Is Silicon Valley Reproducible?

sunil99 asks: "Paul Graham, in his latest essay, looks at the ingredients which make Silicon Valley what it is. From the essay: 'Could you reproduce Silicon Valley elsewhere, or is there something unique about it? It wouldn't be surprising if it were hard to reproduce in other countries, because you couldn't reproduce it in most of the US, either. What does it take to make [a Silicon Valley]?'. In his opinion: 'I think you only need two kinds of people to create a technology hub: rich people and nerds'. He concludes that if a city can attract these people, it can stand a chance of replicating Silicon Valley. What do you think of Paul's opinions? If you would like some changes to the current Silicon Valley, what would those be?" While the people are an important part to the Silicon Valley experience, they are only part of the requirement. What local characteristics must also be present, even if Silicon Valley is to be duplicated on a smaller scale? What draws technology companies to a specific location?

Well if they keep on getting......

[DoraLives]

more and more restrictive with patents and all the rest of the current nonsense, they're going to have to find a way to create a new one, because they will have successfully snuffed the life force out of the one we have right now.

Uhmmm...

[$RANDOMLUSER]

Isn't this like asking if the Italian Renaissance could have happened anywhere except Italy?

wrong, there's cultural element

[jay2003]

Nerds and rich people are not enough. Silicon Valley works because there's a culture of risk taking. Starting a company that fails is considered good expirence in Silicon Valley. In many places, such a failure would make it very difficult to find a job or ever find investors again.

Northern Virginia?

[hsmith]

There is a massive influx of cash in this area because it is the seat of the gov't. Granted, it is all tax money, but that is where it flows. I don't know about the possibility of another "tech hub" like Silicon Valley.

bulldoze and restore it

[Anonymous Coward]

"If you would like some changes to the current Silicon Valley, what would those be?"

gotta say, having grown up watching santa clara county turn into silicon valley, i'd have to say i'd like all the orchards back. the apricots, walnuts, prunes, almonds, apples and all the rest... and the wetlands, too.

the valley is still beautiful with the santa cruz mountains and the hamilton range (and climate, minus the smog), but it was truly spectacular before the mass of sprawl changed things.

of course, the folks living there a century ago would have preferred the almost entirely rural lanscape. but i do miss it.

Changes to the current Silicon Valley

[chgros]

If you would like some changes to the current Silicon Valley, what would those be?
More women. WAY more.

Key elements of Silicon Valley

[Anonymous Coward]

As an 8 year resident of Silicon Valley, I have observed five major things that set it apart (not in any particular order).

1) Weather. Man, it is great. It may not seem important, but it matters to me a ton.
2) Smart people. The best people like to be with peers, with people who understand and think like them.
3) Borderline idealisitic mentality. Entrepreners fall under this category. Essentially the believe than you can, in fact, change things, make things better, start from nothing and create an empire.
4) Diversity. Silicon Valley is far from a mono-culture. The diversity extends well beyond the tech work force and is a part of every day life.
5) Great Universities. Stanford and Berkeley often spawn many startups that make it big (i.e. HP, SGI, Google)

The reason why this is hard to re-create is more often than not, people have to pack up and leave where they currently live and go (often) to a far away place (I moved from Ohio). It doesn't seem particularly realistic to go to a potential Silicon Valley if you can go to the real thing. Essentially, Silicon Valley as we know it today took 30+ years of the mentioned points to grow and cultivate.

IMO, to start another Silicon Valley, it would probably take 20 years and starts with an excellent university and a touch of diversity. I do think it is possible, in fact, I think it is probable that we will see similar places pop up in the world.

Lots of things

[Beryllium Sphere(tm)]

You need a culture where experimentation is rewarded and failure is treated as a normal cost of experiments. Compare bankruptcy in the US (oops, try again) to bankruptcy in Japan (your children hounded at school, people looking at you strangely for not committing suicide). Compare the fraction of engineers willing to work for a fly-by-night^Wyoung and innovative startup and get paid with lottery tickets^W^Wstock options in the US versus other countries.

