Why Silicon Valley is the still the most desirable place for high-tech companies? There are many other reasons that beyond the clichéd “innovation”.
Like in real estate business everything is “location location location”, in high-tech, many things are about “people people people”. Technologies are not just machine, patent, and product, but largely are related to people. For companies, how easy to find qualified people is one of the top priorities to consider location. If company needs to relocate people from somewhere else, it is not just expensive but also sub-optimal. From workers’ perspective, moving to place with plenty of job opportunities is equivalent to shopping at Union Square where you can visit many brand stores in walking distance. It is arguable why Microsoft wants to set up its head quarter at Seattle but not at Silicon Valley. Interestingly Microsoft is able to move engineers from different places to Seattle but it never has a sizeable presence at the Silicon Valley. The reason for that I believe is because MS is really big enough, which could mean state /city and people need it as oppose to that it needs location and people. Plus the skill set to work for Microsoft has become so unique that engineers would not want to move around. But for many small to medium companies, setting up at the right place determines the effectiveness of recruiting.
Another reason of the success of Silicon Valley is culture. With more than 40 years history of the valley, a very unique “high-tech” culture has been formed: flat, transparent, efficient and “help you succeed”. In computer network, a flat layer 2 network is always faster than a hierarchical layer 3 routing network. Likewise, in Silicon Valley, hierarchy has always been labeled as dumb, slow, and not cool. Title is not very important here, instead being smart and able to make new product and coming up new ideas are always cool and admired. Transparency in almost every aspect of life and work ensures people to focus on productivity and cut off any unnecessary overhead. In such environment, it is easier to innovate and work efficiently. On top of that, people are more willingly to help each other to succeed because the main focus is on making new product other than maintaining a business. In any expanding environment, people are not worried much about competition but spend more energy at looking for new opportunities.
A good ecosystem: a good business needs a good eco-system. Eco-system is not easy to define but in my view it is about how easy to do business within it. It is quite virtual but a little like software running at hardware. It is also like an organic process which each part moves by itself. In the valley, complementary components work together efficiently, such as HR, logistics, manufacturing, support, marketing etc. All these functional resources form a good eco-system for making new product, which it is not easy to find somewhere else. In the last two decades, Internet has been the driving force of innovation, from internet browsers, routers/switches, servers and database to support internet applications (1990 to early 2000 ) to social networking , mobile application and cloud computing (mid 2000 to now). Most of the innovations are originated from the Valley and then outsourced to other places. It is almost impossible to duplicate such success in other places, such as India, China, Germany, UK etc. It is really about a system of innovation.
Bottom line is, the valley is still the place company and people want to come and stay no matter how bad the economy is. It has something you will appreciate after knowing it for a while. Lastly, probably it is about the nature of the world where every place is good for something, but not everything.
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