People around the world want to be the next Silicon Valley but today's version may not be the kind of job-generating machine that people expect. This was the old Silicon Valley which in the late 70s through the early 1990s reated all sort of jobs and spread the wealth. That Valley barely lives today.
Paul Graham is correct when he states that the area did not grow because it had industrial parks; it was clearly a question of money, people and timing. But the people who made the place magical extended beyond Stanford Phds or scions of great families--- Graham's core of nerds and rich. Instead many of the founders were nerdy Midwesterners like Robert Noyce , brash New Yorkers such as legendary venture capitalist n Valentine, a graduate of Fordham, as well as growing legions of people from India, China, Israel, Iran, the United Kingdom and a host of other places.
Why did they come? Clearly not for the "hip and cool" urban charms of the Valley which, to be blunt, didn't much exist then, or today for that matter. To connect the rise of the Valley with the Bohemian culture of San Francisco, as both Graham and Richard Florida do, always seemed to me a real stretch; for most techies back then, San Fransciso was not a business center but someplace to eat dinner or take the relatives out when they made it to the Coast. Even today even the "capital of Silicon Valley", San Jose, seems more like Modesto by the Sea than San Francisco.
When I was reporting on the Valley back in the 70s and 80s, it certainly did NOT display the ambiance preferred by "the creative class" . Coffee came in styrofoam cups and lunch was often tasteless sandwiches wrapped in cellophane. But it was also a place that created hundreds of thousands of jobs for all kinds of people , not only for academic hotshots. Much of its hidden strength lay in a remarkable concentration of sub-contractors, many of them run by recent immigrants from East Asia
Even the Valley's origins are lost in the current technorati myth. A dirty little secret is that, for most of its first decades of development, much of the Santa Clara Valley's growth, as in Los Angeles, came from defense contractors . For much of the time, Lockheed Missiles and Space constituted the real cornerstone of the economy . Like the defense engineers who flocked to LA in the 1950s , the people who populated and firms like H-P the area largely came for the weather and to buy that ranch house on a cul-de-sac.
The lack of hip amenities did not stop the Valley of that time from producing an exemplar of democratic capitalism at its best, creating not only millionaires but also many simply successful middle and working class careers. Unfortunately, this idyll could not last. By the 1980s the Japanese, Korean and Chinese were beginning to tear holes in this version of the Valley. The alchemy of making semiconductors and computer systems was no longer the exclusive province of Americans, much less Californians.
When the place resurfaced from its early 1990s downturn, it did so in a dramatically different form --- more software oriented, less engineer-centric and far more dominated by Ivy League MBAs. Heavily hyped by an adoring east coast media, the new Valley elite also was much more "creative" culturally than the plastic pen holder types who built it in the first place. Some even opted for "personality" and moved to San Francisco, at least part-time.
But the key to making the whole reinvention work lay in the pool of venture capital that accummulated during the industrial period, and the insistence by the venture capitalist that the new dotcoms locate close by .The factory-free Yahoos, Googles and Ebays emerged squarely on the shoulders of industrial giants, the National Semiconductors, the Intels, the HPs, the Tandems, the Apples and the even the Lockheeds. This is something often forgotten today.
Does history matter in such things? I think so, do you?
"Next WeeK: The Next Silicon Valley? Part Three"
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