Exploring the Myth and Reality of Silicon Valley

Silicon Valley Landscape
 
 

It’s where Hewlett met Packard, where the microprocessor was born. It’s home to Google and Facebook, Apple and VISA, and, of course, thousands of striving startups.

Rich and glamorous (in its own, techy kind of way), it’s inspired scores of imitators in this country and abroad—places like Silicon Hills (Austin), Silicon Forest (Portland, Ore.), and Silicon Cape (South Africa)—all trying to capture some of the original’s magic.

But could you afford to actually live in Silicon Valley? And would you even want to?

“What Silicon Valley has created—while it’s great—is totally unsustainable,” said Mikah Sellers, Chief Digital Officer for Grafik, who co-taught the course “Global Innovation: The Silicon Valley Effect” with Maria Trujillo, Ph.D., Faculty Director of Georgetown University’s graduate programs in Technology Management and Systems Engineering Management.

It’s the kind of place where 30-something tech executives have to live in group houses because that’s all they can afford. “If you make less than $125,000 you’re considered lower income…,” Sellers said. “That’s absurd.”

Technology Management student at the Intel History Museum
Technology Management student
at the Intel History Museum

But it’s an absurdity born of spectacular success. In her classes, Trujillo talked a lot about the “ecosystem” of Silicon Valley, a rare combination of ambition, intelligence, and openness to sharing and collaboration, all nurtured by a world-class university (Stanford) and an abundance of venture capital. It’s a place where to be a little odd—a “weed” in the biosphere—is perfectly okay, and failure can be a mere prelude to success.

“I think it’s important to go there and study the culture, study the ecosystem, and see how that ecosystem can be replicated outside the area,” Sellers said.

And so, from June 4-8, the entire class visited this iconic region and examined the very real attributes that combined to create the myth.

Is ‘the Party’ Over?

For the first time since the start of the tech boom, more people left Silicon Valley in 2016 than moved in. A net loss of 42 people a month may not sound like a lot in a region of more than 3.1 million people, but it’s a big shift from 2015, when the monthly average showed 1,962 more people arriving.

“In some ways, given housing prices, it’s surprising how long the party has continued,” Brian Brennan, of the leadership group, told the Wall Street Journal.

But don’t expect the party to wrap up anytime soon. While the San Francisco Bay Area on the valley’s north edge has the highest technology labor costs in the country, it also leads in labor quality, one study found. And, despite a slight deceleration recently, “Silicon Valley’s innovation industries continue to create jobs at a faster rate than any U.S. innovation region,” according to the Silicon Valley Competiveness and Innovation Project.

Still, when considering the combined growth of other tech hubs across the country—and the reduced cost of doing business practically anywhere other than the South Bay area—your startup is more likely to succeed if it’s not in Silicon Valley, Sellers said. Among the many places vying for a piece of the digital pie are Boston, Nashville, Detroit, and, of course, metro Washington, D.C., which showed its tech bona vides earlier this year when Amazon named Northern Virginia; Montgomery County, Md.; and the city itself among 20 finalists for its coveted second headquarters.

Can it Work Elsewhere?

So can Silicon Valley be replicated somewhere else? Technology Management student Phil Crawford thinks that the answer is “no” but that it doesn’t really matter.

“I don’t think any one city can replicate everything about Silicon Valley,” said Crawford, a Senior Consultant for eGlobal Tech. “It has to be very specific to the area.”

For example, with less of an earthquake threat than California, the D.C. region has become magnet for the “cloud,” Crawford said. It has world-class universities, a highly educated population, and proximity to the federal government and its contractors, making it a good fit for companies specializing in cybersecurity.

Of course, digital technology is affecting all organizations and businesses—not just those traditionally considered “tech” or highly tech-reliant—and it’s doing so at a rapidly accelerating pace.

“It’s all changing, and it’s opening a new way of looking at things,” said Technology Management student Loretta Dennison, a lawyer who is learning the field so she can help her clients both now and in the future.

“How can I counsel someone,” she asked, “if I don’t understand the industry?”

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