York, LA and Chicago. Charleston is not known for tech. But things are changing fast,” Mr. Eichelberger said, sipping beer. “In the last seven years things have changed. We have an advantage of being in a smaller city. Quality of life, affordable spaces – for companies and homes, lower cost of living in general, weather.”
One of the techies at Blue Acorn, Bangalore-born Chaitra Ananth was based in Houston, Texas — which itself is a fast growing tech centre — until one year ago. “I am home in 15-20 minutes after work, and my husband has a job that allows him to work from home too,” she explains her decision to move to a smaller city.
Work-life balance While ambitious techies impatient to make the next big thing may still be flocking to Silicon Valley, New York and Seattle, Mr. Eichelberger identifies a parallel trend — search for the right work-life balance leading techies to quieter places. He himself decided to leave Atlanta partly because he wanted to reduce the hours spent in office and on road.
In Raleigh in North Carolina, 29-year-old Uma Shankar who works with Cognizant had offers from companies in Silicon Valley several times, but he prefers to stay on. “I miss the night life, and the glitter of a big city that many of my friends enjoy. For a single man like me, it is a dilemma still, but once you cross 30 and plan a family, a smaller city is a clear choice,” Mr. Shankar said.
Akash Kumar Kochar, 31 had an option to choose his location when he moved three years ago from Gurgaon, Chicago or Charleston. Apart from planning for a family — his wife is due next month — Mr. Kochar also wanted to experience an outright American environment. “Traditional software centres in the U.S are more or less like Gurgaon,” he said. He now works for Blackbaud, a trailblazing software company in Charleston.
This attraction for smaller cities among techies comes after a phase when many big companies that are headquartered in tier two cities in the U.S. opened offices in metropolis in the last decade or so, to hire millennials – now aged between 21 to 30 – who apparently did not want to own cars or big homes, but wanted to be amid a crowd of similar minds.
Millennials The curve in the trend is coming as the millennials come of age. U.S population trends indicate that more than four million millennials turn 30 every year now, and that trend will continue for some years now.
By 2020, the U.S will have the largest number of people in their early thirties in the country’s history. It is not only people who do not want to enter the high race of high tech, but also those who have won that race that want to move to quieter places.
Jeff Hammerbacher, who pioneered data science at Facebook moved to Charleston when he decided to start a family, recently.
Nashville, Tennessee; Louisville, Kentucky; Milwaukee, Wisconsin; Cincinnati, Ohio; Manchester, New Hampshire; Eugene, Oregon — the list is long, of cities that are growing fast as mini tech-hubs in the U.S and consequently attracting Indian talent.
There is also a movement of Indian software companies to non-traditional locations. Infosys, Wipro, TCS, HCL and Cognizant — all have expanded their footprint into newer and smaller cities across the country in recent years.
Given the political sensitivity about Indian IT companies in an election season, representatives of several companies declined to give specific details, but confirmed the trend.
Industry insiders say this pull to smaller cities is driven by at least two factors. More and more buyers of the services sold by Indian companies — for instance, the big banks or insurance companies, want an onsite development unit. Indian software companies service one third of the Fortune 500 companies and many of them have headquarters in smaller cities.
“Earlier they did not mind where the development team was located. But increasingly, the (clients) who hire us want us to be located where they are,” said an executive of an Indian IT major. “It would have made more sense for us to concentrate all our operation in one location wherever it is and service a multitude of clients from there.”
TCS now has 900 employees in Cincinnati. “In fact, we just opened up two new, smaller offices in Cincinnati due to the growing need in the area. The primary reason we've focused on Cincinnati, for example, is the fact that many of our customers (such as retailers CPG companies and manufacturers) are within a 100-mile radius of the area,” a company spokesperson said. The company has plans to open more offices in tier two cities this year.
These companies take Indian techies to these cities of course, but they are also using this opportunity to hire more and more American employees, who are less mobile than immigrants. “Localisation of work forces is a major focus for all of us,” one executive said.
Political campaign This also is an effort to push back on the political campaign that Indian companies are destroying jobs for Americans.
“Indian IT companies support more than 411,000 direct and indirect jobs for Americans,” said Shivendra Singh, VP Global Trade Development, NASSCOM.
Mr. Singh pointed out HCL alone will create 1,237 additional jobs in Cary in North Carolina by the end of 2018.
It already has a big centre in Cary. Counties and small cities across the country are on an overdrive to brand themselves as the right investment destination.
The American dream appears geographically more dispersed than ever.
