As we prepare to head to Silicon Valley in T-1 week (yay!), I wanted to give a brief background in how it came to be, some of the issues facing the Valley today, and if/where Silicon Valley 2.0 may arise.
- Silicon Valley is currently valued as a $3 trillion neighborhood
- Silicon Valley and San Francisco top the US venture capital investment list with a combined $13.4 billion
- Silicon Valley is home to the headquarters for 39 businesses in the Fortune 1000
- There are 76,000 individual millionaires and billionaires living in the Valley
- To afford a fair market price apartment, a renter would need a yearly income of $94,251.
“Silicon Valley USA”
Silicon Valley was born through many contributing factors, including a strong STEM research foundation amongst the vast universities, plentiful venture capital, and US Navy research and technology, to name a few. However, after World War II, many universities were experiencing surging demand due to returning students. To address these growth issues, Frederick Terman of Stanford University proposed the leasing of Stanford’s lands for use as an office park, with leases limited to high technology companies. Out of this, companies like Hewlett-Packard could move from small beginnings in a garage to an innovative office environment, opening the door for success. At the same time, William Shockley came along in the booming semiconductor industry and was the first to make transistors out of silicon as opposed to germanium. This garnered a report on the industry by Don Hoefler, entitled “Silicon Valley USA.” The name stuck thereafter, and one of the highest net worth neighborhoods was born.
The Race for Individuality or Uniformity?
Recently in the media there have been many remarks doubting the sustainability of the culture in Silicon Valley. Earlier in February, tech luminary Peter Thiel announced he is parting ways with the area, citing an intolerance of conservatism in the tech industry as a whole. And while it is often assumed that libertarianism dominates Silicon Valley, on a grander scale the tech titans almost hold a view much the opposite of the heroic, solitary individual. They tend to think that we are fundamentally social beings, investing their faith in the network, the wisdom of crowds, and collaboration. While they may gesture towards embracing individuality, they certainly have a different agenda when it comes to free will. Essentially automating our choices, algorithms suggest the news we read, the goods we buy, the paths we travel, and even the friends we invite into our circles. In a TED Talk, Eli Pariser succinctly describes this phenomenon, explaining that we get trapped in a “filter bubble” in which companies, like Facebook, use our data to constantly give us the news and information we crave, creating a feedback loop that squeezes us into narrower views.
The underlying dilemma, however, is mainly the biases that are apparent within the algorithms that are subconsciously influencing our day-to-day thought patterns. Obviously not intentional, but scenarios like Google Photos facial recognition comparing people to gorillas, Amazon Prime neglecting to deliver in predominantly black neighborhoods, and Microsoft’s AI-bot posting senstive content on Twitter show some of the blind spots that arise from homgeneity of thought in the work culture. Surely Silicon Valley certainly does not hold the sole responsibility, but this culture could slowly be erasing individuality to the point that some, like Thiel, are leaving the city they helped to build in hopes of finding a larger diversity of experiences.
Beyond this long-debated topic of tech subconsciously guiding our choices, another arises when considering the diversity in the Silicon Valley tech culture: what about women? As Julia’s blog post highlights some amazing success stories, a recent study published by Axios found that even the famously male-dominated Wall Street now employs a higher percentage of women than the tech industry. In both, only a quarter of leadership roles are occupied by females and historically female-led startups tend to receive only 2% of venture capital funding.
As it turns out, however, the industry may have just sabotaged itself and its own pipeline of talent long ago. In the mid-1960s, System Development Corp, a pioneering software company, enlisted two male psychologists to scout recruits. William Cammon and Dallis Perry profiled 1378 computer porgrammers, only 186 of whom were women, and used these profiles to gather conclusions about the ideal programmer. They found that those who succeeded at the job typically liked solving puzzles of various sorts and “didn’t like people, generally more interested in things.” This research was influential at a crucial time in the developing industry, and thus the common view of programmers with “beards, sandals, and rugged individualism” came about. This personality test was used for decades in the industry, and Silicon Valley is still seeing the backlash from it today. While there are certainly exceptions, like Larry Page and Sergey Brin who specifically seek out females for key positions, often qualified talent is still overlooked in the industry.
So, what do we do about all this?
While this has highlighted some of the issues among the idolized Valley, clearly there are many more positives that have allowed the area to make tech the new oil. However, it takes much more than geeks and good research facilities to make it happen. A true tale of innovation requires three elements: talent, technology, and tolerance. Many can recruit top talent and technology has seeped into every corner of the world, but there is often a a void when it comes to the spirit of cooperation and tolerance of risk that Silicon Valley embodies. As cities all over the world strive to enter the mix as a home for businesses to plant their roots, here are a few that I think may be able to fill that latter category. So, where might TechTrek go in 2030?
- Shanghai: Recently joined the list on the top 10 startup ecosystems, which makes sense in addition to the innovation and massive inflow of capital currently in Asain markets overall.
- Israel: Israel has been enjoying growing collaboration and funding from the East, with currently 4,300 startups in the region, a rate that is second only to Silicon Valley. They also have a similar story to the emergence of a catalyst company, paralleling HP who started the “garage entrepreneurial” spirit in Silicon Valley with ICQ who sparked the venture capital movement in Tel Aviv.
- Austin, TX: Austin is already a hub for startups, but because it’s not overflowing with venture capital firms, many startups here become financially sound and independent early on. This has instilled Austin entrepreneurs with a work discipline that’s based on impact and returns, which could lead to a entirely different culture of success.
- Atlanta, GA: Atlanta has 18 Fortune 500 companies , is a tech hub with an affordable cost of living, and is one of the fastest growing states for women-owned firms since 1997. In addition, it has also been named one of the best places to start a business by Forbes.
- Denver, CO: The state currently offers a range of financial incentives for entrepreneurs, and they are continuously investing in providing tech jobs, affordable housing, and building new communities. Educated millennials are flocking to Denver, with beautiful wildlife, mixed terrain, and laid-back attitudes attracting talent for the hundreds of startups that are being run from the mile high city.
These are just a few tech hubs that seemed to have potential throughout my research, but I’m sure you guys have plenty more possibilities to suggest in the comments below! Perhaps, in the end, there’s no need for a Silicon Valley 2.0. Silicon Valley can unite a hacker in Kiev with a protester in Istanbul, and anyone seeking this tech culture just needs a simple Internet connection to tap in. Unique and distinguishable innovation centers are arising all across the globe, but I’m sure this established area will not be forgotten any time soon.