There are very few things in the world like the Valley's venture capital system. Some will say "Good! Give thanks to the Flying Spaghetti Monster for that!", but the good VC firms provide a lot more than money. Professional referrals, blunt advice, and (if honestly done) supplying management teams are just part of it.

Just rich people and nerds? I can't think of a single innovative high-tech center that wasn't anchored on a world-class research university. Thereby hangs another cultural sine qua non, you have to have professors willing to start companies as opposed to growing beards and getting pompous.

Short Answer No

[baronben]

This is a huge question in economic geography (the economics of regions), and as grad student in economic geography, maybe I can at a bit.

Short answer is no. Long answer is yes with a but. Silicon Valley is the product of several interacting factors. The first is the presence of Stanford, which produces a great deal of spin off research, that locates near by so that people form Stanford can keep on interacting with the community. In a recent survey of biotech firms (in Seattle, not the Valley, but the example is still good for an example) over 75% of business owners said that continuing access to university resources was a large component of their locational decision. Stanford is important for another reason, it has a unique culture that encourages sharing of knowledge between people and firms. One of the reasons why Route 128 in Boston performs historically worse than the Valley is that its graduates are, generally, less likely to share information freely. This sharing creates what today is called "communities of learning," which allow all firms in a region to grow much faster.

The Stanford culture has created a unique culture, one that doesn't punish failure. Hell, you're expected to fail there at least a few times. No one gives money to someone who hasn't crashed at least 2 previous ventures. Its also created a pool of labor unrivalled anywhere else for what the Valley does best - software design, networking and chip design. People who are good at these locate there to be close to other people with the same interests, created a labor pool that attracts new firms looking for talented people.

This culture can't be recreated at the drop of a hat. It takes time. Sure, you can set up office space for chip designers, offer tax incentives to get firms to locate there, and sponsor high-tech grad programs at local universities, but it won't create a new Valley. It will create something else. Maybe better, most of the times worse. If anyone is interested, I expand on the subjects, but you're better off reading works by Melecki, Florida and Gertler.

Re:Uhmmm...

[ePhil_One]

Isn't this like asking if the Italian Renaissance could have happened anywhere except Italy?

Silicon Valley is full of itself. There are serveral areas that have vibrant Tech communities besides Silicon valley, there's a whole class of nerds that want nothing to do with the fruitcake culture of the west coast. The one thing they have is "cachet", if you're clueless and rich its a hip place to go broke investing in Fedex'ing Iron ore around the world, in other areas you need a more solid plan than "I'm gonna do stuff on the intarweb".

Re:Uhmmm...

[dubl-u]

There are serveral areas that have vibrant Tech communities besides Silicon valley, there's a whole class of nerds that want nothing to do with the fruitcake culture of the west coast.

I'm not denying that there are other good places to do tech, but that's not enough for startups. It's no coincidence that of the four internet giants, three of them are in the Bay Area (with the fourth in Seattle). Best of luck to Austin or wherever you favor in coming up with the next three, but if you're looking to do an internet startup, doing it in the Bay Area will be easier.

Re:Key elements of Silicon Valley

[kfg]

I do think it is possible, in fact, I think it is probable that we will see similar places pop up in the world.

Despite my earlier post in this thread I agree with you. Just not in the US. It isn't easier to duplicate Silicon Valley in the US, it's harder, because. . .

It doesn't seem particularly realistic to go to a potential Silicon Valley if you can go to the real thing.

As I concluded that other post: "Why compete with what's easier to join?"

Now, foreign countries like China/Brazil/Hoboken have real reason to forge their own competing technology centers and one of these days one of them will pull it off. They always do. Once upon a time China was the only place to get china.

KFG

You need relaxed employment regulation

[Peyna]

Part of the reason Silicon Valley was able to do what it did, is because non-compete clauses are unforceable there, so employees were free to move between companies at will. It worked pretty good.

