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Abstract
San Francisco is now widely considered to be the most important city in the world for the location of new technology start-up firms, especially high valuation “unicorns,” and is increasingly seen as both a locational and metaphorical extension of Silicon Valley. In this paper, I trace some of the political strategies and tensions that have accompanied the city’s prominence in this area, and in particular the distinctive role of technology and venture capital in the political economy of urban development. The paper has four empirical sections. It describes (1) the political machinations surrounding the 2011 and 2015 municipal elections, which saw the election of Ed Lee as Mayor with significant support from individual technology investors such as Ron Conway and Marc Benioff, and accompanied by various “tech-friendly” policy shifts; (2) the foundation of the “tech chamber of commerce” sf.citi as a means of enhancing the policy influence of the tech industry in San Francisco; (3) the introduction of a low taxation regime in the city’s Central Market area that has attracted technology companies such as Twitter as tenants; and (4) the urban policy tensions associated with the evolution of new “sharing economy” firms such as Uber and Airbnb, which have aggressively challenged municipal regulations in the taxi and property rental fields. Throughout these machinations, we can see a reshaping of capital fractions, with venture and angel capital increasingly involved in reengineering the labor, housing, and public transport markets of the city in order to circumvent the accumulation problems that tech investors had suffered in the earlier dot.com failures.
Acknowledgements
I am grateful to Elvin Wyly and Alan Wiig for their interest in and support for the paper, to the anonymous referees for their insightful reviews, and to Sarah Barns for connecting me into this special issue. I have enjoyed discussing many of the ideas in the paper with colleagues at the Institute for Culture and Society, Western Sydney University; the work of doctoral students Peter Davison (angel investment), Jack Parkin (Bitcoin), and Andrea Pollio (social entrepreneurship), who I am fortunate to supervise, has revealed the remarkable influence of the Bay Area in shaping quite diverse elements of the global digital economy. My thanks also go to the participants at the University of Sydney’s Department of Gender and Cultural Studies seminar series who provided far-reaching questions and comments on a presentation of the paper.
Disclosure statement
No potential conflict of interest was reported by the author.
Notes
1. Furthermore, in later multimillion dollar investment rounds, this becomes important because most venture firms are built through partnerships of major VC firms. Indeed, one market information provider—CB Insights—has gone so far as to track firm valuation growth against the partnership patterns of sector leaders such as Sequoia Capital and Andreessen Horowitz (www.cbinsights.com).
2. SVJV, a public–private body that pulls together government and major employers, publishes the annual Silicon Valley Index (see Silicon Valley Joint Venture, Citation2013) which consolidates a diverse set of statistics to produce a compelling overview of the annual performance of the Valley area. SVJV’s focus was on San Mateo and Santa Clara counties, yet their figures showed—contrary to the tech sector’s claims that the Valley salary boom was having a generally positive effect—that over the previous year there had been a downward social effect on the area’s working and lower middle class across a number of indicators, disproportionately affecting the Latino and African American ethnic classifications. Given the distortion to housing markets within San Francisco, it could be assumed that the socio-spatial disadvantage witnessed in the Valley would be similar in the city.
3. Other VCs became directly involved in the political scene in the city during this time: Michael Moritz (Sequoia Capital) supported a pension reform bill with a $250,000 donation, Mark Farrell was elected to the Board of Supervisors and Joanna Rees stood—albeit unsuccessfully—for mayor.
4. Muni refers to the San Francisco Municipal Railway, the local transport system which includes light rail, buses, and cable cars.
5. It is worth noting the similarity between this video and the Exxon video that accompanied that firm’s exit from mid-town Manhattan in the period of Dinkins-era New York that preceded the Giuliani mayoralties and the rise of business improvement districts (MacDonald, Citation1996). The quality of life issues that the video bemoans—trash, unreliable Muni (public transport) services, and unreliable taxis—are to be tackled by a mobilized tech community volunteering coding and pro-bono time in the service of the city.
6. By 2010, an anti-sitting proposition which sought to regulate the right to “sit and lie” had caused much debate about appropriate public space use in the area. In response, the neoconservative columnist Heather MacDonald reprised her anti-homeless Manhattan critique of 20 years previous, proselytizing against “Homelessness Inc.” as she preposterously termed the coalition of charities and nonprofits that worked on the ground (MacDonald, Citation1996, Citation2010).
7. The company’s founder, Walter Shorenstein, who passed away in 2010, had been a major Democratic Party fundraiser for many years.
8. Interestingly, Airbnb emerged as a direct result of hotel undersupply during major conventions, and was initially focused on spare rooms and sofa-beds.
9. In the run-up to the vote, the company had released an advertising campaign advising the council how it should be spending its taxes; after a significant public backlash, it withdrew the adverts (Hern, Citation2015).
10. See Weise (Citation2015) on the intricate tactics used by Uber to overcome city council opposition in Portland.
11. Websites such as cbinsights.com and techcrunch.com provide good overviews of the range of new companies emerging.