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Are Silicon Valley's Glory Days Over?
Hugh Pickens writes "Pete Carey writes in the Mercury News that there are 'clear warning signs' that Silicon Valley has entered 'a new phase of uncertainty' in which its standing as a tech center is at risk and that decisive action by business, government and education is needed if the region is to retain its standing as the world's center of technical innovation. 'It could be that Silicon Valley has a different future coming,' says Russell Hancock. 'It's not a given that we will continue to be the epicenter of innovation.' Among the troubling indicators in the Silicon Valley Index (PDF): 90,000 jobs lost in the last two years; the influx of foreign science and engineering talent has slowed; venture capital funding has declined; per capita income is down 5 percent from 2007; and the number of people working as contractors rather than full-time employees is rising. Adding to the valley's problems is a malfunctioning state government that is shortchanging investment in education and infrastructure."
I keep telling these idiots that the first option you should look at when jobs are declining is to increase the importation of foreign workers but do they listen?
nnnnNOOOOOoooooooo....
Seastead this.
In California? Are you serious? California has always rewarded bright, young students interested in the sciences. Here's a recent example:
http://www.signonsandiego.com/news/2010/jan/15/students-evacuated-school-chollas-view/
"The average reporter we talk to is 27 years old......They literally know nothing." - Ben Rhodes
The synergy of government, university, corporation in Silicon valley
is glued there by one critical component -- the venture capital lives
down the block and they like to see how their money is spent --
daily. Perhaps others have more direct life experience but I've
definitely seen it in biotech.
As soon as the lure of big bucks goes away, tech will be a commodity
to be found in any medium sized city's office park. The cost of life in
CA is insane.
Does this imply that continually electing right wing governors and the like has a little bitty teenie weenie something to do with economies falling into the toilet? Could it be?
I believe you'll find it's bloated government spending that's bankrupt California. And I'd hardly call Arnie 'right wing', except perhaps by Hollywood's standards.
The actual problem is the set-asides imposed by referendums.
Indeed, California is suffering from too much democracy. It is especially easy to get well-meaning things (or at least things that sound well-meaning) on the ballot. People vote for them because they sound nice and the voters don't have to try to balance the state budget. This commits money to all sorts of things and prevents the government from fixing the budget. The Economist recently did an article on this topic that is very enlightening. As bad as politicians may be at budgeting, the voters are far, far more dangerous
First, bypassing the "story" and a layer of blogs, is the actual report.
What's really happened in Silicon Valley is that it's been hollowed out. Silicon Valley used to be a major manufacturing center. San Jose once had the highest percentage of manufacturing employees of the major US cities, something like 54%. Today, the assembly plants are gone. Most of the fabs are gone. Much of the engineering is gone. This is what happens when you "outsource". Eventually, everything moves to where the production is, including management and finance.
Part of the problem was the "dot com boom", with its fake companies and fake prosperity. That caused a major change in the culture, away from engineering and towards marketing. When the bottom fell out of the dot-com boom, most of the marketing types left. The number of twentysomethings in San Francisco dropped by half. (A friend in the club business says "and the other half are working their butts off and don't go out much.") The big name in Silicon Valley now is not HP or Intel or IBM or National Semiconductor or Fairchild. It's Google, which is an ad agency. That's a huge change in emphasis.
The innovation culture is declining. Portola Valley (a rich suburb) used to have the highest percentage of patent holders of any US community. That's dropped. There's not that much exciting innovation going on. I go to venture capital meetings, and the ideas being presented are just not very exciting. (I've heard a pitch for a social network for cats. And that made it through two rounds of filtering before I heard it.)
People are still struggling to get semiconductor line widths down, solar fab costs down, and such. But that's a grind. Mobile devices are not a fun area in which to work - the weight budget, the cost budget, the power budget, and the time budget are all very tight. The manufacturing is in Asia, anyway, and the engineering is going there. New areas aren't appearing.
There's noise about "green tech", but realistically, "green tech" is either vaporware, like the "smart grid", silly, like small windmills, or something that requires massive manufacturing, like big windmills. Five years ago, the noise was about "biotech", which doesn't employ many people.
Fewer young people in the US are going into engineering, and that's a rational decision. It's hard, it's expensive to study, your job may be outsourced, and it's now a low-status field. In 1970, lawyers and electrical engineers made about the same amount of money. That was a long time ago. On the other hand, in Asia, an EE degree puts you in the top few percent of the population in terms of income and status.
US government polices haven't really had much of an effect one way or the other on Silicon Valley, except that allowing the runup in real estate increased living costs substantially and that free trade has made outsourcing so easy.
And what people seem to not understand is that Americans bring unique skills to technology.
Whilst I'm sure America has great education and a skilled native workforce - this kind of superiority complex isn't really doing you any favours.
I do agree with you that Governments are vaguely accountable for distoring the workforce markets at the behest of large corporations - unfortunately there isn't an easy fix for that as the deck is rather stacked against the private individual in most western economies.