Re:Short Answer No

[baronben]

this is a big difference between Boston and the Valley. New ideas coming out of MIT or Harvard - and to a lesser extent BU and BC ;) - will mostly go straight to large firms, which have the resources to support and incubate the ideas, but that won't take the risks to make it huge. This lets Boston have a great high-tech economy when times are good, but during recessions, there will be much fewer big new ideas locating in Boston because the large firms won't take the risk. This means that Boston is much more susceptible to cyclical downturns than is Silicon Valley, which usually has something else replace failed technologies.

Re:Lots of things

[Anthony Boyd]

You need a culture where experimentation is rewarded and failure is treated as a normal cost of experiments. Compare bankruptcy in the US (oops, try again) to bankruptcy in Japan (your children hounded at school, people looking at you strangely for not committing suicide).

That's a good point. I would build upon it to add one other ingredient that we have here in SV that others lack: encouraging entrepreneurship not just in words, but with law. Most of us have read the stories on Slashdot over the years about contract employees who had great ideas and worked on them on their own time only to have the employer sue to take the idea & whatever practical implementation had been created.

But in California, there is a law that makes it very clear that in an employee's free time (contract, full-time, whatever), they are free to come up with ideas and launch their own companies. In fact, one of my employers had a clause in their hiring contract which stated they owned everything I would ever do. I struck the clause before signing (just crossed it out) and wrote in the margin "this is not legal in California." The HR person read it, shrugged, and said "yeah, OK." Even if I had not struck the clause, it still wouldn't have applied, because the contract cannot override law (they cannot hire me to kill people, they cannot mandate 20 hour workdays, and so on).

To wrap up, the point is this: I have created many small money-making Web sites for myself while employed with others because I can. My ideas are safe. They cannot be stolen, even when companies want to claim them for their own. This is important enough that I have chosen to NOT move to other states that do not have similar laws. I will not move to technology centers in other states (or countries) unless I feel the small guy with the good idea has solid protection.

Silicon Valley vs. Austin

[Temkin]

Having lived/worked in both, Austin seems to have some of the pieces. Throw in a bit of rich wildcatter oilman mentallity, and you're almost there. Sadly, The difference seems to be in the colleges. In the SF Bay area, you have Stanford, Berkeley, Santa Clara U., SJ State, Hayward state, SF state, and if you stretch a bit UC Davis and Sonoma state. Round this out with a first rate community college system, and it's a nerd factory. In Austin, UT is a good anchor, but it almost stands alone. St. Edwards, San Marcos state, and ACC don't fill the gaps anywhere near like the second/third string colleges in the SF Bay.

Oh... and the weather in Austin is just terrible. Riding your bike on loop 360 is just tortures the eyes and the body. Anyone that told you that Austin has a lake kind of like lake Shasta 20 minutes from downtown is just lying to you. Trust me... Y'all would just hate it.

Willliam Shockley

[Garbonzo Pitts]

Silicon Valley got its start because William Shockley started Shockley Transistor with people he brought from Bell Labs. They left, and started their own companies, from which other people left to start their companies, and so on, and so on.

When Shockley was looking for where to start his company it came down to Pasadena vs Palo Alto, both of which he had lived in as a child. An administrator at Stanford recognized the importance of encouraging new companies and leased Shockley space that Stanford owned. If Cal Tech had made a better offer, Si Valley might have been in Pasadena...

I agree more dystopian than utopian

[mrraven]

I like my ibook as well as the next guy but the specific culture and landscape of Silicon Valley is putrid and dehumanizing. I think the real question is can high tech be produced in a more humane way. OSS seems to answer that to some extent in software, hardware may be a different question altogether. This passage from the essay Life on Margins should give all techno utopians pause to think:

"Taking a wrong turn off the walled highway, from which, through extensive work over the last several years, all landmarks have thoughtfully been concealed, I discovered the sanitized strip of North First Street in sprawling, silicon-powered San Jose. I knew about Silicon Valley, of course. Who doesn't? But I'd never been at its epicenter, surrounded by the built world it makes and is, in turn, made by. Along North First Street, mile after mile of modern office parks squat on old orchard land, the lovely, irrelevant mountains far away on either side. No humans can be seen behind the endless ranks of tinted windows or outside in the dead lakes of their windswept parking lots. Meaningless logos: UNISYS, INFORMIX, 3COM--glow like neon eyes from empty concrete faces.

