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Tech powerhouses like Apple, Microsoft and Alphabet—Google’s parent company—have expanded far beyond their West Coast roots. For example, Amazon doubled its workforce over the past two years to 613,000 while Google expanded its worker pool 35% to 94,300. Essentially, these companies have outgrown the talent pool, space and cost of living of Silicon Valley.

Big Tech Companies

Because of this growth, big companies are looking to set up shop in cities with concentrations of highly educated workers, like Washington DC and Boston. For example, Google has laid the groundwork for a $1 billion Manhattan campus called Google Hudson Square and has offices and data centers popping up in Michigan, Colorado, Tennessee, Alabama and more. The obvious question—how does this growth affect the construction industry?

Impacts on the Construction Industry

The majority of these projects are undertaken by local construction firms, and city leaders are excited about the jobs and economic benefits such projects could potentially bring to their region. A lot of this excitement comes from the specific projects as well—big tech companies like these are always seeking out cutting-edge designs that constantly raise the bar for corporate social responsibility. A prime example of this is Facebook’s Frank Gehry-designed Menlo Park headquarters. It’s lined with acres of rooftop green space and includes a greywater system designed to save 17 million gallons of water each year.

In addition to these multi-billion dollar headquarter projects, contractors in rural towns and small cities benefit the most from big companies’ demand for two other types of facilities—data and fulfillment centers.

With a massive rise in the distribution and fulfillment market, companies like Amazon sprinkle these facilities across the country in proximity to its consumer bases—but even a company as big as Amazon can’t just build wherever they want. There’s still a massive labor shortage that’s not only crippling the construction industry but also stopping big tech companies from building.

Most of the pressure is felt in the data center sector. Tech companies are known to be extremely schedule-driven and often have aggressive rollout programs across the world. While smaller subcontractors are benefitting from some of this work, there’s a steep learning curve when it comes to meeting technical requirements, not to mention meeting them at the speed Amazon and other similar companies expect. The pressure has doubled down on design and construction partners to get everything done as quickly as the tech firms’ supply chain management allows.

Despite the pressure this puts on the construction industry, innovation is the ultimate result. While these tech giants have been dubbed “thought leaders” in energy-efficient design and economical power solutions, contractors have had to step up their use of prefabrications and other lean methods to better serve them.

For more construction news and services, contact O’Neal Manufacturing Services today.