Wednesday, July 14, 2010

Everyone wants to be Silicon Valley

For decades, politicians and business leaders from the rest of the world have come to Silicon Valley, wanting to create the next Silicon Valley.

From research of people like Martin Kenney, Anna-Lee Saxenian, Tim Sturgeon and others know the relevant list of preconditions for SV"s success.

Technology from universities, good industry-university relations (as in the Terman era), entrepreneurial culture, entrepreneurial infrastructure and last (but not least) venture capital. Oft-copied, these explanations for SV’s success might be necessary, but they do not appear to be sufficient to create a high-tech cluster.

And of course the other requirement for a cluster is to, well, be clustered. Spillovers happen in a cluster due to VCs visiting companies, universities talking to companies, and workers changing jobs — limiting the size of a cluster to (roughly) a radius of a one hour commute.

Meanwhile, since the end of the dot-bomb era, Silicon Valley has struggling with its raison d’├ętre, with many assuming that its salvation will be “clean” technologies such as renewable energy, energy efficiency and better life cycle consideration of material use and waste.
At the InterSolar trade show Wednesday, I picked up a renewable energy industry trade magazine enerG, which devoted its closing column to adapting a speech by Obam’s commerce secretary, former Washington Governor Gary Locke:

U.S. Needs to Become the Silicon Valley of Renewable Energy

For the Record is an edited excerpt of a speech … in Washington D.C. in February.

Two observations about the dubious economic logic of this article:
  • First, an entire country cannot be a regional cluster. Even in biotech — perhaps the most fragmented of America’s high tech clusters — leadership is concentrated in the Boston and San Francisco regions, with San Diego a distant third.
  • Secondly, if some place is going to be the Silicon Valley of renewable energy, why not Silicon Valley? That’s certainly what local entrepreneurs have had in mind for the past three (or even five) years.
However, to be fair to Secretary Locke, the original speech only warned against a future in which “Shanghai became the Silicon Valley of clean energy.” So the confused clusterology of the headline is due to the magazine editors, not a politician and lawyer.

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