Ask HN: Why is the US the center of the tech industry?

Such broad questions don't usually lead to high-quality discussions. It's better to submit articles presenting a point of view on the topic.

Read Steve Blank’s blog. He has several articles outlining how Silicon Valley started, why it continues, and why it isn’t easily replicated elsewhere.

We made the tech industry

My 2¢ in taking to people from other countries, it's the American attitude. Americans for better or worse think we can do anything, and they will try incessantly. They will start a business with far less experience and qualifications than others, pull themselves up by the bootstraps and potentially fail spectacularly - just to get right back up and do it again.

I do not get this sense taking to people from other countries at all, largely in part Canada and the UK. They aren't trying to change the world.

Government spending on infrastructure including defense. Defense has historically been the largest funder/purchaser of tech. Yes, we’re in a period where consumer tech is driving innovation, but that hasn’t historically been true.

The same reason it's the current largest economy.... a happy accident of history and geography.

Every other major economic power was devastated after WW2. Because the US was geographically isolated from the major theatres of war, it was in a good position to capitalise on the investment in technology at the dawn of the transistor age.

You narrow tech down to the software. If you add electronics and engineering, well, you will see also a bunch of European and Japanese companies.

Since the big Intel cash out, it's been venture capital.

Europe & Asia is private equity territory, which is a fundamentally different attitude and approach to high-risk, high-growth business (as in they rarely do it). VC firms expect to make their money on IPOs & exits which encourages innovation and experimentation, while PE firms expect to make money from operations and interests on obliged loans which favors smart operations and good margins.

Accident of history and sheer momentum. We had the cash and research institutions during the beginning of the digital age, and as a result we have the brain trust for both programming and hardware design. Remember that a huge percentage of programming languages, documentation, and surrounding culture (blogs, etc.) are not only in English, but culturally American. That’s a huge advantage for America in the tech space.

Lots of human capital because A) we have a large population, B) we have the highest level of economic development in the world, and C) we've done a great job of importing talent.

We were the main beneficiaries of the Europeans driving out their Jewish population. As a group, European Jews are responsible for something like 25% of our intellectual output over the last century, but only make up 2% of our population. Lately we've been importing an intellectual class of similar caliber from the Indian subcontinent. Kinda hard to lose the race when you have a huge proportion of the world's intellectual talent.

These companies were built on the shoulders of giants in silicon valley which had a ton of cold war era science foundation grants helping to prime the emerging industry.

First of all, the technology industry itself is not just exclusive to the US. Samsung is south Korean, Nintendo is from Japan, Siemens is from Germany, ASML is from the Netherlands. All of these are highly technological companies, with Nintendo having been at the frontiers of technology since decades. But of course, Silicon Valley is unique with its high concentration of hightech companies. This has multiple reasons:

* The US federal government provided massive amounts of funding, especially in earlier years. Oracle for example was jumpstarted by the CIA, an US federal agency.

* Economically, the US is highly developed, and has a gigantic market with over 200 million people who all speak one language. The EU didn't even have the unified market since a few years ago, and there is still inconsistency regarding the language. China does have both a more or less consistent legal regime as well as a consistent language due to their past efforts to teach their population a common language (this is non-zero effort as Chinese dialects are so different to each other, probably if it weren't for political influence you'd classify them as several languages).

* California in specific has at-will employment laws meaning a start up can be wrapped up quickly without having to pay large sums of money to employees.

* The US federal government maintains a large spying apparatus which has been increased massively after the 2001 terror attacks. They don't just use it for evil terrorists. It has been confirmed multiple times that they perform industrial espionage against companies in western countries, supposed allies of the US. The US government then gives the results of the espionage to industrial partners.

* Nowadays there are of course massive network effects.

Its pretty much culture. The US is open to ambitious people from across the world unlike a lot of countries, the US is big un deregulation unlike Europe which stifles a lot of their companies, there's one language, there's a culture of acceptable failure, willingness to try despite lacking experience, and slow-moving governments.

Its probably more but this is what I've seen.

Freedom and democracy are vital to open and honest discussion, which in turn drives innovation. Sense of safety and security on all fronts let people concentrate on ideas and execution, rather than things.

A few things:

1. America's early expansion was designed to gain control over the entirety of the Mississippi river, which has the largest lockless waterway system serving the longest "useful" land area in the world with cheap boat transportation. This cheap transportation is the primary reason for American early development success, and continues to benefit America immensely to this day.

2. Every other developed country suffered massive losses in the world wars. America suffered no damage to her land or infrastructure, and was able to use her superior position at the end of the war to gain even more economic advantage over allies and foes alike.

3. America binged importing top scientific talent at the end of the second world war, most notably from Germany by offering them amnesty from war crimes (which massively boosted their rocketry, medical, and electronics industries).

The rest is largely snowball effect.

“It always seemed like when there was cool technology or things happening, it was kinda of in the United States. So, my goal as a kid was to get to America basically.”

Elon Musk

Large population also the fact that it is because it is. Lots of skilled people in tech move to the US to work so more companies start there which means more people move.

There are several things that contributed to the rise of the dominance of American tech industry. In no particular order:

* World War II. In WWII, the only country that had the means to meaningfully fund longer-term military research projects was the US; in other countries such as Germany and the UK, these projects were defunded or reduced in scope to let the money and resources be allocated to things that would help prevent the collapse of the country. Furthermore, the US was the only large country to escape significant infrastructure destruction, which would preoccupy most of the rest of the world for another decade or so.