Agree completely. To further illustrate to people who don't understand what we're talking about, say some group or another puts a measure on the ballot that reads something like this:
After-school sports programs are a valuable part of youth education. They increase socialization among youth, promote general health, and combat the rise of obesity in America. In addition, studies have shown that after-school sports programs typically lower rates of violent crime in affected areas by 29 percent. At present, however, such programs are dangerously underfunded. This bill proposes that California earmark $18 million per year to promote after-school sports programs. As this money will come from the general fund, it will require no new taxes. School district administrators will be required to submit budgets to state agencies for approval of their share of the funds, to ensure full accountability to the taxpayer.
So Joe Voter reads this, goes, "Sure, my lazy-ass kid probably should get out and play sports more," and votes Yes. The bill passes.
What Joe Voter has done is take $18 million per year out of the general fund, where it could have been spent on various under-funded services in tough economic times, and earmarked it for after-school sports programs, come hell or high water. School can't afford books? At least it has an after-school sports program.
And what Joe Voter might not have even understood at the time he voted for this measure is that traditionally, after-school sports programs had been managed by local nonprofits, rather than being funded by school districts. Under the language of the new law, school administrators now have the additional administrative burden of producing a budget for after-school sports, or their share of the funding will be cut. And if they take the money but don't spend it on after-school sports, they will be called to task for "accountability." And who wrote this bill? The accounting firm who stands to gain the contract for managing the invoicing and budgeting of the after-school sports programs.
This is a totally made-up example; I don't know the specifics of any bill that resembles this one. It's just to give you an idea. But each election, California ballots have a dozen or so bills that read just like this one, and if you don't read the information carefully, it's easy to make mistakes.
Breakfast served all day!
You are right on target; I had some serious money to invest in a startup in CA, but the sheer humiliation involved with the immigration process just made me sick. Couple that with a sad growing xenophobic hatred for immigrants, from people with no understanding of economic change, and a firm belief that anyone not born in sacred american soil must not be as smart as them, as deserving as them. It's like Google and Yahoo, founded by *those horrible people==immigrants* do not employ Americans. I don't think for a second that SV is sinking; it will float because of its sheer brainpower, money, and network-effects magnetism. But the USA is--you can't live on borrowed money and think that no troubles will happen, ever. China has, with its 2+ Trillion of greenbacks, bought the USA, and it's just waiting for the receipt. F**k everything; my money is now on gold while I wait for the dollar collapse.
Wanna blame? Blame yourselves !
Silicon Valley's glory and gloom has nothing to do with H-1.
Silicon Valley bloomed in yesteryears because of the incentives that were there for innovators to innovate.
Innovators were aplenty, and they were willing to share the findings to each others, and they actually encouraging each others to do more !
There were no patent trolls back then. No teams of lawyers who will sue innovators to bankruptcy or subpoena them to court to explain why they come up with this little piece of code/gadget/idea which happens to have similarity to another piece of code/gadget/idea.
In other words, there were no rent-seekers back then.
Nowadays? There are more rent-seekers in Silicon Valley than the innovators.
Blaming the H-1 visa is too easy, and everyone is doing just that. But will that help Silicon Valley?
What if all the H-1 visas are revoked tomorrow? Do you seriously think that Silicon Valleys can magically bloom again, just like that?
C'mon, guys ! Use your brain for once and stop regurgitating the vomit of others.
And PS. I was in Silicon Valley when it blooms, and yes, I was one of the innovators. Now I am no longer in the Silicon Valley, and heck, I am no longer staying in the United States, and you know why? Because I have had enough of those rent-seekers !
Either you'll have more HB1s inside America, or you'll have competition from abroad. This is a binary decision.
Err, no.
A 3rd way would be to scrap the H1B visa program and replace it with a visa that is officially an immigration visa, not a temporary worker visa. The way it is now, H1B visa holders are at the mercy of their employers if they want to immigrate because switching employers means restarting the green card process and the green card process generally works out to about the same duration as an H1B visa + renewal. So, switch employers more than once or after a couple of years and you are essentially guaranteeing that you won't get a green card. A fix to the system like that puts visa holders on an even competitive field with citizens which will serve to increase the bargaining position of all employees.
Long-term, that's better for the country anyway. We need to encourage the brain-drain into the US to continue as it is now, we've become less hospitable to foreigners and at the same time their home countries have become a lot more hospitable to highly educated workers. Changing H1B into an official immigration-path visa would go a long way towards tilting the scales back in our favor.
When information is power, privacy is freedom.
Dude, take your pick. Either you'll have more HB1s inside America, or you'll have competition from abroad. This is a binary decision.
Wow, this is so completely wrong that I'd think even Slashdot mods would see through the fallacy.
It's not a binary decision. The U.S. will see fierce competition from abroad whether or not we import hordes of H1-B workers during an economic crisis when unemployment is already high.
And if you think importing hordes of H1-B workers will "save" the U.S., you're a deluded fool. The main impediment to the U.S. competing is our cost of living, and no, importing a horde of H1-B workers won't help.
But of course, all of those 5.700.000.000 people from outside America aren't as smart or deserving as real Americans...
Ah, yes. You don't have a real argument, so you throw in an appeal to emotion.
Now I am fully aware that this is a fine and dandy way to waste some good earned karma, but sorry, it's much closer to the truth.
Good job, lock in your +5 with the old "I know this will get me modded down..." trick.