All is new, clean, quiet, freshly painted, expensively landscaped. But the rows of young trees, stuck in the manicured earth as ornament, look more like famished prisoners lined up to be shot. They, and the glass box buildings, seem as untouched by life and movement as an architect's scale model. Even the brilliant sunshine can't make it look real. A single refrain is repeated in the parking lot signs: This Area Is Monitored by Video Surveillance at All Times.

In its regimentation, if not its ostentation, North First Street ironically calls to mind the old Socialist bloc, except if you recall that the ugly architecture there was mostly built to house people. (It's clear no people actually live anywhere near these buildings, they must live miles away, in suburban tracts.) Even the eternal spying generated by that now fallen system was a perverse form of employment, performed by actual human beings instead of neutral, unresistant machines.

But Silicon Valley, in spite of the reversals of recent years, is a zone of expansion, not collapse. New ground is being cleared every day. There is money here, and more is pouring in, like cement into a mold, to shape a future.

At the northern end of this long, silent no-place, atop lead-gray bunkers, the enormous white radar disks of Lockheed rise from behind a straggling line of brush, blank dish-faces turned toward the bright, generous California sky, looking for death."

http://www.whatifjournal.org/pages/Online/rodgersm argins.html [whatifjournal.org]

Nonsense time

[br00tus]

Most of what I have read of Graham's is useless, this is even more so. If you want to see what made Silicon Valley, simply go back to the 1940's and 1950's and see what made it. Writers from Cringely to Jeff Goodell have done this. Graham can't be bothered with looking back a few decades and seeing what happened, he simply looks around in present time and tries to deduce what happened, without ever looking at what happened, which is not hard to do. If this were a technical discussion I would be telling him to RTFM.

I see one of his headers is "Not Bureaucrats". I'm sorry, but bureaucrats are exactly what created Silicon Valley. Billions of dollars in government contracts in the 1940's, 1950's and on are what created Silicon Valley, are the engine which created it. Look at the Internet - the first RFC came out in 1969, and yet no commercial traffic was officially allowed on it (NSFnet rules) until the mid 1990s. Those 20+ years of interim were from the government gravy train. Exactly what Graham seems to not want to hear, which is probably why people like him are so ahistorical.

Requirements

[blofeld42]

SV has an inherent advantage as a first mover. (Please, don't mod me down for using buzzwords.) Any new SV would have to compete with the original, and the original already works and has market share.

Industries often cluster around certain areas. Autos around Detroit, Aerospace clustered in LA for a time, gun maufacture in the Conneticuit river valley in the 19th century. Some of it appears to be simply random; that's where the industry inventors got their start. Seattle has lots of Microsoft jobs because that's where Bill and Paul grew up. As the industry grew the spin-off companies started to feed off each other, and employees or their knowledge could shift from company to company. They developed into a place where you could find _anything_ happening in the industry.

If you wanted to replicate SV you'd need a couple major research universities, and some way to keep everything relatively compact, within maybe a 100-150 mile radius. The geography of the bay area helps out on that score. It compresses everyone in the industry into a fairly small, incenstuous area. If you want to have a meeting with someone you can drive somewhere and meet them for lunch. You need people with multiple skills, including science, management, and finance. Probably also no one dominate company. That turns the place into a company town, and cuts down on cross-fertilization.

Re:One ingredient

[deanj]

You're implying a stereotype; please don't take swipes at people like that.

There are many nerds that end up down there. I had a friend from school that went down there (He was Lebanese), and liked it quite a bit. I think he's been down there for about 15 years now, with a brief lapse to South Florida before he headed back to Alabama.