* The development of a strong education and research system. This is in and of itself a more complex topic, but one thing I'd call out is that the American wealthy have had a stronger tradition of philanthropy than their European counterparts, and a lot of that philanthropy was geared towards making sure that the US was well-stocked with universities, libraries, museums, and the like.

* Clustering effects. Companies tend to want to be near other companies that do similar things--it's why there's a lot a tech companies in Silicon Valley, even if they could do their job equally well from Illinois. Early computer research ended up being in the US, so the computer technology clusters have ended up being very US-centric.

* Market size. The US has historically been the largest market for tech, and arguably still is for certain segments of the market. Europe has been (and generally remains) too fragmented to be a single market, China and India historically too poor, and the USSR hampered itself with internal controls. Furthermore, the size of the US market also means that it tends to be harder for foreign entrants to break into the market than it is for US entrants to break into foreign markets.

> Do you think another country will take its place?

Eventually, yes. On what time scale, I can't say.

> Will growing internet adoption lead to growing patterns of geographic decentralization in the industry?

No. The internet has not reversed the trend for businesses to cluster together, and I see no reason to expect that should change.

> Is it possible cryptocurrencies will cause a rise in an internet centered tech industry?

I don't see how they could...

The eco system thing is one, the second is: Geopolitics, which plays a big role in that, I mean with the huge US influence the Silicon Valley companies can be global trendsetters, think of the FCC standing in the global,telecom sector.US allies could not ban UBER although they hate it, but they have to play the American (open market) rules. There were many superior products by non-American companies, Creative Technology got the first portable audio player, years ahead of Apple, yet they underestimated the value of the American market and spearheaded MP3 with total disregard for copyright issues (Napster days), Russian companies produce good stuff-Kaspersky et al- but they do not have the full "Eco system".

US companies give much higher pay than Europe and China.

A beyond-average elementary programmer gets $40K/yr in China with 9-9-6 life. But the same person in the United States may get $120K or even more with a 9-6-5 life.

So many Chinese programmers are moving to the US for higher pay.

PG's essay from nearly 15 years ago is still very relevant and IMO sums up best why America is so dominant in tech (and ohh btw also in entertainment and a bunch of other areas) http://www.paulgraham.com/america.html

One word: baseball. Love of the sport is what makes Americans different from other nations. One man facing the opposing team. With one swing of the bat you can win it all, overcoming limits imposed by the playing field itself. Making technological innovations is very much like that.

I think another big part of it is down to the lack of regulation.

Other countries with similar socioeconomic conditions tend to regulate things quicker plus have social programmes (healthcare, workers rights etc)

The US does neither.

I think this makes it easier to start in the first place.

The other part, as others have pointed out, is the extreme development the US achieved on the back of WWII that provided capital which has snowballed since.

The reasons are manifold.

Some are nicely summarized (factors leading up to the current Political/Military/Economic domination) in a two-part Stratfor article;

1) The Geopolitics of the United States, Part 1: The Inevitable Empire - https://worldview.stratfor.com/article/geopolitics-united-st...

2) The Geopolitics of the United States, Part 2: American Identity and the Threats of tomorrow. - https://worldview.stratfor.com/article/geopolitics-united-st...

The way i look at it is (in no particular order);

Luck - WW2 decimated almost all developed countries. The US "home" was untouched (no war on their soil) thus leaving them as the sole industrial/military powerhouse with resources intact. This is actually a huge factor and the current state follows directly from here. They also appropriated a lot of Scientists/Technologies from the losers which gave them the needed headstart in many tech areas.

People psyche - The country was founded by immigrants who basically had to do whatever to "survive". Since they had no history in the new land, they were not bogged down by crystallized cultural norms and beliefs. Thus the focus on "Capitalism"(euphemism for Greed and "do whatever it takes to win") and "Hustle" (not always driven by Ethics/Morals contrary to what their leaders may claim). This setup their current culture where their desire is to be THE global hegemon by any means necessary. If you think about it, this is a great motivator for just about anything.

Geography - Covered well in the above articles. This allowed them to develop independently of detrimental external influences.

Control of World Economy - By forcing everybody to use $ as the world's currency. The ramifications of this is all-encompassing.

Military/Education/Industrial Complex - This is a crucial nexus which is directly responsible for much of their dominance in the technology domain. The Military funds "Blue Sky" projects in close association with Academia and the Industry. Because of this close-knit setup, the path from Ideation to Realized Implementation is very fast and seamless. No other country does this as well. Because of the "Power Law", progress in Technology is accelerated leading to being the natural front-runner.

Finally, it should be clear that "Military Dominance" is used to enforce "Economic Dominance" and vice-versa.

The most interesting question is why do Americans dominate software technology specifically? It is the most level playing field of all technologies. The skills to develop a state-of-the-art next-generation software technology are readily available and learnable globally while requiring negligible capital. On paper, you would expect this to be an area where Americans have the smallest advantage instead of one of the biggest.

Having worked with software engineering teams around the world over the years, and also done a lot of software tech M&A diligence, I've come to appreciate the massive impact that local culture has on being effective at advanced software development. This goes beyond the culture of the company itself; the level of ambition and optimistic self-belief required to be effective at developing very advanced software isn't terribly compatible with environments where Tall Poppy Syndrome/Law of Jante/etc is a real social dynamic, and that is very much the rule rather than the exception.