19 Oct What makes Silicon Valley so different?
I spent last week in Austin, Dallas, and Boston, getting a first look at some very interesting technology start ups. (Yep, you guessed it, the search for DEMO 2007’s demonstrating class is in full swing.) Much of what I saw was quite impressive. It was also quite different from the usual fare of Silicon Valley.
Where Silicon Valley is at the apex of Web-based consumer software, Austin has strong leadership in IT systems management. In Dallas, I found an emphasis on the health IT market. In Boston, deep R&D blends easily with enterprise software and consumer applications.
As world markets strive to be the “Silicon Valley of (fill in the blank), the differences even among U.S. geographies has me thinking what makes Silicon Valley so different from other geographies that have the same raw ingredients you’ll find in the 57-mile stretch from San Jose to San Francisco.
Certainly, geography is one difference. The density of population on a relatively narrow peninsula means you’re never far away from some entrepreneurial activity. In fact, technology is downright hard to escape in the Bay Area. In every coffee shop, beat-up office complex, and waiting room you’ll find someone talking about – or creating – the latest, greatest technology something.
By contrast, Boston’s “High Technology Highway,” Route 128, draws a 60-plus mile arc around the city and its bedroom communities. Another 30 miles to the west, Interstate 495 sets a broader boundary around an area that once housed some of the biggest names in computing: Data General, Wang, Computervision, Digital, to name just a few. Within these bounds, a large and diverse population balances tech entrepreneurialism with a range of economic endeavors.
Indeed, economic diversity – or lack thereof – is another distinguishing factor of Silicon Valley, where an entire business and social infrastructure has formed to help young companies take root and grow. Texas has oil, agriculture, and aerospace. Boston has health care, academia, and The Big Dig. Silicon Valley has an ecosystem well honed to support entrepreneurs, from the density of venture investors to the landlord willing to exchange rent for equity. By contrast, the Texas venture scene is dominated by a single firm.
These factors are obvious differences, and for economic development agencies looking to base new growth on tech entrepreneurship, they suggest some directions. Concentrate entrepreneurship, as the city of Zaragoza in Spain is doing in a joint project with the Massachusetts Institute of Technology to build a “Digital Mile” city within a city. Focus financial resources into venture vehicles that build a practice of investment and incubation.
Still, these concepts don’t entirely account for the marked difference between the Valley and Valley wannabes. This difference is the intangible “it” that is as difficult to describe as it is to replicate. The spirit and culture of entrepreneurship thrive in Silicon Valley. It is a culture that eschews stability and certainty. When a business fails, its people scatter to new ventures that are the basis of new possibility and economic growth.
A tremendous amount of talent was housed in the aforementioned Boston-area businesses. Yet when these businesses fell on hard times, that talent tended to migrate to other, more established businesses. By rights, Boston should have been the largest hub of innovation and entrepreneurship in the late 1980s and 1990s. But “it” just didn’t happen.
Oddly enough, though, that may have accounted for a more stable economic environment in the greater Boston area. The ups may not be as high as they are across the country in Silicon Valley, but the lows aren’t as low, either.
There’s another benefit, too. The technology innovation that comes from outside the Valley is much more diverse, and arguably much more practical. I met about 30 companies across four days outside the Valley last week. Only two of those might have laid a claim to a “Web 2.0” moniker. That was refreshing.
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