By Ned Barnett, Associate Opinion Editor for the Raleigh News and Observer

The Triangle’s tech industry has been on a roll, but now Apple has added a speed bump.

In 2021, Apple announced plans to build a $552 million campus at Research Triangle Park, adding 900,000 square feet of office space bringing thousands of new jobs. The state offered $845 million in tax payroll benefits through 2061 to encourage the plan.

In June, the tech giant said its project has been put on pause for four years. That’s a long time in the fast-changing tech sector. This pause could become permanent.

In some ways the delay is welcome. Too much tech development too fast has put upward pressure on housing prices and traffic in a region that lacks a well-developed mass-transit system. But in another respect, the delay may also be a warning for regional economies that rely on investments by tech companies. It shows how unpredictable tech industries are in the post-pandemic era.

Research Triangle Park was built on the idea of synergy between research-based companies concentrating in one area. The idea worked and the Apple announcement seemed a crowning addition.

The pandemic – and the type of information technology Apple has developed – scrambled the idea of synergy through geography. In a time when workers can instantly connect from anywhere, how important is a brick-and-mortar campus? Why physically locate skilled tech workers in one place when they can easily interact via the internet?

Of course, many companies are pulling back from fully remote work arrangements. The new call is for hybrid work with employees coming into the office two or three days a week. But that nebulous and still uncertain approach does not seem enough to sustain more corporate physical concentrations, especially among tech workers, who tend to covet the flexibility of their hours and locations.

Apple is historically tight-lipped about its product development and its expansion plans. But Apple spokesperson Rachel Wolf Tulley said the company is still coming. She said, “Apple has been operating in North Carolina for over two decades, and we’re deeply committed to growing our teams here. In the last three years, we’ve added more than 600 people to our team in Raleigh, and we’re looking forward to developing our new campus in the coming years.”

For a comment on what might be steering Apple’s thinking about a Triangle campus – and the direction of the tech industry generally – I wrote to Trond Arne Undheim, a research scholar at Stanford University. He’s the author of “Future Tech: How to Capture Value from Disruptive Industry Trends.”

Undheim said the work patterns changed by the pandemic are now influencing corporate decisions about how to operate and how much to build. “Hybrid work has proven more robust than many people thought,” he said.

Another issue, he said, may be the emergence of artificial intelligence technology, which requires workers with new skills. Apple has to assess how to find them or train them and where.

Gerald Cohen, chief economist at the Kenan-Flagler Business School at UNC-Chapel Hill, said Apple’s campus pause may be simply that and not a signal that tech companies are moving away from large office operations.

“I think tech companies are saying ‘We want you to actually be in the office,’ “ he said. “I don’t think the corporate campus is going away.”

As tech companies evaluate where to locate, the Triangle continues to have strong appeal, Cohen said.

“We definitely have affordability becoming more challenging in the region, but we are still way more affordable than San Francisco or New York or a lot of places,” he said. “We are still attracting people. I don’t think this is going to change it.”

Remote work has disrupted business location plans, but long-term economic effects are still emerging.

“The work-from-home culture is a game-changer,” Cohen said, “But it’s hard to tell what that change is.”

As Apple pauses its RTP campus, it and other tech companies will have to determine how that change is changing them.

The preceding opinion was written by Ned Barnett and does not necessarily reflect the views of the Carolina Leadership Coalition. The piece originally appeared on August 5, 2024 at the Raleigh News & Observer’s website and is made available here for educational purposes only. This constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 106A-117 of the U.S. Copyright Law.