> The problem is the irrational and unnecessary concentration of opportunities in that area.
The concentration is not irrational. That's the problem.
The concentration is driven by the fact that you will, not might, get laid off at some point if your job is in the tech sector. So, what happens is that everybody thinks about where their next job is going to be while getting hired for their current job.
If I somehow manage to land, say, a VLSI layout job in Pittsburgh, PA, there is no point in going there as when I get laid off, there is no other VLSI layout job. So, I'll have to go back to Silicon Valley. So, why should I leave Silicon Valley in the first place?
You might think that, okay, Pittsburgh is a problem, but what about Austin? Oddly, same issue. A hardware company wiped out most of its Austin site, set off a big scramble and those people couldn't land jobs because there are no other ones there (people think of Austin as tech--but it's not really hardware tech). I know lots of people who got hired in the "Big Data Analytics" startup fad who are now figuring out that they basically signed onto "Actuarial Science"--but, if they have a family, they really have nowhere else to go. The single ones are either changing fields (becoming a chef seems to be popular--go figure) or going to Silicon Valley.
Whereas, in Silicon Valley, you turn right at the last light instead of left, and you're at your new job.