Over nine years ago I wrote the following in a short piece for an Asian colleague who was interested in the 'Silicon Valley culture':
" The Valley is really an aggressive, colonizing culture that grows by importing immigrants, and has overspread and occupied part of California. By immigrant I mean anyone who moved from outside into the Valley, whether from another region of the US or from outside it."
It was therefore interesting to come across
this recent post from a population geographer, who had arrived at a similar evaluation from his own direction. For instance:
"...in these global cities [including the SF Bay], two economic geographies share the same physical geography – and those economic geographies are in conflict. One set requires catering to high skill, highly paid workers and firms where cost is a secondary concern. The other involves occupations and industries where cost is very much a concern. The occupants of these two geographies have very different public policy priorities.... In a global city, particularly a mature and expensive one, the elite geography wins. "
"And where do these elite come from?
"This explains why, for example, not only have taxes gone up, but things like schools and other basic services have declined so badly in places like California. Traditional primary and secondary education is not important to industries where California is betting its future. Silicon Valley, Hollywood, and biotech draw their workers from the best and brightest of the world. They source globally, not locally. Their labor force is largely educated elsewhere. Basic education and investments in poorer neighborhoods has no ROI for those industries."
This is one half of the poorly hidden secret. While industry leaders will express pious support for local education and improvement, their actual exposure is limited: Immigrating employees with children will ask for salaries that can cover the costs of private schooling or locating in one of the high priced areas with decent schools. But since being an engineer, scientist, or manager of same doesn't necessarily breed true in the next generation, it's always assumed that most of the next wave of talent must be imported from elsewhere. Even if they are nominally Stanford or Berkeley grads, their birth certificates usually don't read 'California'. As far as the other population:
"If you are just an average middle class guy, why live in one of those global cities anyway? ... And frankly, the folks on the global city side prefer it if you leave anyway. Immigrants are unlikely to start trouble, but a middle class facing an economic squeeze and threat to its way of life might raise a ruckus. That won't happen if enough of them move to Dallas and rob the rest of critical mass and resulting political clout."
If this is sounding familiar, I suggest you
read the whole article, which draws some worrisome conclusions for long term social and political impacts on the region and the US generally.
The other half of the secret? The post gives a hint:
"...an attractive environment draws diverse uses, then one becomes economically dominant and, through superior purchasing power, displaces other uses over time. The story ends when that dominant economic activity exhausts itself..."
Due to rising costs and regulations, and the effect of the Internet in reducing geographic
specificity, Silicon Valley has been progressively moving its lower valued functions offshore: chip fabs, customer support, QA, documentation and lower-level code and data creation and maintenance. With them has gone a good chunk of the immigrant inflow, both American and international, which has shifted to ever more highly educated and experienced people. And it now appears that
this generation of more senior offshore immigrants is more ready to return home, rather than making the Valley their permanent station in the global network.
This, along with a recession unprecedented in Valley history, and a government with little understanding of business, may be why Michael Malone has said that the area is now a 'sandwich missing its meat':
"...the big pull [of innovation] has always come from the thousands of fast-moving, risk-taking new start-up companies who find unexpected (and sometimes vast) new applications for those technologies.... Those companies aren’t there anymore. The crucial center of the tech world – new and fast-moving companies – the meat in the technology sandwich – is gone. Under the press of an economic slowdown, government regulations that have handcuffed entrepreneurs and venture capitalists – and perhaps most of all, an Administration that increasingly seems actively hostile to entrepreneurship and small business – high tech is hollowing out. "
It took decades to build up the human, financial and technological capital that has made the Valley what it is - for better and worse. It will likely take as long to dissipate that capital, so there is time for a correction. But the trends are in the wrong direction.
