How Silicon Valley Got That Way -- and Why It Will Continue To Rule 123
An anonymous reader writes: Lots of places want to be 'the next Silicon Valley.' But the Valley's top historian looks back (even talks to Steve Jobs about his respect for the past!) to explain why SV is unique. While there are threats to continued dominance, she thinks it's just too hard for another region to challenge SV's supremacy.
How Detriot Got That Way -- and Why It Will.... (Score:5, Insightful)
How Japan Got That Way -- and Why It Will Continue To Rule
How England Got That Way -- and Why It Will Continue To Rule
How Rome Got That Way -- and Why It Will Continue To Rule
Nothing involving active processes, continued development, and people is permanent. Its longevity is always dictated by its continued management and the ability to keep pushing without growing complacent such that disruptive technologies or hungry competitors don't surpass it or make it irrelevant.
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Admittedly a biased sample [imcdb.org] of what was cool among the auto industry's target customer base...
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At one point nearly all of the sports-convertibles sold worldwide were from the United Kingdom,
So what? Those were never huge sellers in the American market anyway, they were a niche product. Americans were all busy buying giant gas-guzzling behemoths all the way to 1974 when the Oil Crisis hit.
So even in the early 60s, someone writing "Why Detroit will continue to rule" would have been absolutely correct; they had over 10 years of unchallenged dominance left, and even after 1974 it's not like things sudd
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People buy cars in other countries too.
Ford & GMs management in the sixties was about as clued-up as you.
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So what if people bought cars in other countries? The biggest auto market was easily the US at that time.
As for Ford's and GM's management, yeah, they were really clueless, as they cashed in their huge paychecks. *rollseyes* It wasn't until the oil crisis that things went south, and that was many years later.
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Bigger than everywhere else put together? I doubt it.
And I see you used the past tense - "was". It didn't stay that way.
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You still don't get it, do you? Nothing is permanent. It doesn't matter if Detroit fell; for a long time, it was highly successful. If you were a highly compensated auto executive there in the 50s, who cares if it's going downhill 20 years later? By then, you'll be retired.
By your logic, everyone in Rome at 100BC should have moved out because the city was going to fall ~500 years later.
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Why should they? As long as they had a good run, what does it matter? Nothing lasts forever, certainly not any corporations. How many major corporations can you list which haven't either collapsed, been bought out, or significantly contracted in over 50 years? I can't think of any. Even IBM had a major contraction back in the 90s. Ford certainly contracted a lot, but these days they're doing great.
As for "durable goods", cars don't last that long. Sure, a few weirdos keep the 25+-year-old models in p
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Even as late as the 1980s, cars did not have a 6th digit on the odometer, so you couldn't go 100k miles without rolling over. I'm old enough to remember what cars were like in the 70s, and to have driven 80s cars. It was rare for cars to exceed 100k, rare enough that they didn't bother with the 6th digit on American cars. It was the Japanese cars in the 80s, as I recall, where they started putting that extra digit in, and it actually got used a lot. A mid-80s American car simply wouldn't last that long
Re:How Detriot Got That Way -- and Why It Will.... (Score:4, Funny)
... at creating the world's strangest pornography.
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^THIS.
Computing, semi-conductors and software is becoming a Third World low margin products. Look at the bullet points she has especailly the last one:
2000s: cloud, mobile, social networking
If that's the best SV can do, then they're really behind the times. While they're futzing around with advertizing, harddrives connected to the internet and shiny toys, I have been seeing some incredible technology in medical and bio-tech over in a certain city - hint: beans.
Re:How Detriot Got That Way -- and Why It Will.... (Score:4, Informative)
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Cheaper to live there brings to the fore, desirability of location to attract employees (cheaper to live there not so much, as cheaper to live means it likely sucks, supply and demand you know). So can companies attract better people and at lower costs by providing a better live, work and play environment, not only within their facilities but in the community at large. So locating according to this http://en.wikipedia.org/wiki/W... [wikipedia.org], likely makes the most sense if you want to attract and keep the best peopl
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Besides, technically-minded people that actually engage in technical hobbies can usually do those hobbies just about anywhere. They don't have to live in 'cultural' places, whatever that means, in order to enjoy their lives. Depending on the hobby it migh
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I think you misspelled Hillsboro, Oregon. But, the point is still taken. :-)
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How medium.com got that way (Score:1)
and why it will continue to peddle nothing but empty clickbait.
