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How Silicon Valley Got That Way -- and Why It Will Continue To Rule

Posted by timothy on from the the-weather's-really-nice-too dept.

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.

23 of 123 comments (clear)

  1. How Detriot Got That Way -- and Why It Will.... by TWX · · Score: 4, Insightful

    How Switzerland Got That Way -- and Why It Will Continue To Rule

    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.

    --
    Do not look into laser with remaining eye.
    1. Re:How Detriot Got That Way -- and Why It Will.... by Anonymous Coward · · Score: 2, Interesting

      ^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.

    2. Re:How Detriot Got That Way -- and Why It Will.... by TWX · · Score: 3, Informative

      The most advanced silicon chip manufacturing plant in the world is in Chandler, Arizona, and the wafers made there are packaged into processors in Malaysia and Ireland. Many materials scientists work at the Chandler plant, not in Sunnyvale, because it's so much less expensive to live there.

      --
      Do not look into laser with remaining eye.
    3. Re:How Detriot Got That Way -- and Why It Will.... by Grishnakh · · Score: 2

      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 suddenly came to a halt there.

    4. Re:How Detriot Got That Way -- and Why It Will.... by Austerity+Empowers · · Score: 3, 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.

    5. Re:How Detriot Got That Way -- and Why It Will.... by binarylarry · · Score: 3, Funny

      ... at creating the world's strangest pornography.

      --
      Mod me down, my New Earth Global Warmingist friends!
    6. Re:How Detriot Got That Way -- and Why It Will.... by rtb61 · · Score: 2

      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..., likely makes the most sense if you want to attract and keep the best people. Ain't the bosses that make companies (time to drop the main stream media celebrity illusion), it's the workers (that is the reality).

      Note, one huge advantage with locating at the best locations away from major competitors, it makes it much harder for staff (and their families) to leave to go to those competitors especially if those competitors are in cheap ass undesirable locations in the middle of a desert (you'll keep the most long term productive and lose the greediest often medium term destructive).

      So pick a city from the lists, check regional language use, check for competitors and, then check costs. Equipment can go anyone, good staff will be much more choosy and where does count a lot for them. Give the staff good quality of life and they are unlikely to leave to go to a competitor at a worse location, you might still lose them to local industry at that location but at least they will not be going to major competitors. Don't forget things like universal health care (means you don't have to pay for it and can discount their wages because they don't have to pay for it either). Climate, beaches, parks, recreation, choice of schools etc. (smaller capital cities will generally work best).

      --
      Chaos - everything, everywhere, everywhen
  2. Remeber by Anonymous Coward · · 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.

    1. Re:Remeber by minstrelmike · · 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.

    2. Re:Remeber by circletimessquare · · 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

      --
      intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
    3. Re:Remeber by circletimessquare · · Score: 2

      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

      --
      intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
  3. How adorable... by fuzzyfuzzyfungus · · Score: 5, Funny

    The place where everyone goes to 'disrupt' things has assured us that business will continue as usual.

  4. Why would anyone start there? by Billly+Gates · · Score: 3, 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

    --
    http://saveie6.com/
    1. Re:Why would anyone start there? by kamapuaa · · Score: 3, 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.

      --
      Slashdot: providing anti-social weirdos a soapbox, since 1997.
    2. Re:Why would anyone start there? by hwstar · · Score: 2, Insightful

      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.

    3. Re:Why would anyone start there? by pspahn · · Score: 3, 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.

      --
      Someone flopped a steamer in the gene pool.
    4. Re:Why would anyone start there? by Billly+Gates · · Score: 2

      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 to your customers! How would you feel?

      The Non-Disclosure sounds evil, but it is not intended to mess with employees at all. They can leave if they are unhappy and work elsewhere. The point is to protect your IP and investment.

      --
      http://saveie6.com/
    5. Re:Why would anyone start there? by hwstar · · Score: 4, 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.

    6. Re:Why would anyone start there? by SvnLyrBrto · · 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.

      --
      Imagine all the people...
  5. Personally, I'd bet on Detroit (no joke) by Qbertino · · Score: 4, 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.

    --
    We suffer more in our imagination than in reality. - Seneca
    1. Re:Personally, I'd bet on Detroit (no joke) by DNS-and-BIND · · Score: 2

      Detroit's government deliberately drove off businesses. It took a long time to get to where it is today, and it was all part of the plan. Look up who Coleman Young was and what his policies were.

      --
      Shutting down free speech with violence isn't fighting fascism. It IS fascism!
  6. Water? by minstrelmike · · Score: 3, Interesting

    I actually did RTFA. The historical stuff is interesting. The assertion that no place else will ever come close is completely unsupported.
    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.

  7. Europe's SV by bre_dnd · · Score: 2

    Try Cambridge, with companies like ARM, Cambridge Silicon Radio/CSR (several billion chips sold) Cambridge University. Plenty of money in London, Europe's financial centre. Plenty of talent around, or attractable due to English being the universal language and European borders being open -- or old colonial ties. Or try Berlin for "frontier living".