Ivan Chong: The I-Blog

Tuesday, March 01, 2005

Critical Mass in Silicon Valley

Recently, I had lunch with a venture partner and we discussed the state of innovation in Silicon Valley, as well as other parts of the world. It's pretty well understood that technology innoviation in Silicon Valley has been driven by several factors -- availability of engineering talent, partnerships between industry and academia, and lastly capital investment infrastructure. These days, such conditions are by no means unique to Silicon Valley. But then that begs the question -- will this area continue to be the fertile crescent valley of innovation? My associate proposed a new element that I'd not heard previously. He posited that Silicon Valley fosters innovation because it inherits the "49er spirit" -- an attitude that holds no tolerance for status quo. The gold-rush settlers came to Northern California because they wanted a better life and this area offered plenty of opportunity. Hence, a cultural attitude developed where it is not only permitted to challenge the status quo, but encouraged. (Think Apple vs. IBM in the 1980's).

To some extent, Silicon Valley culture is a more concentrated form of the immigrant culture for which the US, in general, is known. This reminds me of a quote I read in a recent editorial from a German newspaper.
Europeans today -- just like the Europeans of 1987 -- cannot imagine that the world might change. Maybe we don't want the world to change, because change can, of course, be dangerous. But in a country of immigrants like the United States, one actually pushes for change.
The craving for change and progress is more prevalent in Silicon Valley than in other parts of the US... so far. When added to other factors like engineering talent, academia, and venture capital, there is critical mass for innovation.

3 Comments:

  • "... availability of engineering talent, partnerships between industry and academia, and lastly capital investment infrastructure. These days, such conditions are by no means unique to Silicon Valley."

    The other explanation that I've heard is that employee-friendly laws favor Silicon Valley over place like Route 128. There may be an academic study done on this.

    By Blogger Steve Shu, at 8:26 PM  

  • This comment has been removed by a blog administrator.

    By Blogger Steve Shu, at 8:27 PM  

  • I have seen agent based models and related papers that describe Silicon Valley's propensity to innovate largely a function of concentrated entrepreneurship. Moreover, evolutionary economists describe the emergence of industrial clusters (such as Silicon Valley) a result of dynamic social effects. The inter-firm dynamics of entrepreneurial enterprises, particularly where firms increase specialization over time, can create opportunities for specializations by other firms. Thus, the successful fulfillment of a market niche creates new market niches. You can extend this concept to industrial regions, which like firms, have core competencies that impart comparative advantage. So over time, you have a positively reinforced system (eg. the industrial region) that innovates at an increasing rate.

    By Blogger amir, at 12:05 PM  

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