Is Phoenix The Next Silicon Valley? Or Will Controversial Politics Hold Us Back?

Published: Thursday, September 15, 2016 - 3:11pm
Updated: Thursday, September 15, 2016 - 5:12pm
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(Photo by Lauren Gilger - KJZZ)
Hamid Shojaee founded software company Axosoft.

Is Phoenix the next Silicon Valley? It’s a question that’s being asked a lot lately as more Bay Area startups are putting down roots in the Valley of the Sun, where rents are cheap and wages are too.

But, with a sometimes divisive national reputation and some controversial policies, will the state’s socially conservative politics stop us from becoming the entrepreneurial mecca we could be?

It’s a point that’s been raised in a recent New York Times article about Silicon Valley companies that are moving here, so we asked a few leaders in the Valley’s tech scene what they think about it.

Steve Zylstra, the President of trade association the Arizona Tech Council, said they’ve done some studies and surveys on this, and there’s a difference between how this affects individual employees, and entire companies.

“Our member companies are not having a hard time attracting talent here,” he said. “This is a terrific place to live and to work, it’s a relatively low-cost quality of life, standard of living.”

That’s not always the case anymore in traditional technology hubs like Silicon Valley and Boston, Zylstra said.

But, he said, “Economic developers will tell you that when you’re trying to attract an entire company, these kinds of political positions can really inhibit their ability to do that.”

Zylstra said companies don’t necessarily care about politics, but they do care about policies — and how those policies could affect their business.

“I do think policies like Senate Bill 1070, later on Senate Bill 1062, which dealt with religious freedom, can have a negative impact on the impression of Arizona across the U.S. and globally,” he said. “That’s a detriment to the folks that are working hard to attract people — the workforce — and [companies] here to Arizona.”

But, overall, Zylstra said he thinks the stars are aligning for tech companies in the Valley. He said we have a really pro-business governor and a corporate tax situation that’s great for businesses.

And, he thinks all of that means Phoenix is on the way to becoming the next big hub for entrepreneurship in the country.

“I equate it to sort of a tipping point,” he said. When Apple made a $2 billion investment here by taking over the Sapphire Glass Factory and turning it into a global command center for all of its data centers around the world, Zylstra said that was an indication to him that we had made it.

"The current governor also gets this new economy,” he said. “He’s been a strong supporter of Airbnb and Uber and Lyft and really disruptive technologies that are changing our economy, and I’m sure that sends a positive message to people who are looking to move here to Arizona.”

Hamid Shojaee, founder of Axosoft, a software company in the Valley, said it’s true that Arizona’s sometimes controversial politics can hinder the startup community’s upward growth.

Shojaee’s been involved in building up the entrepreneurial community here for a long time and thinks there’s a lot of excitement driving the industry here now, but he said it’s the stuff we make it to the national news for that can hurt business.

“Arizona’s an awesome place, but when the national debate is that Arizona wants to kick out immigrants or stop them without any reason and prove that they’re legal residents, those type of conversations are not helpful,” he said.

And he thinks that can hinder he growth of the startup community here.

“If a Silicon Valley-based company finds a company in Arizona interesting and wants to potentially purchase it, they might think twice about having a location in Arizona,” he said.

He said colleagues in Silicon Valley often ask him what he’s doing in Arizona, of all places, when he is there for business.

“I get that all the time,” he said, “and that’s really frustrating because, I’m like, Arizona’s the best place to be!”

He said one of his first customers at Axosoft was from Germany. “Like, my first order came from Germany, so, immediately, you’re building this sort of international company when you’re in tech,” he said. “And it makes you have a different perspective on things, it makes you embrace differences.”

And that, he said, is changing Arizona from the inside out when it comes to diversity.

“The more we have success with tech companies flourishing in Arizona, the more people would have to embrace that diversity and move us in the right direction,” he said.

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