Silicon Valley, a Global Model?

fruits2-300x95

Solution, Culture, System? 

Across the planet, startup entrepreneurs being frustrated by poor similar starter conditions in their homelands and government restrictions, discouraged by comparable abysmal investment conditions, they are looking to Silicon Valley. Some of them are moving to the Bay Area, drawn by this model for innovation, for success in starting businesses, and for great global business success in growth industries. But is leaving its countries the best option to get the benefits of the Silicon Valley entrepreneurial culture? Or is Silicon Valley, as entrepreneurial paradise just a “state of mind” which can rise anywhere? Can it become a system, like once the self-government of a small ancient Greek town called Athens became democracy 1.0, which evolved over history, spreading today across the world in various forms adapted to local conditions?

 

Undisputed model of innovation

The_Traitorous_Eight-300x238-300x238

At least the question arises to what extent the Silicon Valley has become generally a model for innovation, new attempts of enterprise building and financing. How generally does this model apply, though? If you want to understand the Silicon Valley success story, it helps to at least glance at its history. It began with Stanford University, which, during the 1940s and 1950s, made serious attempts to encourage graduates to start their own companies. In 1957 the “Traitorous Eight” left Shockley Semiconductor to found Fairchild Semiconductor. These “traitors” eventually managed to earn enough respect to be called “Fair Children”. Among them were Robert Noice and Gordon Moore, co-founders of Intel, and Eugene Kleiner, founder of the venture capital firm Kleiner Perkins Caufield & Byers (KPCB). Subsequently, several waves of startups were funded by a unique culture of business angels and venture capital. Apple, Adobe, and Sun, then Yahoo and Google, and still later Facebook, Twitter, LinkedIn et. al., are among the best-known examples of world wide successful and influential companies. Later the innovation of crowd funding, recently strengthened by the J.O.B.S act, which, although controversial, enables ordinary people, “the crowd,” to invest in new companies. All that started in the Bay Area, unleashing entrepreneurial spirit and today changing the world.

It’s the culture, stupid!

Even German politicians, still caught in an industrial mindset of the 19th, 20th century, do pilgrimages to “The Valley”. Politely they adopt terms like “startup”, “venture capital”, and “business angel”. New York City, which is competing with the Bay Area as “Silicon Alley,” is mimicked by Berlin with its try to brand itself as “Silicon Allee”. No doubt Berlin is prepared to unleash suppressed entrepreneurial spirit in entrepreneurship-averse Germany. But lonely good will, some cool sounding buzzwords will make no real difference. The mindset, the entrepreneurial spirit, have to evolve first. Silicon Valley is based on a kind of collaborative culture, grounding in its original agricultural economy where neighborly help was pivotal to survive. Although Berlin is the first destination for start ups in Germany, until today it is not based on a culture of collaboration but of class antagonisms, grounding in the early industrialization. Collaboration has to be learned, adopted, which is not done in the twinkling of an eye.

What makes Silicon Valley culture outstanding?

Silicon Valley can serve as a model to other regions, especially Europe, because of certain elements of its success:

All together, these elements form what could justly called more than an ecosystem, a culture.

startup-ecosystem-ranking-2012-1024x441-300x129

Copyright: Startup Genome 2012

Reasons for the Silicon Valley model to go global

America is America, with its own national and regional conditions, and societal habits developed over hundreds of years since its founding as the first democracy with a written constitution. Not everybody will adapt to its diverse culture and love the American way of life, nor will everybody be willing to leave  his or her home country, familiar surroundings, and friends in exchange for a greater chance at successfully building a company. “Instead of their going to SV, the valley (’s elements of success) will have to go to them, if these entrepreneurs are to realize their potential.

Five reasons for a “Global Valley”

  1. Fostering global entrepreneurship The world needs new ideas, initiatives every day. The Silicon Valley model is unleashing entrepreneurial spirit, fostering ideas which can make the world a better place to live.
  2. Creating new opportunities for everyone The preconditions for a successful entrepreneur are neither a large inheritance nor political pull but ideas, concepts, teams, collaboration, and the ability to build a package that attracts investors. Everyone can achieve such success, no matter whether the business is small, medium, or big.
  3. Creating new jobs As Mary Meeker emphasizes, net job growth in America was realized predominant by startups . 60% of the top 25 tech companies founded first- and second-generation Americans provided 1.2 million jobs in 2012.
  4. Social stability Economies with a diverse entrepreneurial orientated collaborative culture become more stable and less vulnerable to financial crises.  Entrepreneurs are generally not as exposed to the risk of unemployment as workers are. The burden on social programs will lighten.
  5. Raising Globalization to a new level Global entrepreneurship will improve global relations between the people on a basis of interest and recognition of reality rather than fantasies and good will. Ideological and religious differences will be overcome much more easily. Understanding other cultures will no longer depend on good will but become a necessity if one is to understand markets and customers, and learn from different approaches to entrepreneurship. Competition and collaboration displace isolation and confrontation.

Making the world a better place to live

When more people gain more independence from government subsidies and from jobs provided by other, they will produce more wealth, thus make the world more peaceful and ultimately, a better place to live. If the whole world cannot come to Silicon Valley, Silicon Valley’s role model should come to the world as a “Global Valley”. A Global Valley’s needs are already developed and available: predominant in the Silicon Valley ecosystem like

  • Enhanced Information technology.
  • Enhanced understanding of successfully founding and funding innovations or a company.
  • Fewer restrictions by government.
  • A great sometimes even contradictory culture of networking and collaborating.