Re:How Detriot Got That Way -- and Why It Will.... (Score:4, Interesting)
Pretty much right on. Given how much of Silicon Valley is moving to my neighborhood just so they can afford to eat AND own a house at the same time, I'm not really that convinced that the important parts of technology will remain in SV...just the VCs.
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Remeber (Score:5, Insightful)
Silicon Valley was kick-started by federal dollars.
Remember that you fuckers every time you fire American workers for H1-bs and then accuse them of having entitlement issues. And remember it again assholes when you say shit like "you could be in India" so be thankful for your refrigerator.
The only people with entitlement issues are the SV "entrepreneurs" and VCs.
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Re:Remeber (Score:5, Insightful)
People who have money tend to feel entitled to it.
That's because they buy into the Libertarian myth that they made their money themselves.
Daniel Boone couldn't build his own rifle from rocks and sticks, because he didn't have the time nor the skills and Bill Gates could not get rich in Yemen or Somalia simply because the market wasn't big enough, regardless of whether it was steady enough and supported by laws and regulations and trust-worthy money.
Business folks refuse to recognize the need for a government and a market, thinking those things just happen naturally. Even today, the conservative voters and their politicians (get cause-effect correct if you're defining a problem) still want to fix the Bush-recession by raising interest rates even tho most economists recognize the lack of recovery is because of a depressed market and not because of a depressed ability to borrow money. There is no reason to expand a factory if you cannot sell what's already being produced.
The top tax rate in the US during the 1950s was 90%. That meant businesses paid their top employees a lot more (instead of giving _all_ the money to the CEO) and the government had enough money to build the interstate highway system (what is that worth for marketing) and fly to the moon. Then we decided rich people needed to keep "their" money and gradually for most of the people in America (more than half), life started to trend downhill.
We're all in this together. Whether you believe it or not is irrelevant. And this isn't a plea for communism which many conservatives scream at folks who aren't on board with them 1000%. We already know communism doesn't work in groups larger than about 280 or so (but it works fantastically well for a nuclear family. We also know unfettered Capitalism that puts all the money into the rich folks hands without investing in infrastructure will destroy the society. You can see this in any kingdom that didn't invest in bridges or roads or put the collected tax money back in the hands of the people somehow.
Adam Smith (1776) didn't push for complete economic freedom, just for competition within a well-regulated marketplace. Of course, he was writing to kings, most of whom had an interest in keeping their country runnning for mutiple generations.
That doesn't seem to be a true statement about voters nowadays.
Re:Remeber (Score:5, Interesting)
i see it as a similar conceit to anti-vaxxers
anyone who grew up when it was common for children to die at a young age due to common diseases would vaccinate wholeheartedly. but, distant those horrors, the effort necessary to maintain the status quo of healthy children becomes all you see: vaccinations, sticking needles in children, strange concotions i don't understand...
likewise, you have these similar fools who see the benefits of a regulated marketplace, but only see the onerous regulations, and not the horrors of what an unregulated marketplace is really like. so they react to the regulations as if they are the actual evil, just like anti-vaxxers
anyone who survived (broke) one of the many banking panics of the 1800s would claim the FDIC the greatest godsend. but, now that we don't have runs on banks, we just have this "evil" "world domination" "freedom destroying" scheme called the FDIC: morons think the FDIC is the actual evil
it's a conceit of lack of experience, lack of education, no awareness of history, prideful ignorance
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yup, well said
many of us also remember our youth fondly. when the teenage years are the most psychologically painful periods of a human life
we all have it. we forget the bad, and remember the good. it's also why people think things should be "like the good old days," to mythologize the past and always think things are getting worse. the truth of course that the past was more violent, poorer, and unhappier
it's a fundamental human conceit. historical myopia
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that's just ignorance. valuing life means you value vaccines. if you value life, but you don't value vaccines, that's not a separate belief, that's lack of knowledge
everyone is entitled to their own beliefs. no one is entitled to their own facts. if you don't understand that vaccines protect life, you're simply a stupid person
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Except they didn't. Kings of old didn't give a shit about what happened to their countries after they died. Why would they had? They were divinely appointed to their office, so whatever happened as a result of said appointment wasn't really their problem. Peasant's starving because the king sold all of nation's wheat to fund a war waged for his ego? God's will.
