Will Silicon Valley remain the stronghold for innovation
My answer to the question in Quora about - Will Silicon Valley remain the stronghold for innovation.
The other answers are all based on “The World Is Flat” point of view. The belief is populations, talents, capital, and economic opportunities are spread widely throughout the world. The United States is all but a small part of the globe. Its leading position is temporary. The rest of the world will eventually catch up. Such is the natural order.
This “The World Is Flat” assumption is intuitive and has some merit. But it is very unsatisfactory. For one thing it fails to explain much of what we observe in the world, that different geographic regions have clearly identified strength and weakness. Its prediction that everything will eventually even out is all but a conjecture. We find no validation of such in human history.
Instead I will pose some questions. I believe a lot more insight can be gained by pondering these questions than assuming things will naturally even out.
Is the world created equal?
The assumption of the “the world is flat” view is that there is no inherent advantage of Silicon Valley. The same ecosystem can theoretically be established anywhere in the world. This belief strongly contradicts reality. Silicon Valley stands out by many metrics like the amount of venture capital invested, the number of tech companies and the number tech workers they have. There are a few runner-ups. Otherwise the level of innovation in Silicon dwarfs the rest of the country. You can find a similar hierarchy elsewhere. In China, there is a lot of innovation in centers like Beijing and Shenzhen, but not so much in hundreds of cities otherwise.
On the other end of the spectrum, there are many very populous countries that have made negligible output in innovation, Nigeria, Indonesia, and Bangladesh to name a few.
The world is apparently not created equal (a factual, not normative statement).
How has the innovative industry developed?
The simple answer is to add the ingredients of capital, economic demand, talents, and academic institutes, mix them together and then we get a replica of Silicon Valley. Many governments have tried to do this top down. They attempt to create their version of “Silicon XX”. Most of these efforts fall flat.
There is a lot of study in the history and development of a region’s innovative industry. Many point to the intense interaction of entrepreneurs, venture capitalists, and academics. There is a cultural aspect of creativity and risk taking. There is also a concept of path dependency that the present is influenced by a specific sequence of steps taken in the past. Therefore every place has their destiny shaped by their history. Just adding the ingredients is not enough. A lot of circumstances have made Silicon Valley the way it is. It is not a natural path that other regions can follow.
Will the rich get richer?
The World Is Flatter has failed to account for the gravitational pull of innovative industry. Silicon Valley is a better ground for innovation because you are doing it with other creative people. The culture of creativity, the concentration of talents, and the services available give Silicon Valley a distinct competitive advantage to other places. Time and again people predict new companies will choose to start the business in a low cost area avoiding the pricey Silicon Valley. Time and again they are shown to be wrong. The truth is these new companies are getting a lot by locating in an innovation center so much that the extra cost is justified.
Recalling that “the world is flat” cannot explain the observation that the world is not created equal. “the rich get richer” concept explains it much better.
So will Silicon Valley hold its advantage forever. This is an easy question. The answer is no. Throughout history we have never seen any group hold power for a prolonged period of time. Given a long enough horizon, say in two generations, everything is a fair game. It is very likely this future will be a world we will not foresee today, one where new players will emerge and old leadership will be shuffled.
I imagine some day the Valley may finally be done in by the incessant waves of drought and fire, a more biblical ending than just falling behind to Chinese competitors.