Sure, sample size of "one", but people do like it over there.

Re:Lots of things

[cgenman]

Having lived in the Silicon Valley, I'd add a lack of anything better to do.

Seriously. The night life in the valley consists of maybe club paradise, the Edge, a few comedy clubs here and there, and the VERY occasional bar. Which lends itself to people staying at home, tinkering with their computers, reading, and watching an unfortunate amount of television.

People have a lot of freakish hobbies in the valley, mostly stemming from having nothing to do. People talk about starting their own companies, then do it, largely out of having nothing to do. They weld jet engines to the backs of cars, make networks of AI chatbots, reprogram furbies to say dirty things because it's more interesting than going to golfland.

Out here in Boston (where I live now) there is no shortage of great minds, great ideas, and people who say "I should have done that when I had the chance." There is just so much going on here, though, so much social competition, that you can't do it. You need to have at least a masters, a full-time relationship or two, and four hobbies, all of which must be social. The average person doesn't have nearly as much time to develop a pet project into a full business.

And so less gets made out here. Less crazy ideas get out of people's heads and are given a real chance to prove themselves. When they do, MIT has great financers. But if you're not making carbonated ice cream as a senior thesis, chances are you're just not going to finish your great idea.

Re:Northern Virginia?

[oncebitten]

It's more complex than this. I'm part of a small VC firm here in NoVA, and here's the differences I see from Silicon Valley:

1) Unwillingness to take risks. DC area is an entitlement society borne about due to the fact that the federal government is here. No one understands the concept that if you are CEO of a startup, you are *not* entitled to ridiculous compensation. Your pay is enough to cover your bills, no more, no less. Your payoff is when the company flourishes.
2) No cross fertilization. Again, this stems from the fact that lots of work here is classified. In the Valley, it's not unusual for someone to go from HP to Sun to Oracle to whatever startup and back again.
3) Fear of failure. The DC area is way too conservative to deal with the status loss that occurs from failing at a venture, and not having enough money to keep up with the neighbors (see point #1).

Silicon Valley has jumped the shark

[xx01dk]

So here's another angle. The original silicon valley is suffering from the current housing "bubble" that has yet to "burst". What this means is that as the average cost of living (i.e.: housing costs, gas, etc.) go up, fewer and fewer people can afford to live here. So all the young talent now are forced to migrate elsewhere.

I can barely afford it; I am an entry-level field service technician at a semicon equipment supplier. And if you figure I'm on par with an recent college grad (10 years Naval service, Electronics Technician), then what hope do they have what with the massive school loans they are also trying to pay off in conjunction with starting a new career? If it weren't for my awesome girlfriend of 5 years who makes substantially more than me, I could barely afford a studio appartment anywhere near San Jose or Fremont. BTW, side note, at $22/hour I'm grossing over $1800 every two weeks but net pay is only $1200. THAT's what you get for living in California, number one, and number two is that there is no way in hell I'd even consider trying to own even a modest home when the average 1200 sq ft, two bedroom house near the East foothills (at least 10-20 miles from anywhere) goes for around $600,000.

Entry level. $600k for a house/condo. $2400/month. 10 years experience in the electronics field. You do the math, and try to pay for a car and gas and all the other bills. I'm getting the hell out of the valley as soon as I possibly can because it simply costs too damn much. Me and everyone else. So what happens when we leave (or refuse to settle to begin with), and the current crop of "founders" retires (think about it, it's happening now...)? What are you left with?

Silicon Valley has enjoyed a good run, but higher taxes and cost of living are going to prevail when it comes to where the nerds will settle and prosper. Don't get me wrong, I love this industry (I work as a tool vendor at frikken Intel for chrissakes--a geek's veritable wet dream if you will) but like I said, in less than 5 years I'm out of here.

Back to the "housing bubble". Even if it levels off (might be happening, who knows, it's becoming more and more fashionable to live here) then it's not going to go down, it will just stay at the current level--unaffordable.

Geeks are smart. You will see.

