Schumpeter

Leaving for the city

Lots of prominent American companies are moving downtown

FIFTY years ago American companies started to move their headquarters away from city centres to the suburbs. Some critics blamed the exodus on “white flight”, as businesses followed their employees out of increasingly crime-ridden cities. The firms themselves ascribed it to corporate responsibility. They provided offices in safe neighbourhoods and near good schools—one academic, Louise Mozingo, of the University of California, Berkeley, calls it “pastoral capitalism”. Whatever the reason, it created a new type of HQ: not an office tower in the pumping heart of a metropolis but a leafy campus in the middle of nowhere.

Now a growing number of companies are moving back again. The most prominent example is General Electric, which abandoned New York City for a 68-acre campus in Fairfield, Connecticut, in 1974, but is now swapping its bucolic site for a collection of warehouses on the Boston waterfront. There are legions more. Chicago’s downtown has attracted an impressive collection of HQs, from both the surrounding suburbs and from farther afield, including McDonald’s, Kraft Heinz, Motorola Solutions, Boeing, and Archer Daniels Midland, a food-commodities giant. Zappos, an online retailer, has moved from an office park outside Las Vegas into the city’s old downtown. Biogen moved from Cambridge, Massachusetts, to the Boston suburbs in 2011 only to return a year later. Many tech companies were born urban and couldn’t be any other way. Twitter and Salesforce are in downtown San Francisco, and Jeff Bezos is building a huge campus for Amazon in downtown Seattle.

City boosters are delighted. “This is better than hosting the Olympics,” says Shirley Leung, a columnist with the Boston Globe, of GE’s move. Corporate executives sound like graduate students after their first reading of “The Rise of the Creative Class” by Richard Florida, an urbanophile intellectual. Jeff Immelt, GE’s chief executive, says that “we want to be at the centre of an ecosystem that shares our aspiration”, and notes that Boston attracts “a diverse, technologically fluent workforce”. Ann Klee, who is helping to oversee GE’s move to Boston, says that the new headquarters will do without a car park, in order to encourage workers to use public transport. It will dispense with security gates and wants the public to come in. Greg Brown, the CEO of Motorola Solutions, commends downtown Chicago for its “energy, vibrancy and diversity”.

Is the new urbanism all it is cracked up to be? It is easy to find counter-trends, given America’s size and variety: many CEOs continue to see a future in the suburbs of the sunbelt. ExxonMobil is building a headquarters for 10,000 people in the outskirts of Houston. Toyota is moving its North American headquarters from Torrance, California, to suburban Dallas. There is also tax-and-benefits arbitrage going on: over the past decades, the suburbs have become complacent and downtowns have got hungrier. GE’s affection for its old home in Connecticut was no doubt weakened by the state’s decision in 2015 to raise business taxes by $750m. Boston provided an estimated $145m in incentives to secure the deal.

Still, something is clearly changing in America’s older cities. They are much less crime-ridden than before, thanks to a combination of better policing and demographic change. The homicide rate fell by 16.8% from 2000 to 2010 in big cities. Now these urban centres are magnets for millennials fresh from university and with few responsibilities. Young professionals are reconquering former no-go areas and shifting the problem of urban blight into the suburbs. Hiring such people in Boston, GE reckons, will help it shift its focus from hardware to software and from selling things to offering services over the internet.

Yet the new downtown headquarters are very different from the old ones, and not just because they are open-plan and trendy. They are far smaller. Often, firms are moving their senior managers to the city along with a few hundred digital workers. Moving back to Chicago’s centre has usually involved downsizing: Motorola Solutions’ HQ shrank from 2,900 to 1,100, and that of Archer Daniels Midland from 4,400 to 70. Many companies are deconstructing their headquarters and scattering different units and functions across the landscape, leaving most middle managers in the old buildings, or else moving them to cheaper places in the southern states. Aaron Renn of the Manhattan Institute, a think-tank, reckons that head offices are splitting into two types: old-fashioned “mass” headquarters in the sunbelt cities, and new-style “executive headquarters” of senior managers and wired workers in elite cities such as San Francisco, Chicago and Boston.

That suggests there will be no return to the broad-based urban prosperity of America’s golden age. San Francisco could be the template of the future. Its centre is divided between affluent young people who frequent vegan cafés and homeless people who smoke crack and urinate in the streets. Long-standing San Franciscans resent the way that the urban professionals have driven up property prices. And those young workers may fall out of love with the city centre when they have children and start worrying about the quality of schools and the safety of streets.

To the top of the pyramid

The best book to read if you want to understand corporate America’s migration patterns is not Mr Florida’s but a more recent study, Bill Bishop’s “The Big Sort”. It argues that Americans are increasingly clustering in distinct areas on the basis of their jobs and social values. The headquarters revolution is yet another iteration of the sorting process that the book describes, as companies allocate elite jobs to the cities and routine jobs to the provinces. Corporate disaggregation is no doubt a sensible use of resources. But it will also add to the tensions that are tearing America apart as many bosses choose to work in very different worlds from the vast majority of Americans, including their own employees.

拓展阅读

英雄企业灰飞烟灭的例子如今屡见不鲜，麦肯锡预测目前标准普尔500强公司中的75%将在2027年前消失。新技术让整个市场天翻地覆，挑战者能够比以前更快地规模化。但整合风潮中的大企业仍然拥有惊人的不可替代性，它们可能会很长寿。点击图片回顾《新寿星》

最成功的高科技公司已经在短短几十年内达到了庞大的规模，它们也已经将这样的规模转化为市场霸主地位和飙升的收入。世界上目前市值最高的三家公司都是科技公司，亚马逊和Facebook紧随其后排在第六和第七位。这些科技巨头已经离创业公司越来越远，而逐渐蜕变成传统的巨型企业。强者愈强的“赢家基本通吃”时代，全球商业的生态随之转变。点击图片回顾《巨人何以茁壮成长》

伟大的公司往往具有独特的文化和传统，以清晰的战略执行牢牢占据利基市场。但它们也有一些共通点，由此在一系列复杂的挑战中保持平衡和灵活。对人才与核心技能的执著，是“超级巨星”中常见的经营哲学。点击图片回顾《成功之道ABC》

曾任PayPal首席运营官的里德·霍夫曼（Reid Hoffman）发明了“闪电式扩张”（blitzscaling）一词来形容科技企业的成功之路，这个词源自德国在二战中率先发起的“闪电战”（Blitzkrieg）。高科技企业需要发现利基市场并尽快扩张，PayPal的联合创始人彼得·蒂尔（Peter Thiel）指出，几乎所有成功的创业公司都是从占领某个利基市场起步。点击图片回顾《来场闪电战？》

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目录

驱动力：巨人何以茁壮成长

误解：新寿星

关键特征：成功之道ABC

加入强者军团：来场闪电战？

熊彼特：奔往城市