Eyes across the South have been watching Seattle over the past months in hopes of an Amazon “HQ2” announcement — many believe that the e-commerce and tech giant’s choice of where to place its second headquarters would signify not only a large economic development project, but also indicate the imminent tech leadership of the city it chooses. But, as Amazon continues to hold out on its decision, another tech monster may be putting down roots in the South.
Local Raleigh, NC news station WRAL reported in May that Apple is “close to announcing a deal” to put a second large campus in the Research Triangle Park area, the largest research park in the country, according to multiple sources.
Apple first announced its intention to open a new campus somewhere other than Cupertino in January. Earlier in May, Tim Cook met with North Carolina Governor Roy Cooper. Within a few weeks of that meeting, the state’s General Assembly proposed changing the way the state offers tax incentives to large companies — a company would have to invest at least $1 billion in the state and create 3,000 jobs to qualify for the incentive.
WRAL reported that the new campus might create as many as 10,000 jobs, though North Carolina and RTP officials have not commented on the deal.
The Triangle has been attracting big tech names for a while
Whether or not the deal comes through, local tech and business leaders express their opinion that even being considered seriously by one of the biggest and most well-known technology companies in the world is an indicator of the region’s growth.
“I think we’ve been seeing evidence that the Triangle tech scene is kind of sub-par to none,” says Phillipe Charles, director of communications and member experience at the Triangle’s biggest tech hub, Durham’s American Underground.
“More and more people from outside our region are starting to pay attention to what’s going on. And when we’re a contender with other fantastic cities for people like Apple, or even Amazon considering their campus here — I think it’s really recognition for what we’re doing.”
Todd Olson, founder and CEO of scaling Raleigh-based tech startup Pendo, says Apple is considering the Triangle for the same reasons that big tech like IBM, Google and Cisco have placed operations there — low rents plus good cost of living and quality of life among them.
“I think it indicates what we’ve known as folks who live here — that it’s a great place to grow a company and an office. There’s great talent in the region, its a great place to live, and as someone who’s chosen to live here and start a business here, I think it’s indicative of what we already know,” Olson says. Pendo, which makes software to help product teams work better, is one of the area’s fastest-growing companies — and after more than doubling in the last year, they were named a Best Place to Work by the Triangle Business Journal.
Olson says he’s not worried about Pendo’s workforce leaving for Apple. But he does think there will be some shifting of the area’s workforce.
“I have a sense that recruiters are going to come in. The initial reaction is that they [Apple] will probably take a few good people, they’ll probably attract some good talent. The startups that maybe don’t have the best culture, or aren’t doing so well, will get raided first,” he says.
Where will the talent pipeline come from?
Apple has not indicated exactly what types of employees will staff the new campus, but WRAL reports that it will be at least a partial technical workforce. One question is whether local universities, namely Duke, University of North Carolina Chapel Hill and North Carolina State, will provide the talent to feed the pipeline of jobs.
NC State and Duke both have strong engineering programs, ranking in the top 30 nationwide. And even UNC, a traditionally more liberal arts-focused university, has stepped up its technical education programs recently, according to the schools’ vice chancellor for innovation, entrepreneurship and economic development Judith Cone.
“In recent years, the University has sharpened its focus on creating hybrid programs that help fill the talent gap experienced by many companies in the technology, engineering and biomedical industries,” she says. This includes a partnership with NC State on specific engineering programs.
But, are these top students staying in the region post-graduation, or is there a “brain drain” to Silicon Valley? Cone says they are seeing more graduates that want to settle in the Triangle.
“Rather than moving away, our students frequently join high-tech companies in RTP and elsewhere in North Carolina that are expanding and making a global impact that begins right here in our region,” she says. Still, depending on the projected number of jobs that Apple plans to fill, new employees will likely have to migrate to the region should the campus be finalized.
How could Apple’s entrance affect the startup scene?
Since establishing a large office in Austin, the city after Cupertino where Apple has the most employees (more than 6,000), the company has made acquisitions to the tune of hundreds of millions. A potentially-even larger office in North Carolina could produce both growth and challenges for the burgeoning Triangle startup scene.
“If you look at what’s happened in Austin, companies will follow just to be a part of the Apple supply chain,” says Charles. “We’re already seeing that now — we get a huge amount of inbound interest in American Underground every day.”
Olson notes that wages will likely go up though, again, he’s unconcerned for his company.
“When things are more competitive, they’ll need to spend more money. It will create a little bit of pressure in the area,” he says. “But if you’re keeping people solely because of money, you probably have bigger problems than Apple coming to the area.”
“If that’s what the market rate is paying, shame on us for not meeting that, frankly. If we’re not taking care of people, then we deserve to lose people.”
Olson and Charles agree that Apple is less likely to attract employees who want to work for a very young startup.
“I don’t think you join a 5-person startup for the money. You join a 5-person startup because you want to create something. And while you get to create things at Apple, you’re going to create very small parts of a very big thing — it’s just completely different,” says Olson.
Charles points out, though, that those employees might eventually step away to become entrepreneurs.
“As with any company, people with eventually move on and do new things, and I think some of those people will likely move on and start companies of their own. So it’s going to bring more minds here, it’s going to bring more talent here, and that’s all fantastic for the startup scene,” he says.
How might infrastructure be affected?
As consistent with other cities that land economic development projects this big, home and apartment rents would likely see a jump — not that that isn’t already happening with the region’s rapid growth, according to WRAL.
“With growth, there’s always challenges,” Charles says about the infrastructure changes that might ensue. “But, when you note that this region is already growing rapidly, even without Apple, without Amazon, those are questions that we are going to have to answer one way or another — though obviously Apple will accelerate those questions.”
Charles notes that one big issue that will have to be addressed is transit. For the car-heavy, public transit-light Triangle region, there are concerns that the influx of workers will crowd roads.
But he says this is also already a question that officials are discussing.
“Long before hearing about the Apple announcement, local leaders have been talking about transit here. I think one thing that changes when you think about any growing region, really, is the mindset around how people commute will have to widen — people will need to consider alternate modes of transportation,” he says, noting that there is a bus system in downtown Durham and three bike share programs in the city.
Olson points out the infrastructural benefits an Apple could instigate.
“They’re going to want more flights back and forth to the Bay area. Right now we only have direct flight on two airlines, so that will help everyone,” he says.
“Bringing more smart, good people to the area is only going to create demand for houses, for restaurants, creates more demand for the arts,” says Olson. “With all this growth, it creates an environment where people really want to live.”