Re:First thing's first

[Lumpy]

Just another reason why we CAN'T have another "silicon valley" here - living expenses prohibit one from starting a full-time garage business.

I can not wrap my head around that statement.

Go get a medicore job in a rural area where cost of living is dirt cheap and work out of your garage there creating your incredible invention that will change the world.

The era of having suppliers near you are long gone. I have not seen a decently stocked electronics supplier for almost a decade and that was when I was in Japan and floored by the incredible supplies on the Akhiba strip. In the USA places like Warren Radio and other Electronics distributiors have stopped carrying small parts in stock for small count sales long ago. All distributors are simply sales offices where you get to place your order for 1000+ pieces now.

I have survived on my inventing and design manufacturing by mail order. I get my boards built in China for $2.50 a square inch 2 sided plated through with solder mask and silk screening. $3.50 a square inch for every 2 layers inside after that for small or single runs for beta testing a design. I order my parts from digikey or even Jameco lately as they have massively expanded their SMT lines of parts and typically are far cheaper than Digikay or Mouser.

All while living in a super tiny 1600 sq foot home with a full basement and full garage for my horribly expensive $800.00 a month house payment.

I have produced, manufacturered and sold 3 seperate devices. One of which I have sold to the manufacturer of the origional home automation system I was making the module for as a third party.

Who needs silicon valley. Being close to your competition and suppliers is a really stupid expense that holds an incredibly low value today.

Where I am I can hire local college kids for 1/50th of what they can in the state of california and get them beating down my door. And a good student in a norther university is just as good as a good student at CalTEch. It's the student's abilities and drive not the price of education that makes them good.

Re:Key elements of Silicon Valley

[khallow]

Nah, it's pretty easy to replicate Silicon Valley in the US. In fact, it's been done numerous times. None of the replications is close to the size of Silicon Valley (except Boston which is within a factor of ten), but that doesn't mean it hasn't been done. A lot of people don't want to work in Silicon Valley. It's a lousy place to raise a kid (though this may depend on ethnicity) and the real estate is epically expensive, for example. The state government also tends to be hostile to business and there's other problems at the state level (eg, the ethnic conflict between the dominant ethnic groups in the state, the state's budget problems) that are signficantly worse than other parts of the country.

So these other regions have been feeding off of Silicon Valley labor and businesses for a long time now.

As I concluded that other post: "Why compete with what's easier to join?"

The answer is because Silicon Valley doesn't provide the best fit for a lot of people and businesses. It's easier to compete than join under those circumstances.

Re:First thing's first

[Raffaello]

You're forgetting the second key ingredient - VC money. You may well be willing to start a company in a relatively remote rural area, and you might even get a few like minded nerds to join you in the boondocks, but you won't get VCs to give you any money unless you move - if they do find out that you exist they'll make you relocate near them so they don't have to travel 4 hours every time they have to attend a board meeting. Of course if you'd rtfa you'd know this but this is slashdot so...

Re:the black plague

[Tassach]

Geography also played a huge part in it. Italy (particuarly Venice) had the closest ports to the Ottoman Empire, which at the time controlled trade with India and the Far East. If you were in Western Europe and wanted silk and spices, you had to trade with the Turks and/or Arabs to get it, and the Venetians were in the best location to conduct that trade.

Re:Silicon Valley has jumped the shark

[Surt]

The upside to living in such an expensive place, is that when you reach retirement, you'll have huge retirement assets. You gross $3600 a month, which is really low for the area, particularly for someone 10 years out of high school (which would for a more typical college ba mean 6 years out of college). That puts you in a tough spot, no doubt about it. But the college grad with 6 years of experience is going to be making $5000 a month (or more). That's the difference between where you are now, and maxing out your IRA every year for your working career, meaning at least a half million worth of retirement without any employer match or anything else. Move up to $6000 a month and now you have the money to be able to either start investing in a house locally, or save enough to buy a house outright somewhere else in 10 years, and we still haven't reached the average cs/ee salary level in the area.