And of course this is sti
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If that were true, then why did so many of them commission monuments to be erected and histories to be written?
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http://taxfoundation.org/blog/monday-map-property-taxes-business-inventory
Rule? Dominance? It's not a kingdom. (Score:1)
There's a ton of software companies out there, and the majority of them aren't in Silcon Valley. When I think about the software I use every day, most of it wasn't produced in SV. Linux? Worldwide. Windows? Redmond. Facebook? Don't use it. Google Chrome? Ok, one.
Software is way, way bigger than SV, and has been for a long time. SV is a big player to be sure, but it's not a company, and it doesn't act as one entity. It's a region, and it certainly doesn't rule, or have any dominance.
How adorable... (Score:5, Funny)
Why would anyone start there? (Score:4, Insightful)
Ultra expensive, employees can leave for another startup, employees demand 2x their national average wage, employees demand partial ownership, highest taxes in nation, lawsuit friendly, non compete clauses not enforceable.
I can do a startup in Texas without these problems for half the cost and low taxes. I can find qualified workers too and not just self-righteous college graduates with no experience demanding 100k a year too! Before I am labeled anti employee assholes I would like to say a 70k job in Austin gets you a nice home. I pay less in taxes on you too and we both win. Try that with 120k in San Francisco?
What made silicon valley was what Texas or North Dakota is today. Cheap land, cheap employees, friendly government, no one leaving for another startup.
In the 1960s Massachusetts, New York, and New Jersey was where it was out. Now the reverse is true.
Economics should be encouraging companies to leave. This whole synergy argument is bullshit
Re:Why would anyone start there? (Score:4, Insightful)
Well it's not like this is all a recent development. The Bay Area has been more expensive than Texas for about 150 years now, and yet SV is the big time, while Austin is a regional hub. "Land is cheaper! Employees will settle for less money!" is true pretty much everywhere except for NYC, and yet I don't see many companies moving to flyover country.
And of course, if a number of large employers all suddenly congregated in Austin, of course land prices would go up, salaries go up, etc...this doesn't all happen in a vacuum.
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And of course, if a number of large employers all suddenly congregated in Austin, of course land prices would go up, salaries go up, etc.
That's definitely happening... Austin 10 years ago was cheap, now it is merely "not as expensive", especially if you don't want a long commute from the suburbs (Austin has horrible traffic, so I don't recommend that). Central areas of the city have prices in the $400-600k range. Fancy areas, like West Austin, are pushing $1m.
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True, but Austin has been a cultural hub (SXSW, live music capital of the world, etc.) for the weirder aspects of Texas for quite some time (and truly, Texas makes industrial strength freaks to survive the rest of the state), and it started well over 20 years ago with cheap rents, a college educated populace, and a mostly hands off government. That the rest of the country decided to take notice and drive up the costs isn't anything new. Boulder is going through the same now.
Truth is the next Big Thing could
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If only this were true...
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Well Silicon valley was so much cheaper than New Jersey in the 1960s so economics did the reverse.
All the good engineers lived in the northeast. 1960s titans in high tech are GE, Bell Labs, IBM, and some startups in Massachusetts. It was hard to find an engineer in Northern California before Mayfield changed this.
Now you are correct it is time for another correction but for some dumb reason people think the hills and the dirt are somehow magical and that some SV's demand relocation which is odd.
Detroit is a
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This is precisely why I won't leave California. I will never sign a non-compete contract. Noncompetes are what made silicon valley exceptional. People moving from company to company is what makes companies great, and it distributes the top talent across all companies so they get what they need done at their most
critical stages of development.
Some states are coming around to this way of thinking. Massachuttes, Oregon, and Illinois are considering severely restricting the use of non-competes.
There are 3 areas
Noncompetes (Score:2)
This is precisely why I won't leave California. I will never sign a non-compete contract.
That has nothing inherently to do with being in California. I've never lived much west of the Mississippi and I've never signed or even been asked to sign a non-compete in well over 20 years. While they are legal in my state they are not particularly common.
