It's certainly true that SV's days as a big tech hardware manufacturer are past.
I am not at all certain, but I have to wonder if something magically keeps SV software innovators glued to SV. This is something I've never understood. But there must be SOME reason why software innovation/work didn't completely disperse from SV ten years ago.
One very simple answer is VC money. They want you local and their talent network (of people for your growing startup) is local. Who knows how different Boston would be if Facebook stayed there? (Just one small example)
People overestimate how quickly unacceptable conditions arise. The Bay Area can get even more congested and expensive than it is today, and most people will make do. Cambridge and some surrounding areas have San Francisco pricing now. It won't so much be a "dispersal" but a hunt for talent, which is why you get Uber and other SV companies in Pittsburgh, where you can live in a steel magnate's castle for the price of a condo in Palo Alto.
I am not at all certain, but I have to wonder if something magically keeps SV software innovators glued to SV. This is something I've never understood. But there must be SOME reason why software innovation/work didn't completely disperse from SV ten years ago.