The Next Silicon Valley

Russell Jurney and Bradford Cross wrote a thought provoking article “The Next Silicon Valley“.

The parts that I found particularly interesting are:

Many cities and regions outside the Bay Area have attempted to reproduce Silicon Valley.  Despite their efforts – the Silicon Valley ecosystem has remained highly localized.  That physical location would come to matter more than ever in a densely networked global economy is counter-intuitive, but economic clusters have come to dominate every area of technology.

Despite the Bay Area’s dominance, new micro-clusters sprout and grow across the globe.  As each new seed develops, the comparison is inevitably made: is this the next Silicon Valley?

Can VCs replicate the valley in Europe?

Is China the next silicon valley?

Is New York the Next Silicon Valley?

Thoughts on Creating a Russian Silicon Valley

Growing a Silicon Garden

Georgia Tech as the basis to try to develop a Silicon Valley

Along with these questions comes the occasional, is the valley losing its edge?

Is Dayton, Ohio the next Silicon Valley?
Dayton, Ohio is an interesting case in the history of innovation.

Dayton had more granted patents per capita than any other U.S. city in 1890 and ranked fifth in the nation as early as 1870.

Dayton was an innovation center for a short period of time, and the home of the Wright Brothers.

Wilbur did not attend Yale as planned.  Orville dropped out of high school after his junior year to start a printing business in 1889, having designed and built his own printing press with Wilbur’s help…Capitalizing on the national bicycle craze, the brothers opened a repair and sales shop in 1892 (the Wright Cycle Exchange, later the Wright Cycle Company) and began manufacturing their own brand in 1896. They used this endeavor to fund their growing interest in flight.

There were other people working on flying machines, and they had lots of government funding.  Many were earlier, had superior formal education, better funding, and better contacts.
But we all know who the Wright Brothers are because they were passionate and worked tirelessly to create working airplanes.  The Dayton area has been an innovation hub for aviation to different degrees ever since.  It was only after factors aligned to produce excellence in aviation that Wright-Patterson Air Force Base channeled federal money to sustain the cluster.

If you had a modern-day equivalent of the Wright Brothers in your city, would you recognize them, or are you to busy figuring out how to duplicate the valley?

A Culture of Innovation

In silicon valley, entrepreneurship is a profession and startups are an industry.  This is part of a culture of both bold and calculated risk taking, alongside an acceptance of failure.  The valley culture is the one factor that trumps all others.Creating a center of innovation requires creating a culture of innovation.

Some folks in NYC understand the value of this culture.

California should be NYC’s role model and ally. The enemy should be people and institutions who make money but don’t actually create anything useful. In NYC, this mostly means Wall Street, along with the Wall Street mindset that sometimes infects East Coast VC’s (emphasis on financial engineering, needing to see metrics & “traction” vs betting on people and ideas, etc).

The capital and talent network, combined with the culture of calculated risk taking and acceptance of failure is a potent combination that is extraordinarily difficult to emulate.

Toward A Local Vision

Attempting to replicate the valley means attempting the replicate all of its unique circumstances: its 100 year cultural legacy, its existing network of clusters, its financial ecosystem and network of service providers, and its strong research university with a focus on application.  You cannot simply jump to the present.  Nor can you simply mix the Valley’s ingredients in your city and expect similar results.

You can draw a similar path for Route 128 and Boston having arisen from the Lincoln Project for Nuclear Defense at MIT having a hard real-time requirement for computers, and research leading to the minicomputer and the birth of that startup ecosystem.  Although note – it hasn’t fared as well, lacking some of the cultural ingredients that makes the valley work so well.
Some people think that the capital infrastructure in the valley is the key – but remember that in the beginning there was no venture capital, and the early valley prospered without it.  Stanford professors were the first angels investors.  Nevertheless, we now enjoy the deepest and most savvy startup investment network in the world, which has become extraordinarily difficult to emulate.  New York City, with a truly massive investment network, has only a tiny fraction of that network with the requisite savvy to back technology startups intelligently.

A better plan than imitation is to reflect on what you are passionate about, what you can do now with your own location, what the advantages and disadvantages are, and start innovating in your own way.  What can your city be world class at?  As Steve Blank says, no successful startup ecosystem was built from local talent.  How can you draw the best talent from all over the world?  The valley draws talent from all over the world.  It hasn’t been dependent upon local talent since De Forest showed up at Federal Telegraph.  What can you do to attract world-class talent to a cluster you already have?

Can you create a center of innovation now in a totally different way?  Perhaps cheaper and in less time?  Perhaps new commodity technologies (broadband internet, cloud computing) and new industries (data mining) would allow something similar to occur without any initial government or university funding?

Effective stimulus of regional clusters requires that you identify and monitor the clusters you have.  To spend limited resources effectively, you must early detect shifts as clusters pivot and grow, one startup at a time, to guide your research university and spend incentives effectively.  Actively engage leaders in your cluster, find out where talent and capital are headed and then support those new directions.  For example, a watchful eye could have detected the emergence of Atlanta’s security cluster from its broader enterprise software and finance and payments clusters and directed stimulus at this area.

What factors are working in your city’s favor in a particular area more than any other city in the world?  The way to create the next silicon valley is to not try to create the next silicon valley, but to reflect on your city’s passions, circumstances, personality and resources, and then innovate accordingly.

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