Opinion: Has San Francisco lost its spot as the world’s tech capital?

Leading trade group voices concerns about The City’s future

Sometimes, in my daily wanderings through downtown San Francisco, I look to the sky and ponder all the empty office buildings and wonder: What’s going to happen to this city?

For decades, San Francisco and neighboring Silicon Valley have assumed they would remain the world’s top spot for technology and innovation, riding a revenue train that would never ever stop.

Well, our choo choo has slowed down quite a bit. And there’s no guarantee of return ridership. A recent study by the research firm Real Estate Witch ranks San Francisco as the 16th best city in the country to launch a startup, far behind places like Las Vegas (No. 1), Salt Lake City (No. 2) and Miami (No. 4). The metrics considered in the study included favorable tax laws, access to an educated workforce and employment growth. San Francisco didn’t stack up. The cost of doing business in the Bay Area has been prohibitive, to put it gently.

That has local tech leaders worried. I recently spoke to Jennifer Stojkovic, executive director of sf.citi, a San Francisco tech trade organization founded by venture capital legend Ron Conway 10 years ago, in partnership with then Mayor Ed Lee. Conway, a centrist Democrat who has been active on the local and national political stage, built the group into a powerhouse, influencing policy while representing giants such as Google, Microsoft, Salesforce, Twitter, Uber and Facebook. The group’s mission is “to empower the San Francisco tech community to have a voice in tech policy decisions and collaborate with government leaders on solving local issues.”

And that’s exactly what Stojkovic plans to do. With Conway retiring from the board chair position, she and two other prominent women in tech — Board Chair Rebecca Prozan (director of government affairs and public policy for Google’s West Coast region) and Vice Chair Kate O’Sullivan (general manager of digital diplomacy within Microsoft’s corporate, external and legal affairs department) — will lead sf.citi forward into an uncertain future. And frankly, they sound worried.

From left: Rebecca Prozan, Kate O’Sullivan and Jennifer Stojkovic are poised to lead sf.citi, a tech trade organization founded by venture capitalist Ron Conway, following Conway’s retirement from the board chair position. (Examiner photo stitch)

From left: Rebecca Prozan, Kate O’Sullivan and Jennifer Stojkovic are poised to lead sf.citi, a tech trade organization founded by venture capitalist Ron Conway, following Conway’s retirement from the board chair position. (Examiner photo stitch)

“San Francisco has not had the same level of recovery as cities like New York and Austin and Seattle and places like that,” Stojkovic told The Examiner. “One of the things that is very concerning, in our opinion, is that while we have a myriad of quality of life issues that we need to address to make sure that we are reopening our offices safely and reopening our downtown, that’s really a short-term solution. The long-term (question) for economic recovery is, ‘How do we remain the best place for folks to locate their business and to make sure that their talent is located in San Francisco?’”

Unfortunately, Stojkovic doesn’t hear anyone talking about this at City Hall.

“That, in my opinion, is the $14 billion question that we are not talking about at a city leadership level. We have been very, very fortunate to be a city that has been leading as the main capital of innovation in this country and in this world for several decades now. And we are now at a precipice where there’s potential for us to not have that same pull. … We need to make sure that we are, from a regulatory and tax perspective, continuing to be competitive. We’re the most expensive place to do business in the country.”

Ugh. Just when you thought you were full-up on bad news, add this to the list. On my doomscrolling top 10, San Francisco’s tech center status ranks far behind Ukraine, inflation, fentanyl and homelessness. But it’s definitely on the list. We are a city based on technology and tourism, with a crucial convention economy that ties it all together. None of those engines are working at full capacity right now, so we need to pay attention when our tech leaders sound the alarm.

So what does Big Tech want San Francisco to do? You can read through sf.citi’s policy priorities, which map out some key areas one would expect from a business group. Favorable tax structure. Reasonable regulation. Eliminating bureaucracy. There’s also heavy emphasis on the pressing issues facing us all, including our lack of housing, aging transportation infrastructure, rampant homelessness and rising public safety concerns.

I would add one more to sf.citi’s list. Work with our largest tech employers to bring workers back to the office. And at the same time, embrace ideas forwarded in this column, and elsewhere, to repurpose space that will not be reclaimed by business. Empty offices? Make them into housing.

“I think the talk about repurposing the space downtown is one that a lot of folks are having right now. And I think that’s a realistic step and something we should be talking about,” said Stojkovic. “I also think that we have to do a good job of incentivizing people to want to be in San Francisco. At the end of the day, we keep coming back to the same thing. It’s very expensive to live in The City. So if we want folks to be coming downtown, and using the space more, we need folks to locate in San Francisco, which has not been on the forefront of housing development. California is not at the forefront of housing development.”

“(As for) transportation, a lot of our members are having concerns (about) their employees literally getting in and out of The City and getting to their offices. So we are advocating for better solutions from Muni and BART. That is important. Other perspectives? The state of the streets. Everybody says that. SF Travel is saying it, hospitals are saying it, every single association says the state of our streets has to change.”

For the record, sf.citi stands aligned with Mayor London Breed’s current plan to clean things up.

“We support the mayor’s initiatives, everything that she needs for public safety,” said Stojkovic. “But they’re not all tenable at the board level. We think that we need to be realistic about this. “

Conway and his organization have had some wins over the years, helping to make San Francisco startup-friendly while also advocating for improvements in local governance. For instance, this past year’s annual report shows they were heavily focused on mapping The City’s tech exodus and helping City Hall grapple with remote work, remote school and a remote population downtown.

Going forward, the organization’s new leadership wants to focus on keeping San Francisco relevant in the startup scene and helping to reenvision The City’s traditional downtown work spaces. From where I sit, this is core to our future success.

I grew up in Cleveland, Ohio. The region was the Silicon Valley of the Industrial Age, booming beyond belief in the 1910s and 1920s. The post-war era was a time of prosperity as well. Just like San Francisco, the civic leaders believed the boom times would last indefinitely. But as the companies and factories started moving out, seeking cheaper labor elsewhere, a slow decline began that bottomed out during my childhood.

To Cleveland’s credit, the city has reinvented itself behind strong ties to biomedicine and life sciences, due in large part to institutions like the Cleveland Clinic and Case Western Reserve University. But that took decades, and it’s still very much a work in progress. The key is to make sure you don’t hit bottom and have to build back from scratch.

Trust me. I’ve seen a downtown die. It’s not a pretty sight.

Editor’s note: The Arena, a column from The Examiner’s Al Saracevic, explores San Francisco’s playing field, from politics and technology to sports and culture. Send your tips, quips and quotes to asaracevic@sfexaminer.com.

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