I think it'll be harder to kill of what Silicon Valley has become than what Michigan was:
Michigan was for at least a couple of periods (e.g. before the Great Depression and after WWII when every industrialized consumer economy's factories were largely destroyed, aside from Great Britain) a or the best place in the world to build cars. It stopped being so due to bad management at three companies and bad government at the national level (Wagner Act, CAFE). It was (and maybe still is) a good place to design them, but that requires good management (e.g. look at Toyota's sharp (for them) decline in quality, mostly due to design errors).
California has worse government, which has killed the manufacturing part of Silicon Valley (e.g. are there any production fab lines still operating there?), but I'm not sure its government can kill off the design part of things. To do that it would have to make a middle class existence impossible. And the very nature of SV companies makes it impossible for bad management to kill the local part of its "industry".
But Detroit was much more than that in its heyday: it was a symbol of American industrial might. The birthplace of the assembly line. The place where other industries looked for process innovations. The biggest growth industry in America. (If you look at which professions did well during the Depression, "gas station attendant" and "automobile mechanic" were at the top of the list.)
Much like how Silicon Valley is currently the symbol of American innovation. The birthplace of the microprocessor. The place where other industries looked for process innovations. The biggest growth industry in America. (If you look at which professions did well during this recession, "Web Developer" and "Software Engineer" are near the top of the list.)
Detroit didn't start out as 3 gigantic car companies with bad management. Before WW2, there were literally hundreds of automobile startups. Everybody had an idea for how to build a better car. There's a nice long list of them on Wikipedia:
But eventually, most of them went bankrupt or were absorbed by the Big-3. And that let the Big-3 get complacent, which let foreign competition kill them (undoubtedly helped along by government). The same thing could easily happen to SV's tech industry, given a period of consolidation.
Competitively manufacturing a car became a more and more expensive thing as volume sales allowed steadily more serious tools and tooling to be applied to the problem. Per unit design also became cheaper as volume rose.
As far as I can tell the barriers to entry in much/most/all but x86 processors??? of what Silicon Valley does are steadily dropping and look to continue. The process of design also looks like it's getting better/faster/cheaper for a whole bunch of reasons, and I doubt that happened in a big way in the auto industry until CAD was adopted, by which point Chrysler had probably bought AMC, finishing US car industry consolidation.
Consolidation is fine for an industry as long as it doesn't stop new companies from forming and becoming successful.
And, hmmm, a note on the Big-3: how many of their competitors failed to exit the singularity of WWII? All got converted to wartime production, did some not bother to go back to cars and/or civilian trucks?
It depends a lot on what the dominant technologies are in 50 years.
It's non-trivial to become a big search engine like Google. It's non-trivial to develop an image-editing program like PhotoShop. It's non-trivial to build a language runtime and ecosystem like Java, or to set up a content network like Yahoo, or to make scalable databases that run on all sorts of platforms like Oracle.
Right now, there're lots of new markets being formed, which opens up room for lots of new startups. But will those markets get consolidated into features of big tech companies? Or will they continue to nurture small independent players?
Can you point to anything that indicates a consistent trend towards "big tech companies", especially ones that stay successful for a long time? Relational databases are the only one I can think of at the moment (Oracle, DB2 and SQL Server being the Big-3 here). And note how people are using non-SQL databases to get a lot of things done that were once the domain of relational databases.
(In the data warehouse/OLAP field, don't there continue to be a lot of small and medium players?)
One thing I noted about Microsoft before the Ballmer era was that the secret of Microsoft's success was consistently writing software that basically works. Microsoft in large part "won" by default, too many of its competitors lost that ability (and many would say Microsoft started losing it with Longhorn).
Let me explore this a bit more: I say that there's something fundamentally different between the middle two companies/areas you cite and Oracle's with databases. Oracle has a large core of code it has to keep working. If Sun went poof, the Java ecosystem would continue without much pause. If/when Yahoo goes poof, will anyone significantly outside of it really care?
(I don't know enough about PhotoShop to comment on it, and while it's non-trivial to become a big search engine, enough companies continue to try at something like Google's scale (e.g. Yahoo, Microsoft ... and look at Wowd for a disruptive attack on the problem) that I'm not too worried as of yet. Ah: PhotoShop is a sticky application, switching to another vendor is expensive, search is not. Advertising is in between.)
I think it's more than new markets. E.g. Java was aimed at one new market (appliances), released for another (web browsers), but ended up being wildly successful in the second oldest (data processing; only number crunching is older ... and Sun is addressing that with Fortress in the Java ecosystem).
Search was not a new market when Google appeared on the scene, e.g. it replaced AltaVista for me. This is a field where creative destruction can renew a sector instead of just replacing it.
Let me point out something that I meant to emphasize about Silicon Valley that will, I think, continue to be a key to it's health: non-competes are essentially unenforceable in California. This helps the sustaining creative destruction, starting with the first two silicon companies (Shockley Semiconductor -> Fairchild Semiconductor -> a constantly cross fertilizing diaspora).
