BUSINESS, INNOVATION, TALENT
The California Option
January 5, 2017
California has the most innovative economy in the world, and boasts legendary tech giants such as Apple ($635 billion) and Google ($561 billion) that have consistently dominated the list of most valuable companies. Whether a company is a garageband startup, mid-level business, or massive enterprise, there is a home for it in California.
The first concern that most business owners have about relocating to California is that it is one of the most expensive states in the country. Taking California state taxes and regulations into account, California is still the most profitable state in the country and is 2156% more profitable than Texas, 38% more profitable than New York, and 291% more profitable than Philadelphia.
But what if you’re not a technology behemoth bringing in billions in revenue a quarter? Even if you remove technology and telecommunications companies from the equation, California is still the most profitable in the country.
The California Option
What if someone told you that your business could have access to all the thriving resources California has to offer, but you did not have to pay the astronomical costs of living in San Francisco or Los Angeles?
Sacramento, the capitol of California, has often been referred to as the gateway to Silicon Valley because of it’s proximity and natural pool talent, yet it offers a significantly lower cost of living than it’s Bay Area neighbor.
Access to Capital
The flood of venture capital that has defined the global startup economy can be traced directly to California. Prominent venture capital firms such as Andreessen Horowitz and Google Ventures as accelerators such as 500 Startups and Y-Combinator are all in California, yet have collectively invested billions in thousands of companies around the world. Startup founders around the world fight tooth and nail to get a meeting with legendary venture capital firms like Sequoia Capital and Founders Fund, and they are only a two hour drive away from Sacramento.
The Northern California Megaregion marketplace consists of over 12.2 million people and a regional GDP higher than any other megaregion in the United States. As the capitol of the 5th largest economy in the world, there is a reason the Sacramento region has been attracting so many new businesses.
Devin Schumacher founded and operates SEO Firepower, a digital agency in California with clients from all over the country. When I spoke with him about why he chose to operate his business in California even though he could operate it in another state and pay less taxes, he said:
“The opportunity in California is pretty endless. Obviously we have Silicon Valley in the Bay and then Silicon Beach in Los Angeles, but the opportunity goes far beyond that. California is becoming the place where entrepreneurs and people that are in emerging industries are flocking here to be with like minded innovators. The same way actors and filmmakers moved to Los Angeles, emerging businesses are moving to California to grow into a phenomenal network and potentially break through into the next level of their business.”
A Breeding Ground for Talent
Over 480,000 Sacramento residents (31.4%) have at least a Bachelor’s degree, with nearly half of them in a STEM field. With the Bay Area only a two hour drive away, Sacramento businesses can leverage the incredible talent pool of Silicon Valley as well. Local businesses are able to recruit directly out of colleges such as The University of California Davis (UC Davis), California State University, Sacramento State, and eight different community colleges.
Sophia Del Campo, a recent graduate from Maryville College in Tennessee, moved to Sacramento a few months ago because she heard great things about the city and was offered a job at a medical device startup.
“I decided to move to Sacramento because a lot of people were saying Sacramento was a great spot for young college graduates, and I also landed a great job at a fast paced start up medical device company that distributes Arthrex products.”
Sacramento is a breed ground for talent that also attracts entrepreneurs from across the world. The energy of being so close to so many remarkable and innovative companies such as Tesla has inspired thousands of startups and business owners to migrate westward. The Greater Sacramento region fosters a 42% millennial working-age population, with over 18,000 people leaving the Bay Area to move to Sacramento every year.
High Quality Life
Sacramento has a population of nearly 480,000, yet maintains the heart of a small town. Time Magazine called Sacramento America’s Most Diverse City and additional studies cited it as the most integrated city in America. Businesses in Sacramento are able to attract talent with families better than most cities in California thanks to Sacramento’s access to quality grade schools and universities and some of the best hospitals in the world such as the UC Davis Medical Center. There are dozens of fun activities around the cities and spectacular nature only miles away; Sacramento even has its own NBA team.
The Greater Sacramento Area enjoys the competitive benefits and brand recognition of California, while also maintaining a reasonable cost of living and entrepreneurial ecosystem.
If you are thinking about making the transition to Sacramento, we are more than happy to help you and make sure you are happy here. The Sacramento Economic Council is here to lend a hand wherever your business may need it. We’re more than happy to help, connect with our team here.
Faye Nabhani is President & CEO of SAFE Credit Union and a member of GSEC’s Board of Directors. Learn more about why she values economic development, working with GSEC and living and working in the Greater Sacramento region in the Q&A below.
Samsung Semiconductor has opened an R&D office in Folsom to house an advanced computer lab and controller development team to create technology for artificial intelligence, data centers, mobile phones and automotive chips. The office will initially employ 50 with plans to grow.