Re:Why would anyone start there? (Score:4, Insightful)
This is an odd statement. You intend to stay in California until the bitter end despite all the awful problems currently happening there. That is an acceptable trade-off for never signing a non-compete?
You fear employers so much that you are unwilling to leave your cozy little nest even though it might be filled with fire ants and is no longer actually cozy.
It's amazing the things one can be blind to if they never step out of their comfort zone.I hope you have fun sitting in traffic on 880 this summer.
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I see no awful problems in California. Maybe you can elaborate further.
I see lots of problems elsewhere (mostly in the middle and sourthern parts of the US). Employers take advantage of people and there's not much they can do about it the way the laws currently stand. At least in California, there are better employee protections than most of the rest of the country.
I fear no employer. Unemployed at the moment, but I'm financially independent. I just refuse to work under some regimes.
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You do realize that corporations only pay tax on Profit right? Therefore, if the taxes become to high, you pump all your profit into R&D, or give out a dividend, anything to have 0 profit, therefore 0 taxes. So, raising taxes will cause less taxes paid, not more.
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This is precisely why I won't leave California. I will never sign a non-compete contract. Noncompetes are what made silicon valley exceptional. People moving from company to company is what makes companies great, and it distributes the top talent across all companies so they get what they need done at their most
critical stages of development.
Some states are coming around to this way of thinking. Massachuttes, Oregon, and Illinois are considering severely restricting the use of non-competes.
There are 3 areas of reform in United States labor law which need to happen to fully engage employees and to ensure an level playing field:
1. Ban Non-compete contracts at the federal level. Use non-disclosure contracts instead.
2. Ban pre-dispute arbitration clauses.
3. Reform employment-at-will. Move to "just cause" like the rest of the developed world.
While I sound like a jerk here let's turn the tables? You use that silly web 3.0 startup generator on here last week and want to start that insect management cloud software startup? You invest 1 million to some employees to do R&D, research, and develop ex[pertise with the algorithms.
One of them leaves to compete with you and takes half your employees with him. He doesn't have to pay back that expensive line of credit from the bank that you took to develop the product. He undercuts you and goes directly
Re:Why would anyone start there? (Score:5, Interesting)
Maybe you should have looked after your employees better, and paid them well enough to ensure they'd stick around. Companies that depend on locking in employees with non-competes are bad actors in my view.
your view is biased (and stupid). (Score:2)
Maybe you should have looked after your employees better, and paid them well enough to ensure they'd stick around. Companies that depend on locking in employees with non-competes are bad actors in my view.
In your view?
I don't defend non-compete agreements, but you are seriously mistaken if you think employees can leave (and worse, go after your clientele) because they do not get treated better. I've seen employees leaving with confidential information, and client information (in industries where that is/was illegal) despite getting a very good treatment, benefits, salaries and a decent work culture. These people not only damaged (or try to damage) the company, but by transitivity, they did so against their
You don't need to sign a non compete (Score:2)
You don't need to sign a non-compete in California, your employer already has signed one for you!
They've all secretly agreed not to poach! Who needs a non-compete agreement when your employer's competitors have all agreed not to hire you!
Typically a non-existing problem (Score:2)
This is precisely why I won't leave California. I will never sign a non-compete contract.
I've never signed (nor being asked to sign) a non-compete in the 20+ years I've been working in the East coast (Florida, specifically). And even if you were asked to sign one, they are rarely enforceable. The one case I know well was completely obliterated in a county court because it would have forced the defendant to take unreasonable daily commute drives to work - meaning 20 miles one way.
Re: Why would anyone start there? (Score:1)
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70K in Austin will get you a 1 bedroom apartment that you will be paying $1300/month, with $100-150 for utilities. You can find cheaper if you move to the outskirts of town, but then you will be having to pay in time with a 2-3 hour commute each way, because Austin has not done a single road improvement (other than toll roads) since 1996, and there is no public transportation system to speak of. It takes three hours to go ten miles. Cycling? Other than a north/south corridor, you take your life in your
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You could halve your costs and lower your taxes by moving to Texas or North Dakota, but you'd also find it significantly harder to raise invement capital there. The big draw of the Bay Area for startups is the amount of VC money flowing around, and for some reason Silicon Valley VC firms have a strong preference for investing locally. Until this changes, or until people in other areas start investing heavily in tech, startups will continue to start primarily in Silicon Valley. And once established, it's har
Re:Why would anyone start there? (Score:5, Insightful)
> What made silicon valley was what Texas or North
> Dakota is today. Cheap land, cheap employees,
> friendly government, no one leaving for another
> startup.
