The opening bit of this book talks about that: http://www.billbryson.co.uk/index.php/the-lost-continent/#ex... (click on extract to read)
"I come from Des Moines. Somebody had to. When you come from Des Moines you either accept the fact without question and settle down with a local girl named Bobbi and get a job at the Firestone factory and live there for ever and ever, or you spend your adolescence moaning at length about what a dump it is and how you can’t wait to get out, and then you settle down with a local girl named Bobbi and get a job at the Firestone factory and live there for ever and ever."
I live in Des Moines. I choose to. There are many people intent on improving Des Moines. It's easy to get in touch with the people that have the political and economic ability to drive that change. Zach is an example of this.
Humans are social creatures and we have an emotional need to connect. I can clearly see this as I contrast this human need when I compare my wife's needs and my needs. I am borderline Asperger's and my need to connect is not as high as that of my wife. Although this observation is in a family environment, I don't think it is too dissimilar in an office environment.
So from the perspective of connection, physical location matters.
http://davids-book-reviews.blogspot.it/2012/10/the-new-geogr...
That said, I did my time in the Bay Area, got out, and I'm happy to see people doing more in all kinds of places.
I've been a part of the startup community for the past few years and have witnessed the buzz. With large campuses for Intel, HP, Oracle in the suburb areas there is a large pool of talent that I grew up around and occupy the area. Recruiters and VC make regular appearances at collaborative work spaces and maker labs in the area.
Honestly, when I see these articles I'm a bit baffled. why would you move to Reno to save a couple hundred a month on rent?
Lack of diversity is a serious problem; most people in Des Moines were born there. From a startup perspective, there's also not much of an investor ecosystem, and some companies struggle to find local funding. It's a smaller and more homogenous city, with everything that entails.