General Question

AshlynM's avatar

This may seem like a dumb question, but why are a lot of companies headquartered in CA?

Asked by AshlynM (10684points) December 10th, 2011

Google, Ebay, Mattel, Netflix, facebook, even Fluther. I realize some companies are NOT headquartered in CA, such as Sony, Honda and Hershey.

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6 Answers

HungryGuy's avatar

Whatever your industry, you want to locate where your employee base is. For tech companies, that’s “Silicon Valley” in CA. Older established companies are based wherever they originally started, I suppose. Sony and Honda are Japanese companies, so they’re based in Japan with offices in major US cities. Hershey, well, they make chocolate, so they just needed cheap labor and lots of land for their factory (the theme park was originally just a private park for employees), so rural PA made sense for them back when. Banks, on the other hand, tend to congregate in VA because that state has the most lenient banking regulations.

tinyfaery's avatar

CA has a well-educated, large population.

marinelife's avatar

California is a large state. Many corporations are there. But just as many—even more—are headquartered elsewhere.

gorillapaws's avatar

From your list, only Mattel wouldn’t be considered a tech company. So your question might be better phrased: “Why are tech companies HQ’d in CA?”

As @HungryGuy said, it’s because Silicon Valley is in CA. There are a few reasons why Silicon Valley is such a Mecca for technology. One is that programmers and engineers usually earn a pretty decent salary and are inclined to live in desirable locations. The San Francsico Bay area is one of the most beautiful places to live in the world, with access to beaches, massive redwood forests, world-class skiing nearby, etc.

Furthermore it’s where Apple computers started up since that’s where Steve Jobs and Steve Wozniak grew up, and they had access to lots of electronic parts and were surrounded by a culture of early technology in the area due to lots of military projects in the area in the years leading up to the development of the personal computer. As Apple was the first computer company to really sell in massive numbers, other companies started to pop up nearby.

JLeslie's avatar

California is a big state, with a lot of people in it, as mentioned by @tinyfaery. Just pure statistics would mean there is a statistical likelihood of there being more business in states with more people. Once an industry begins to take hold in a location, like the tech business, then new tech businesses start to pop up even more, because employees begin to start their own companies, companies locate there because there is a large population of people trained in that industry, and even further on that point universities in the area start to develop and expand their majors in those fields. Since it is a coastal state it is likely to have American headquarters of American companies for Asia as well. For instance Pepsi International Headquarters for Latin America is in FL. Direct TV for Latin America is also Headquartered in FL. Michigan has the auto industry, and a tremendous amount of universities that offer mechanical engineering degrees. Also, Research Triangle in North Carolina, which is the Raleigh-Durham area, is the silicone valley of the south. Texas has Aerospace because of NASA in Houston. Delaware has a lot of banking and creidt card companies because of their tax laws in that state for those businesses. Nashville has the country music industry. New Jersey has a lot of pharmaceutical companies. Fashion Designers tend to be in NYC. There are HQ’s all over the United States.

And, back to California, it is a desireable state to live in, so it helps attract employees. Beach, mountains, the only real negative is it is very expensive in most places. Probably California was more attractive 50 years ago, when many in the northeast were moving to California, before it became so expensive. The next migration to a sunny warm place was southeast FL.

JLeslie's avatar

Oh, I forgot Hershey’s. Milton Hershey was from Pennsylvania. His family were Mennonites, you might know there is a large Mennonite populations in PA, especially in Lancaster, PA. Milton H. did travel around a little before he settled back in PA.

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