You couldn't be more wrong. People leaving for another startup is EXACTLY what made Silicon Valley.
Pretty much all of the Intel founders met at and left Fairchild Semiconductors to form their own company. Fairchild itself was the result of people leaving Schockley Labs. Jobs and Woz worked at Atari and Hewlett-Packard before founding Apple. Palm came from ex-Apple employees. AMD also came from Fairchild employees. The cofounders of Nvidia jumped ship from AMD and Sun. YouTube was founded by ex-PayPal employees. And all that's just off the top of my head.
Smart people meeting smart people, having an idea, and having the freedom to leave their employer to implement that idea, is the vert heart of innovation. The fact that you tout non-compete shackles as a good thing *does* mark you as an "anti employee asshole". You labeled yourself in your very first sentence. It also proves that you just don't get what makes for an environment that generates companies that are not only innovative, but fantastic to work for.
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Not so unique (Score:2)
Very little of the qualities identified are in any way unique. Lots of places around the world (Waterloo, Canada, for one) have created very similar environments, simply on a smaller scale. Silicon Valley is merely the first and the biggest, and will keep its place with a little bit of effort, or lose it just as easily.
Personally, I'd bet on Detroit (no joke) (Score:5, Interesting)
Personally, I'd bet on Detroit for future economic ascendance- at least for the U.S. Rent ist dirt cheap and there's a distinct artsy/berlinish vibe to the people rebuilding Detroit right now - lot's of creativity and pragmatism ... For the western hemisphere in total Berlin is a good bet. Abundance of talent and creativity and a digital culture that is one abstraction level away from hardware (which will be built entirely by robots in just a few years from now anyway) plus a culture that emphasises a post-scarcity economy.
On a global perspective we westerners shouldn't delude ourselves. Far-east asia and india and perhaps the arab nations (after the terror has calmed down and the people are clamoring for an age of reason again) is probably where the parties at in 2-3 decades from now. India is the youngest country in the world. We'll all be pensioners when they'll just be warming up. 1.3 billion fairly well educated people in their best years ought to pack some economic and innovation punch.
I expect the valley and bay area to turn into something of a modern day Paris meets Amsterdam - which it basically is already. A tourist attraction and real-estate investment haven for the super-rich.
My 2 cents.
Yes Detroit (Score:2)
Personally, I'd bet on Detroit for future economic ascendance- at least for the U.S. Rent ist dirt cheap and there's a distinct artsy/berlinish vibe to the people rebuilding Detroit right now - lot's of creativity and pragmatism
Don't forget that Detroit metro has among the highest density of engineering talent in the country and has for the last 50 years. There is a LOT of technology in the area already and it's not particularly hard to find talent. The biggest problem in Detroit has historically been getting funding for ventures. There is nothing quite like the VC base there is in Silicon Valley. Of course that's true almost everywhere else
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There is this thing called Skype and planes.
The money saved in cheaper rents can be used to fly down or them fly up. Some may not like this and demand relocation but not all. In the 21st century this problem is less of an issue.
Silicon Valley wasn't built on skype (Score:2)
There is this thing called Skype and planes.
Doesn't work, not at scale anyway. The notion that location doesn't matter is a myth. Silicon Valley is what it is precisely because the people that make it what it is are located there. Move them somewhere else and Silicon Valley doesn't exist - not as we know it. Detroit is the automotive capital of the world because of the people and companies that are located there. You cannot skype that into existence. It doesn't work. You have to have the people actually living and working there.
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The GP meant the VCs, not the employees. Don't you feel silly now?
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Detroit is HOT! So is North Dakota, and Austin Texas is trying to do some startups too. Boulder Colorado is another one.
There are very cheap rents, friendly local tax incentives, and with a low cost of living and a revitilized downtown it is a win for the employees and the employer. You can get a trendy bachelor apartment for half the price of a studio in SV and factories too are turning into office spaces that look funky too with bricks on the outside.
