Tim Cook, like a certain Facebook CEO, wants the media to know that he is invested in spending time outside of the Silicon Valley bubble.
“Right now, the benefits of tech are too lopsided to certain states,” Cook told the New York Times’ Andrew Ross Sorkin in an interview earlier this week. “You want it to increase the diversity of people that are [in tech], both racial diversity, gender diversity, but also geographic diversity.”
The benefits of tech are lopsided because the tech giants like Apple have a lopsided presence in the U.S.– according to its website, Apple currently has 36,786 employees in California, and roughly 41,000 employees in all other 49 states.
To show that the company was dedicated to erasing this lopsidedness, Cook embarked on a mini-tour of the Heartland last week. His first stop was Cincinnati, Ohio, where he dropped by a manufacturer that makes water-testing equipment for Apple’s iPhones, followed by Waukee, Iowa, where Cook announced that Apple would be opening a new data center in the city. But for a look at what a significant investment in the Heartland looks like, one should look to Cook’s last stop on his mini-Heartland tour: Austin, Texas.
The state of Texas has the second-highest number of Apple employees, at 8,407, and Apple’s Austin offices are home to Apple’s biggest research and development office outside of its headquarters. A local economist told Austin blog 512Tech last year that he estimated that Apple’s investment in Austin would result in at least $140 million in new earnings for the city and create about 1,000 spinoff jobs.
There’s a reason that Apple has made such a significant investment in Austin: the city has the talent Apple needs. Austin was the birthplace of 1980s and 90s tech darlings such as Dell and Trilogy Software, which means that the city has been cultivating engineering talent for years.
It’s an important lesson to keep in mind — that a city or state first has to first cultivate tech talent on its own, rather than wait for a company like Apple to come along and hope the prestige of the Apple name will attract other tech companies. It’s particularly important for city and state leaders to remember in light of last week’s announcement that Apple would be an opening a new data center in Waukee.
It’s no secret that data centers are ventures that require minimal staffing. But despite the fact that the data center is only expected to bring 50 full time jobs to Waukee, Iowa Governor Kim Reynolds still touted the data center as “vital” to the state’s effort to become a technology hub. Building a data center is an investment in the Heartland — but it’s not the type of investment that will close the opportunity gap between Silicon Valley an the Heartland.
When companies like Apple, Microsoft, Facebook, and Google, are choosing the location for a new data center, they are looking for places with access to cheap, renewable energy, land that’s sheltered from as many natural disasters as possible, and is willing to provide the most possible tax subsidies — not cities that have top engineering talent.
Nonetheless, leaders of many small towns don’t seem to care. Waukee (population 19,284), isn’t likely going to become the next Austin (population 947,890) Instead, Waukee city leaders see Apple not as an employer that will bring thousands of jobs, but as a way to get tax money for much needed-infrastructure improvement, as the Washington Post reported.
It appears that Cook and Apple do realize that they need to find more ways to show that they’re invested in the Heartland — albeit as with any public announcement, there’s quite a bit of window dressing involved. Along with committing to building a data center in Waukee, Cook announced that Apple would be donating up to $100 million for a “public improvement fund” to be used to improve its infrastructure.
The public improvement fund is the first fund of its kind developed by the company — however, rather than committing money to a public improvement fund, Apple could help the city of Waukee improve its infrastructure by paying more in taxes (Apple received $208 million in tax incentives from state and local officials for agreeing to build the data center in Waukee).
“You’re dealing with these companies that are everyday household names, Apple, Google, Microsoft, etc., and it’s very difficult for politicians to say no, and it’s very difficult for them not to overspend,” says Greg LeRoy, the executive director of Good Jobs First, an organization that advocates for corporate and government accountability in economic development.
If Apple really wants to make sure that the effects of tech are being distributed evenly, then it should do more to help cities and states get access to the one resource that will ensure that they get a better share of the tech boom pie: talent. To its credit, Apple has committed to doing that through the $1 billion fund it announced earlier this year, which the company claims will be used to invest in U.S. companies that perform advanced manufacturing. To help more young people across the country learn how to code, Apple has also created an app development curriculum that can be downloaded for free through the Apple’s iBooks store — though students are taught only Apple’s Swift programming language.
Lastly — leave the talk of a data center turning a city into the next Silicon Valley at the door.