“No place else — including Silicon Valley itself in its 2015 incarnation — could ever reproduce the unique concoction of academic research, technology, countercultural ideals and a California-specific type of Gold Rush reputation that attracts people with a high tolerance for risk and very little to lose.”
— Leslie Berlin, project historian for the Silicon Valley Archives at Stanford University and author of “The Man Behind the Microchip: Robert Noyce and the Invention of Silicon Valley,” in a Medium post about Silicon Valley then and now.
Among the things Berlin addresses: The role of government in Silicon Valley’s rise. Interesting in light of the valley’s complicated relationship with government now: in the wake of revelations about mass NSA spying; amid consumers’ love affair with companies such as Apple, Google and Facebook, whose practices have raised questions about their dominance; and as startups disrupt established industries, sending governments and courts scrambling for policies to keep up with technology.
Silicon Valley was kick-started by federal dollars. Whether it was the Department of Defense buying 100% of the earliest microchips, Hewlett-Packard and Lockheed selling products to military customers, or federal research money pouring into Stanford, Silicon Valley was the beneficiary of Cold War fears that translated to the Department of Defense being willing to spend almost anything on advanced electronics and electronic systems. The government, in effect, served as the Valley’s first venture capitalist.
Berlin also talked about the other kind of venture capital, noting that Sequoia Capital and Kleiner Perkins Caufield & Byers between them helped fund Apple, Amazon, Cisco, Google, Facebook and much more.
This model of one generation succeeding and then turning around to offer the next generation of entrepreneurs financial support and managerial expertise is one of the most important and under-recognized secrets to Silicon Valley’s ongoing success.
Another thing Berlin mentioned as key to the success of the valley: immigration. The issues surrounding this particular factor include: H-1B visas, which are always controversial. Many tech companies push for more, while workers in the United States complain that there aren’t enough jobs for them. (This was especially true after the dot-com bust.) Also, questions about diversity in Silicon Valley abound.
It is impossible to overstate the importance of immigrants to the region and to the modern tech industry… 2/3 of people in the Valley who have completed their college education are foreign born.
From 1995 to 2005, more than half of all Silicon Valley startups had at least one founder who was born outside the United States. Their businesses — companies like Google and eBay — have created American jobs and billions of dollars in American market capitalization.
A couple of last excerpts from Berlin’s piece:
If modern Silicon Valley was born in the 1950s, the region is now in its seventh decade. For roughly two-thirds of that time, Valley watchers have predicted its imminent demise, usually with an allusion to Detroit.
What is behind Silicon Valley’s staying power? The answer is that many of the factors that launched Silicon Valley in the 1950s continue to underpin its strength today even as the Valley economy has proven quite adaptable.
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