The rules of supply and demand will have to come down s
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I'm re-posting part of a previous comment about Detroit, and why I think Michigan's laws make us an unlikely place as a future engineering powerhouse.
Michigan has what we used to call pro-business laws, but more and more, as California hoovers up the country's engineering talent, it's been come clear that these laws aren't even pro-business. They are anti-worker, and in the long term, they hurt a state's competitiveness in the very competitive engineering labor market. Michigan is now a right-to-work state
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Berlin is in the eastern hemisphere
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Berlin is in the eastern hemisphere.
USA geography at work? ... If Berlin is the eastern hemisphere, then Japan is the far west. ... But I guess it does depend on perspective.
Water? (Score:4, Interesting)
I remember reading excerpts from historical articles about NYC and London in economic texts and how they would never be eclipsed.
1. Both NY and London hit certain sizes and then the close interaction (required according to the author) between peoples cannot happen as well because of the size of the crowd.
2. When the prices of renting get too high, the smartest students can't afford to move there, not unless they go into finance (or can live on H1-B wages)
3. The price of water in California is going to skyrocket. That changes everything about the immediate area.
Tulips in Holland (1500s), Tea from Asia (1600s), Beaver pelts from America (1700s), Watches from Switzerland (1800s), all highy profitable markets not only guranteed to never fail by their salesmen, but ones that failed spectacularly fast when the end did hit.
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Holland still has a large flower industry, and a large agricultural industry that advanced with it.
Asia certainly still has a large tea industry.
Beaver pelts, well OK, that one is dead.
Switzerland still has a large watch industry, and a large precision manufacturing industry that grew up around the watch industry.
There are always places that can do something on the cheaper, money floods in, they become the next player before someplace else becomes cheaper, and the money goes with it.
Europe's SV (Score:3)
tax breaks (Score:1)
I hear California has some huge R&D tax breaks all the libertarians love.
it was the gubment (Score:2)
US defense industry was big in california from WW2 through the end of the cold war. Lockheed had lots of smart engineers building stealth aircraft at their Skunkworks there. the US space program was the original buyer for CPU's and all kinds of tech that we use today
after the cold war ended these engineers went to work for private industry
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There have always been a handful of big players that "dominate" the valley. In the past, it was companies like Hewlett Packard, Sun, IBM, Xerox, and Fairchild Semiconductor.
The names change, but the big companies play their role too. A big part of the valley is people getting their start at the big-name companies, meeting people and developing their skills, and then leaving to form their own startups... which something grow up to be the next big name that "dominates" the valley. Remember: The Intel found
And will the mystery guest... (Score:2)
Isn't it basic writing that your IDENTIFY the subject before you start referring to them with pronouns? "The Valley's top historian" is a descriptive statement (and a personal opinion at that), it doesn't substitute for her name.
Ellen Pao --Death of Silicon Valley (Score:1)
There is one reason that Silicon Valley will not survive.
The PC/SJW crowd is targeting high tech. now. I can see eventually a case like Ellen Pao where a bad choice of some San Fransisco jury is going to a company in a case that is not even good enough to be borderline.
At that point several startups and established tech firms are going to realize that it is safer to have their facilities in Topeka or Toledo or Peoria etc than it is in the second liberal armpit of America.
You'll get less antagonistic juries
The only constant is change. (Score:2)
The article makes no argument to support its assertion that silicon valley will continue be a unique technology center. In fact, the article does make several compelling observations and cites trends that would portend just the opposite--a diaspora of tech development.
The specific SV boom from 1960-1990 was a concatenation of unique events. There is nothing unique to the geography that will keep tech in SV. California has the best combination of weather and recreation in the U.S. (IMO), but that's not going
better watch your back (Score:2)
Silicon Valley was nowhere in the 60s. Everything has it's rise and fall
Consider what happened around Boston, look at the wreckage of the computer industry there:
Symbolics, Lisp Machine, Prime, Data General, Wang, ComputerVision, and (of course) Digital Equipment Corporation.
For a while, route 128 was the epicenter of the American computer industry. Now, those companies are all dead.
It's coming for you, California! Silicon Graphics, Sun... Gone... HP is already circling the drain. Apple's remarkable bou
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also Thinking Machines Inc.