How Tax Arbitrage Ended GE’s Foray Into Silicon Valley

[pstokely]

http://www.bloomberg.com/news/2012-12-04/how-tax-arbitrage-ended-ge-s-foray-into-silicon-valley.html

"The division, isolated from the technology sector’s epicenter, was limited in scope and scale and it increasingly served only the company’s accounting needs. A transplanted senior project member blamed this lag on the local labor pool, which lacked “the faintest idea how to use a computer to design another computer, and were too busy doing it by hand to find out.”
Few Palo Alto technicians had wanted to leave California to pick up the slack. “The staff were not enamored with Phoenix either as a place to visit or work,” recalled a division head.
GE abandoned computing in the early 1970s. “I have tried to imagine what would have happened,” Oldfield said, if the company “had permitted us to locate astride what later became Silicon Valley, the home of Apple, Intel, Hewlett-Packard, Beckman Instruments, Sygnetics and the rest.”
Then, as now, California has very high state taxes. It is also the home of the nation’s digital economy, from which GE, for all its varied product lines, is largely excluded"