Cal's Enrico Moretti argues for Silicon Valley's future dominance

Just finished Cal economist Enrico Moretti’s excellent “The Geography of Jobs.” Moretti has a way of looking at things we all know in new and refreshing ways. Why is it a place like Silicon Valley builds on its own success? Why are the rich getting richer while the poor get poorer. Is creating some type of jobs actually better than creating other types of jobs?

The book (yes, I’ve written about it before) will very likely challenge your assumptions. And not to ruin the ending — spoiler alert — it will convince you that unless we as a country repair our failing education system, we’re doomed.

But I was particularly riveted by one discussion Moretti carries on with himself in the book. On Tuesday, I will moderate a panel discussion among innovators at Frost & Sullivan’s annual GIL 2012: Silicon Valley. (I’d love to hear from you with any questions you’d like me to pose.)  One of the questions I want to raise is: Is Silicon Valley’s dominance as a global innovation hub assured? Or is the valley vulnerable?

Think of what’s going on in the world and the many areas in which the United States is falling behind, particularly when it comes to educating the next generation of innovators. And think about the lightning fast communication methods we’ve created. Don’t they mean that where you are really doesn’t matter anymore?

Not so fast, Moretti says in the book.

“One of the most intriguing paradoxes is that our global economy is becoming increasingly local.  Despite all the hype about exploding connectivity and the death of distance, where we live and work is more important than ever. Our best ideas still reflect the daily, unpredictable stimuli that we receive from people we come across and our immediate social environment. Most of our crucial interactions are still face-to-face, and most of what we know comes from the people we know, not from Wikipedia.”

Think about it: companies that have few historic ties to the valley come here to innovate. Ford, GM, Volkswagen. Walmart came here to figure out its online strategy. One of the panelists Tuesday will be Busy Burr, who works for Citi’s venture incubator. Why does a big global venture firm need a Silicon Valley outpost? Why do you think? This is where the innovation and the innovators are. Think Square, PayPal, Google Wallet, Quicken, Wealthfront and on and on.

All of which argues for the valley’s future as an innovation cluster. But is it a given?

What do you think?

Mike Cassidy Mike Cassidy (173 Posts)

I write about the culture of Silicon Valley for the San Jose Mercury News.