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18 Feb 08

We are not 'the next Silicon Valley' by Margaret Pugh O'Mara (Crosscut Seattle)

Really interesting article from the historian's perspective on what it takes to "be" Silicon Valley (hint: certain historical confluences helped) and why it's unlikely that another place will "be" just like that. On the other hand, great places can build on their core strengths, and there are lessons to be learned in this. As O'Mara writes: "In this worldwide network, the most vital innovation centers are those that know their own strengths, provide exciting and dynamic environments for people and firms, and have the resources and institutions that provide a home for new and exciting ideas." I added a comment to this article, particularly as it jives with something Richard Florida also posted today.

www.crosscut.com/...+%27the+next+Silicon+Valley%27 - Preview

business creatives crosscut margaret_o'mara seattle silicon_valley technology

Seattle should build on its local strengths while remaining a key part of the global network of technology industries
Silicon Valley resulted from a combination of powerful local institutions, savvy real estate development choices, immense capital investment by the Cold War military-industrial complex, and the simple good fortune of being on the right side of national economic and demographic trends. The repeated failures of other places to replicate that success – much less seize Silicon Valley's high-tech mantle – attest to the trickiness of getting this formula right.
The lessons of the tech industry's Cold War-era infancy still hold true today.
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- You need lots of money that can be spent (somewhat) recklessly. Military grants and contracts provided the capital needed for Valley pioneers like Hewlett-Packard to survive in their earliest, leanest years and created a demand for sophisticated technologies before there was a sizeable commercial market. As military contracts declined in the late 1960s, private venture capitalists and angel investors rose to take their place, giving smart but untested people repeated opportunities to innovate and develop new products.
- Like the Bay Area and other gold- and silver-rush cities of the American West, it has a long tradition of supporting innovators and iconoclasts. But it is only very recently that the local venture pool has reached critical mass – thanks in large part to the individuals who benefitted from the boom days of Seattle's first tech wave in the 1990s.
- Stanford University was not solely responsible for building Silicon Valley, but it had a great deal to do with it. But the mere presence of a big university is not enough – and this is one crucial fact that so many would-be Silicon Valleys have gotten wrong. A university or other research institution has to have strong programs in the disciplines that matter to high tech. It needs to have the budget and willingness to engage in things like university-industry partnerships and to encourage technology transfer rather than hobbling it. And strength is in numbers: It's important for a region to have one of these institutions, and it's even better for a place to have many of them.
- You need to be a place that attracts talented people and retains the ones you've already got. Silicon Valley grew because it was a place with qualities that attracted people who had the education, economic resources, and social advantages to live anywhere they chose. It was located in an economically booming state in a prosperous nation, within commuting distance of a major city, but with open land available to build suburban houses, research parks, and highways. It has been able to create an environment that allows white-collar high-tech workers to live, work, and network in something of a self-contained bubble.
- Retention of talent also matters. Cities like Philadelphia and Baltimore have some of the top-ranked research universities in the world, but the alumni of schools like Penn and Johns Hopkins often hop the first Amtrak out of town after graduation.
- Seattle has excelled at attracting talented people; its high proportion of college-educated residents attests to this. It hasn't done as well at producing them. The people who went to college here make up a relatively small part of the tech workforce. In Silicon Valley, Stanford and Berkeley pulled talented students to the Bay Area from across the country and the world. Many of the builders of the Valley, from Hewlett and Packard to Google, are products of local universities. A region's students are essential to its future economic success.
- You need to build on existing strengths, not follow the next big thing. This is another one that many Silicon Valley wannabes get wrong. As the eminent urban scholar John Friedmann puts it in his book The Wealth of Cities, "cities are not containers." The perpetual pursuit for outside capital – and transplanted ideas and innovations – is a far less productive strategy than building on core competencies. Thirty and 40 years ago, regions around the world were trying to emulate Silicon Valley by building semiconductors; today, nearly as many places are fixated on becoming the next biotech hub or the next capital of nanotechnology. Simple rules of economics dictate that few of these aspirants will meet their goals.
- Silicon Valley succeeded not because of the "silicon" but because it was doing something that complemented existing regional strengths. The area had been a hotbed of amateur tinkering with radio technology since the 1910s; faculty and students at Stanford had been working on transistor technology for a generation. Similarly, Seattle was launched onto the global economic map by technologies and companies that built on things local people and firms already did well. Nordstrom injected a new level of customer service to selling shoes; Starbucks did the same thing years later in selling a cup of coffee.
  - Ha, no kidding with the tinkerer aspect: think of Doc Searls and his "IT Garage"... - on 2008-02-18
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We are not 'the next Silicon Valley' by Margaret Pugh O'Mara (Crosscut Seattle)

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