All these all could be promoted metaphorically as a “Global Valley” ecosystem.

The Downside of the Sucess: Social problems to be solved

But there are downsides to be noticed. Arrogance has become a trait of some of the Silicon Valley elite who seem to have lost the social ground under their successful feet. Verbal attacks against social weak citizens in San Francisco who do not keep pace with the stunning urban metamorphosis, lead to a dangerous alienation, questioning the social equilibrium and homeostasis. Soaring house prices and rents, caused by armies of well payed coders, engineers and technicians, threaten to oust financially weak citizens from their neighborhoods. It is to be seen if the collaborative culture of “The Valley” will address and solve these dislocations itself or if government action is needed.

On the one hand, this is a common consequence for economically thriving agglomerations anywhere everywhere. On the other hand, the great spirit of collaboration which distinguishes the San Francisco tech scene from class-warfare like quarrels (f. ex. like in Berlin-Kreuzberg) should be able to serve as a model as well. A model to solve these problems responsibly without any need for further Government intervention. One example of this was the attempt by a big part of the tech scene to save Jim Gray, a leading Microsoft researcher and software designer, who was lost 2007 on a boat trip to scatter his mother’s ashes. At that time the collaboration culture did overcome competition and rivalry. Jim Gray was seen by the tech scene as one of their own. Likewise an advanced responsible collaboration culture should do with those who are not as gifted and blessed. This must not necessarily mean new social benefits, this can be a help to self-help as the example of the “homeless coder” in rivaling New York City shows.

Is Silicon Valley “the” entrepreneurial solution?

Sometimes, listening to entrepreneurs about the ordeal they face in their local environments, I get the impression, that Silicon Valley is reflected as the entrepreneurial paradise on earth. Looking into history, a brand, an idea, a concept becoming over-hyped and overrated, it is nearing a peak, a bubble is about to burst, which can indicate the end of a success story.
Indeed not only social imbalances have to be addressed. When tech evangelists like David Kirkpatrick ask if Silicon Valley is losing its Mojo?; or Business Week publishes an article Is Silicon Valley losing its Magic? concerns are looming at the horizon about the future of this most advanced technology region. But until now, all predictions remain generally positive.

A Global Valley based on Local and Regional Valleys

Local and regional attempts and enterprises are the inevitable foundations of a Global Valley culture. It lives bottom up from the variety of local conditions. So every region can learn from every other region. Regional attempts are now successfully on the way like “Enterprise Irland” which fosters young Irish start ups and tries to give them an access to Silicon Valley culture. Or the new London Hype Technology on the Thames. On an entrepreneurial level likewise the Founder Institute et. al. It even can change the economy of a whole nation, as the example of Israel shows.
“Global Valley” as a term demands an understanding of the Silicon Valley way as a global community of new, up-to-date, enhanced entrepreneurship. It’s a synonym which gives credits to its origin.
Therefore the time has come not only to do a pilgrimage to the Bay area but to spread its culture over the world.

Hurdles for going global

Hurdles and reasons for possible failures are

  1. Copycatting: “Silicon Allee” (Berlin) will not succeed just by mimicking Silicon Valley (San Francisco) or Silicon Alley (New York). Unleashing entrepreneurial power requires more than cool buzzwords.
  2. Ignoring cultural differences: Societies based on social security are less flexible and ready to take risks, as some American investors learned in Eastern Europe.
  3. Statist hurdles too big to overcome: The Middle Ages are not as distant in time as we 21st century netizens might assume. The entrepreneurial spirit may be free, but national laws and regulations feed armies of bureaucrats and politicians, unwilling to abandon their power and well-paid positions.
  4. Lack of willingness to look beyond the regional valley: Being proud of one’s regional advantages and successes is one thing, making them global another thing. Only learning, learning, learning from each other, competing and collaborating will make a real difference.

A “Global Valley” – sounds good, but what is it for?

Are there practical reasons, is there a use for a global valley? Beyond networking, common collaboration? Look at these:

  • Globalization of twenty-first century like entrepreneurship seems to be actually more like a movement, not a systemic economic system. To attain new levels, to make a difference, reliable structures will be demanded for the whole economy and for the society.
  • Counterbalancing increasing well organized political and government interests on a global level.
  • Coordination in regulatory issues on a global level.
  • Spreading this unique kind of a collaborative economy over the world.

Silicon Valley will profit from a Global Valley

Even for the “Mother of all Valleys” a Global Valley would be beneficial by creating new opportunities for investors and faster access to global markets for new Silicon Valley-based startups. Investors can use their unique long experience acquired over decades to improve the starter conditions for new entrepreneurs and enhance their influence and business opportunities.
Nevertheless, there are some unique qualities of the American west coast that even a superbly performing new global entrepreneurship culture has so far been unable to imitate everywhere: sun and ocean.
But this desperate need (at least for people like me sitting under a grey-in-grey German sky) could evoque a disruptive, amazing, the world changing, all-difference-making startup:
“Ocean & Sun for everyone” ….

sandcastle2-300x224-300x224