Yes, another state that has other good SV style characteristics might adopt that, but I suspect none will.
The government here has focused on raising taxes, putting off fixes on the budget until tomorrow which never comes.
The infrastructure is allowed to erode and this last year $175 per pupil was cut from education. They won't even plow the snow on weekends due to budget problems.
Jobs are to be created not by private industry, but by the State. Sound familiar?
In Michigan we know that goverment creation of jobs doesn't work. The nation as a whole has yet to learn that valuable lesson.
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[ 4.6 ms ] story [ 36.0 ms ] threadMichigan was for at least a couple of periods (e.g. before the Great Depression and after WWII when every industrialized consumer economy's factories were largely destroyed, aside from Great Britain) a or the best place in the world to build cars. It stopped being so due to bad management at three companies and bad government at the national level (Wagner Act, CAFE). It was (and maybe still is) a good place to design them, but that requires good management (e.g. look at Toyota's sharp (for them) decline in quality, mostly due to design errors).
California has worse government, which has killed the manufacturing part of Silicon Valley (e.g. are there any production fab lines still operating there?), but I'm not sure its government can kill off the design part of things. To do that it would have to make a middle class existence impossible. And the very nature of SV companies makes it impossible for bad management to kill the local part of its "industry".
Much like how Silicon Valley is currently the symbol of American innovation. The birthplace of the microprocessor. The place where other industries looked for process innovations. The biggest growth industry in America. (If you look at which professions did well during this recession, "Web Developer" and "Software Engineer" are near the top of the list.)
Detroit didn't start out as 3 gigantic car companies with bad management. Before WW2, there were literally hundreds of automobile startups. Everybody had an idea for how to build a better car. There's a nice long list of them on Wikipedia:
http://en.wikipedia.org/wiki/List_of_defunct_United_States_a...
But eventually, most of them went bankrupt or were absorbed by the Big-3. And that let the Big-3 get complacent, which let foreign competition kill them (undoubtedly helped along by government). The same thing could easily happen to SV's tech industry, given a period of consolidation.
A lot can happen in 50 years.
Competitively manufacturing a car became a more and more expensive thing as volume sales allowed steadily more serious tools and tooling to be applied to the problem. Per unit design also became cheaper as volume rose.
As far as I can tell the barriers to entry in much/most/all but x86 processors??? of what Silicon Valley does are steadily dropping and look to continue. The process of design also looks like it's getting better/faster/cheaper for a whole bunch of reasons, and I doubt that happened in a big way in the auto industry until CAD was adopted, by which point Chrysler had probably bought AMC, finishing US car industry consolidation.
Consolidation is fine for an industry as long as it doesn't stop new companies from forming and becoming successful.
And, hmmm, a note on the Big-3: how many of their competitors failed to exit the singularity of WWII? All got converted to wartime production, did some not bother to go back to cars and/or civilian trucks?
It's non-trivial to become a big search engine like Google. It's non-trivial to develop an image-editing program like PhotoShop. It's non-trivial to build a language runtime and ecosystem like Java, or to set up a content network like Yahoo, or to make scalable databases that run on all sorts of platforms like Oracle.
Right now, there're lots of new markets being formed, which opens up room for lots of new startups. But will those markets get consolidated into features of big tech companies? Or will they continue to nurture small independent players?
(In the data warehouse/OLAP field, don't there continue to be a lot of small and medium players?)
One thing I noted about Microsoft before the Ballmer era was that the secret of Microsoft's success was consistently writing software that basically works. Microsoft in large part "won" by default, too many of its competitors lost that ability (and many would say Microsoft started losing it with Longhorn).
Let me explore this a bit more: I say that there's something fundamentally different between the middle two companies/areas you cite and Oracle's with databases. Oracle has a large core of code it has to keep working. If Sun went poof, the Java ecosystem would continue without much pause. If/when Yahoo goes poof, will anyone significantly outside of it really care?
(I don't know enough about PhotoShop to comment on it, and while it's non-trivial to become a big search engine, enough companies continue to try at something like Google's scale (e.g. Yahoo, Microsoft ... and look at Wowd for a disruptive attack on the problem) that I'm not too worried as of yet. Ah: PhotoShop is a sticky application, switching to another vendor is expensive, search is not. Advertising is in between.)
I think it's more than new markets. E.g. Java was aimed at one new market (appliances), released for another (web browsers), but ended up being wildly successful in the second oldest (data processing; only number crunching is older ... and Sun is addressing that with Fortress in the Java ecosystem).
Search was not a new market when Google appeared on the scene, e.g. it replaced AltaVista for me. This is a field where creative destruction can renew a sector instead of just replacing it.
Yes, another state that has other good SV style characteristics might adopt that, but I suspect none will.
You can't compete with companies who aren't required to pay their workers.
The infrastructure is allowed to erode and this last year $175 per pupil was cut from education. They won't even plow the snow on weekends due to budget problems.
Jobs are to be created not by private industry, but by the State. Sound familiar?
In Michigan we know that goverment creation of jobs doesn't work. The nation as a whole has yet to learn that valuable lesson.