Some years ago I was involved in various projects to help make Manchester and the wider North West "the Silicon Valley of Europe". Yorkshire had similar programs. No doubt Germany, Italy, Estonia, Spain, they all have very same-ish intentions. The deal is they all go to the European Development Fund, say "Hey, look at this impoverished area, give us some money and we'll do things to lift them out of the doldrums!", and each programme has limited success.
Over five years ago I was offered a job in London and moved. It worked out for the best. I realised quite quickly the London market was prepared to pay me quite well in comparison to the Manchester market.
I went back to Manchester after a few months and met with directors, founders and entrepreneurs and explained how they could make Manchester the Silicon Valley of Europe without any EDF funding or major programmes. The solution was quite simple:
Pay the best rates in Europe.
They looked aghast as I explained: if you want the best companies, you have to have the best people and processes as well as the best ideas. To attract them, you have to compete with the best salaries. Sure, you can hire "good enough", but then you must realise you are going to get "good enough" people, and that might be the difference between a lifestyle business and running a unicorn.
Either way, the differential between Manchester and London was too high. I was a CTO of a company paying graduates what Manchester firms were prepared to pay Senior Developers. In fact, I actually saw one firm advertise for a CTO at a rate that I would be hard pushed to recruit for in London as a junior developer role.
The directors explained to me this was unthinkable: their business model relied on the cheaper costs of doing business in Manchester, that they provided a cost-effective solution to what they perceived as the "London madness". I told them to watch and wait and see: London would continue to leap ahead, Manchester would flounder, and they would all see the problem ahead of them.
I even told other developers they should move. "Too expensive" they told me. OK, the rents are high, it's true. But I can earn 2x-3x as much as I can in Manchester down here, and my food, entertainment and other ancillary costs are no more than 1.5x-2x what they would be in Manchester: in real terms as a percentage of income, living costs in London are actually lower. And in one interesting case - heating bills - the temperatures being 1C-2C warmer down here meant that my bills were literally pound-for-pound cheaper.
Everybody told me I was wrong, that the cheaper economies of Manchester led to higher living standards, to better companies, to companies more likely to last than the "silliness" of London.
We're five years on. The data suggests that I was right, everybody I spoke to in Manchester was mistaken, and London continued to outgrow and eat everything in sight. Until last June and the Brexit referendum, where the non-Metropolitan majority decided to shoot the economy in the foot in resentment of the Metropolitan-elite's successes.
There is much we need to do to prepare for the future, but I sense the answer remains the same:
Pay. People. More. Money.
It has consistently worked in every territory it has been tried in, in part because in the past the local circumstances allowed for high incomes due to the unique proposition of the area. We're now working in a global industry where people can work anywhere.
If you want to catch up to California, steal their people by paying them at least the same salaries. If you want to catch up to London, do the same.