[scottporad]

I am in Seattle, and have worked on teams with engineers located across the US, across Europe and in Mexico. I have found talented engineers everywhere.

As mentioned below, there are political reasons you might not want to this. And, there are some logistical hurdles in terms of local regulations which, in my experience, can be overcome and plenty of companies have shown that is the case.

So, to answer your question specifically, the reason to compete for talent in Silicon Valley/locally is exactly what you mentioned: the challenges due to different time zones.

Engineering is inherently a collaborative discipline despite the fact that much of the work is done in a solitary fashion.

Each degree of separation makes collaboration harder. The first degree is when you are not sitting next to your collaborators. And it goes on from there: perhaps when the are on another floor, or even another building, in another city, country, timezone, etc.

The most distance you add to the equation, the harder collaboration becomes.

[Shorel]

All you say is true. The solution is to centralize engineering in a time zone.

It doesn't need to be a time zone in the US.

[scottporad]

To my way of thinking, there is also a lot of communication with "requesters" (business people, designers, product managers, etc.), so they need to be in the time zone as the engineers too.

[Shorel]

One or two hours a day of overlap seems to work fine from my experience.