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posted by martyb on Friday January 14, @04:23PM   Printer-friendly

The Secret to Building the Next Silicon Valley:

POLITICAL LEADERS HAVE been trying to replicate Silicon Valley’s high-tech magic since the invention of the microchip. A tech-curious Charles de Gaulle, then president of France, toured Palo Alto in his convertible limousine in 1960. Russian Federation President Dmitri Medvedev dressed business casual to meet and tweet with Valley social media tycoons in 2010. Hundreds of eager delegations, foreign and domestic, visited in between. “Silicon Valley,” inventor and entrepreneur Robert Metcalfe once remarked, “is the only place on earth not trying to figure out how to become Silicon Valley.”

In the US, too, leaders have long tried to engineer another Silicon Valley. Yet billions of dollars of tax breaks and “Silicon Something” marketing campaigns later, no place has matched the original’s track record for firm creation and venture capital investment—and these efforts often ended up benefiting multinational corporations far more than the regions themselves. Wisconsin promised more than $4 billion in tax breaks and subsidies to Taiwanese electronics manufacturer Foxconn in 2017, only to see plans for a $10 billion factory and 13,000 jobs evaporate after hundreds of millions of taxpayer dollars had already been spent to prepare for Foxconn’s arrival. Amazon’s 2017 search for a second headquarters had 238 American cities falling over each other to woo one of the world’s richest corporations with tax-and-subsidy packages, only to see HQ2 go to two places Amazon likely would have chosen anyway because of their preexisting tech talent. One of the winners, Northern Virginia, promised Amazon up to $773 million in state and local tax subsidies—a public price tag for gleaming high-tech towers that seems especially steep as Amazon joins other tech giants in indefinitely pushing back post-pandemic plans to return to the office.

While the American tech industry is vastly larger than it used to be, the list of top tech clusters—the Bay Area, Seattle, Boston, Austin—has remained largely unchanged since the days of 64K desktop computers and floppy disks. Even the disruptions of the Covid-19 pandemic have done little to alter this remarkably static and highly imbalanced tech geography.

[...] It wasn’t just tech policy that made these regions what they are, however. Social spending mattered too. In the prosperous postwar years, the GI Bill sent millions of veterans to college and helped them buy homes. States like California enlarged public higher education systems, making it easy to obtain a low-cost, top-flight university education. Schools and local infrastructure were well-funded, especially in the growing suburbs that many tech people and companies called home.

[...] The US government had a transformative impact on high-tech development when its leaders were willing to spend big money on research, advanced technology, and higher education—and keep at it for quite some time.

[...] The next Silicon Valley will not come from a race to the bottom, from who can offer the most tax cuts, the leanest government, the loosest regulations. It will result from the kind of broad, sustained public investment that built the original Valley.


Why do you think "Silicon Valleys" elsewhere did not become as successful?

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  • (Score: 0) by Anonymous Coward on Friday January 14, @06:10PM (2 children)

    by Anonymous Coward on Friday January 14, @06:10PM (#1212720)

    Silicon Valley didn't happen because of public investment, or as originally stated: "broad, sustained public investment"

    Want proof? The world is chock-full of places that received broad, sustained public investment. Most of them went nowhere, flamed out or even ended up as public budget sinkholes. The military-industrial complex in the USA alone is a rich source of examples. Seattle was supposed to be an aerospace mecca, and looked like it for a while. There was no shortage of money flowing in, the government did everything in its power to glad-hand everyone from Boeing's unions to various airlines. Now it's an afterthought with a few airports and airbases, but the accident of the computer, software and ecommerce industry landing now has a much bigger profile on the air quality in town. (Or does anybody here think that Boeing, which moved its HQ out ages ago, and is moving production out as fast as the NLRB will let it, swings a bigger dick than Google, Tableau and Amazon?)

    What other examples? Detroit sucked in vast quantities of government money, but the expertise rippled outwards and the industry couldn't keep up localised prominence and sources of innovation.

    Enough about the USA, how about Europe, as another area that has wealth, expertise and a big-money attitude to making things happen? Kind of weak sauce there in terms of world-changing sources. Sure, they stand up software-based projects per mandate, but the kind of ferment of innovation? The closest thing that I can think of is the dutch dance music industry.

    What made Silly-con Valley possible was that there was an industry that the little guys could get in on, that depended heavily on low capital investment and broad applicability, and a minimum of hands-on interference from self-important bureaucrats. This produced a snowball effect because it looked like a low-input, high-return industry, which is a capital investor's wet dream. However, we're now in a position where software delivery is beyond one or two dudes in a bedroom (indie games notwithstanding), hardware delivery is a heavy industry equivalent in terms of investment, and so Silicon Valley is a big, dominant industry with a heavy concentration of expertise that is rolling on its own momentum. Creating momentum from the ground up is incredibly expensive.

    Looking to create the next one? Keep regulations lax, keep education (NOT certification or credentialism!) free or cheaply available, and keep infrastructure reliable. Then turn your population loose.

    Fund hobbyists and maker spaces, if you have to splash cash.

  • (Score: 0) by Anonymous Coward on Saturday January 15, @03:19AM (1 child)

    by Anonymous Coward on Saturday January 15, @03:19AM (#1212843)

    > how about Europe

    I give you England's Motorsport Valley []
    > Around 4,000 companies in the UK are involved in the motorsport industry, with an annual turnover of around £9 billion, with around 70% being exports.[2] It spends 30% of turnover on research and development.[2] There are around 25,000 qualified engineers involved in the UK industry. [sources are from 2010, numbers are up significantly since then] []
    > During the Second World war, the Thames Valley became important centre for aerospace engineering owing to its location which was ideal for building and servicing aircraft. Post the war many of the airfields and their engineers were no longer needed. This concentration of engineering talent was easily transitioned into motorsport alongside the abandoned airfields which proved to be the perfect infrastructure for racetracks. These conditions were too ideal to resist, and the valley saw motorsport companies flocking down to establish themselves here. The rest as they say was history — and the Motorsport Valley® was born!

    • (Score: 0) by Anonymous Coward on Saturday January 15, @04:12AM

      by Anonymous Coward on Saturday January 15, @04:12AM (#1212855)

      Sure, but point out what happened there: it wasn't the government deciding to do something, but more like opportunity based in the government's leftovers. The education and infrastructure were there, and thus you had an established surplus. It was a toybox after the adults had left the room, and a lot of inventive children looking for something to do, and a place to play. Everything flowed from that. It wasn't about a bunch of civil servants deciding that what the nation needed was a lot of racing technology in the Thames Valley.