Silicon Valley’s dirty little secret is that the startup boom is mostly a disguised jobs fair that directly benefits the big corporations. Occasionally, an innovative startup makes it past this stage but it has to be so bad that no one wants it — not even for its team. It’s from among those ugly ducklings that the swans of the new age emerge: FB, Goog, Twitter, Yahoo! and others — no one wanted them at first, then they couldn’t get enough of them.
In 2010, Silicon Valley accounted for the lion’s share of venture-capital investment by far: $9.1 billion, or about 40 percent of the total. New England, with its high-tech complex running from Cambridge and Boston to the surrounding Route 128 area, was second with $2.6 billion, 11 percent of the total. New York, with its newly ascendant Silicon Alley, was third, with roughly $2 billion, or 8.6 percent. The Southeast states — mainly North Carolina but also Florida, Georgia, South Carolina, Mississippi, and Alabama — attracted $1.2 billion (5.1 percent) mainly concentrated in biotech, software, telecom, and media. Texas accounted for close to another billion ($942 million), or 4.1 percent with its investments mainly focussed on energy as well as software, media, and semiconductors. And while the level of venture investment in the South-Central states (including Oklahoma, Arkansas, Kansas, and Louisiana) remains low relatively speaking, the region saw a staggering 540-percent growth between 2005 and 2010, the largest increase across any region of the country by far. Overall, roughly one in ten of the nation’s venture investment dollars are spent in the South.
- Richard Florida, The Spread of Start-Up America and the Rise of the High-Tech South
Florida is making a super weak argument here. The entire south — southeast and south-central states, and Texas — collectively raised about $2B in venture in 2010, which is the same as New York City.
Besides, innovation culture is an emergent property of cities, not broad geographic regions. Would be much more useful to see this broken out by cities, where I am sure that the Geoffrey West superlinearity equation — Y(0) = N0Y(t)B — would predict that a city of 2 million will get 1.15 times as much as a city of one million, on average, because B ≈ 1.15.
Silicon Valley's Disruption Deficit Disorder - Umair Haque
Absolute must-read from Haque as to why Silicon Valley is fading:
Quick: what would you call a business whose apathetic, listless — and sometimes irate — customers are starting to walk away, whose former blockbuster is becoming today’s lower and lower margin snoozer, whose most promising firebrands would rather eat a pound of plutonium than obey the conventional wisdom, and whose future is openly questioned by its own tribal elders? I’d call it a business for whom the bell of crisis is tolling the zero hour. Welcome to Silicon Valley — that intersection of venture capital, start-ups, markets, and IPOs — in the 21st century. Today, America — and the world’s — great engine of innovation has got Disruption Deficit Disorder.
[…]
So here’s my impertinent, and perhaps gigantically thick-headed, suggestion: maybe, just maybe: Silicon Valley should be the crucible of 21st century capitalism instead of the last bastion of 20th century capitalism.
[…]
What the Valley might just need, I believe, isn’t a host of new technologies. It first needs a host of new institutions, updated for 21st century economics (like those I wrote about last week). Silicon Valley and Silicon Alley are currently clusters of technological innovation — but what they might just have to become in the 21st century is clusters of innovation for our basic, fundamental economic institutions instead.
Amazingly radical, countercyclical thinking: we don’t need to get back to doing business the way we did prior to the econolypse: we need an entirely different notion of ‘business’ to break out of the ruts of 20th century industrial dogma.
