Tech towns

The rise of the big tech companies in recent years, and their expansion into mega-campuses is reminiscent of the company towns of the industrial age. Whilst snaring a large tech-co with thousands of well-paid employees might feel like a lottery outcome for a local authority, there can be hidden consequences. Firstly, the dominance of a single employer creates economic risk and shifts negotiating power within a local economy. The recent threatened relocation of some locally dominant manufacturers in the wake of the Brexit vote provides examples of this. A second challenge comes in displacement and marginalisation of existing communities. The new wealth doesn’t always trickle down, creating us-and-them income brackets and unaffordable housing. Socially-conscious businesses understand how this can negatively affect their brand and hamper their growth, and are increasingly expected to be proactive about such impacts. This week Microsoft announced that it will invest a ground-breaking $500m to tackle housing affordability issues in Seattle (where jobs have grown by 21%, but housing starts have only grown by 13% leading to price inflation of 96%). The cash will largely comprise loans intended to stimulate activity and retain communities. This show of paternalism also evokes the bygone era of Bournville, which continues to draw accolades as one of the best places to live in the UK.