Come on: there’s a beautiful A/B test you can consult: in the 50s, 60s, and 70s, Boston’s route 128 was the “Silicon Valley” of its time. The US poured even more money into it than they did the Bay Area. Yet which grew and which stagnated?
I think THE major difference was enforcement of noncompetes (as well as those as a proxy for a slew of similar regulatory differences).
Financial resources went to route 128 because of a more corporate-friendly regulatory climate. Innovation came from Silicon Valley because of a more innovation-friendly regulatory climate.
Guess which won out?
US reached economic supremacy in part due to a weaker IP scheme than Europe, and China is doing likewise right now. Innovation requires a mixture of economic rewards (which doesn't happen in the absence of any enforcement), and building off of the work of others (which doesn't happen with strict IP laws). Massachusetts went off of the deep end of more is better.
Coincidentally, Boston is doing better for big business, like biotech, in part because there, the balance falls in a different place. It's very tough to start a scrappy biotech, so the number of employee leaving to do a competing startup is pretty darned low in either case. The downsides of strong IP are smaller, and the upsides of weak IP are greater.
For a long time, Route 128 did largely win out, semiconductors in SV notwithstanding. The lead in computer-related technology did tend to shift to California with the shift to microcomputers. Although it's not clear that was in any way inevitable. (After all, Compaq was in Texas.)
.... Which was the exact moment computing stopped looking like biotech. Before microcomputers, starting a computer company required an investment of perhaps a million dollars in today's currency, depending on the type of company.
After microcomputers, anyone could do it out of their home.
If my employer is making a CAD tool and makes a dumb decision, I can make my better CAD tool and put them out of business. Even hardware changed when I no longer needed to buy individual transistors. Things like the Apple could be designed out of a garage, with commercial off-the-shelf parts, perhaps borrowing a little bit of money from friends and family, but without even taking out a second mortgage. From there, things spiraled up, with quick-turn $40 PCBs, fabless IC companies, and so on.
It didn't have to happen in Silicon Valley, but it couldn't happen in Boston, and with Stanford and what not, Silicon Valley was as good a place as any.
>Boston is doing better for big business, like biotech
There is also a LOT of biotech in sfbay, but it is still in the shadow of internet tech, for various reasons (PhD is minimum cost of entry, longer development times, etc)
Having worked in both fields (computing and pharmaceuticals) and in both areas (Boston/Cambridge and Silicon Valley -- though never in SF) I can tell you the Bay Area is a shadow of the Boston area in this regard. And the VC dollars send the same message. It honestly surprises me that the JP Morgan healthcare conference is still out here -- I imagine it's due to weather: it's a January conference, and a good excuse to get out of NY/BOS at a nasty time of year.
My point in my GGP post was that the opposite is true, first for tech and more recently for internet commerce, in the Bay Area. And I agree that the #1 driver was a healthy attitude to IP laws (which also drove the film industry to California, first to the Bay Area and then to LA).
And the second was an attitude that people don't care so much about your background and what's been done to date, an attitude I believe to be a legacy of the gold rush.
But was that part of brilliant overarching strategy from visionary government leaders to develop and foster the world's tech hub, or an accident of history?
I think the point is that success comes from the accumulation of many factors; the best you can pull from them is a thread of attitude. "Success" is thus really an emergent phenomenon coming from a bunch of independent decisions, sometimes with feedback between them.
This is why efforts to "duplicate Silicon Valley" fail. Also why Europe was unable to move the locus of financial transactions from London even after the Euro. In both cases, there are plenty of things to point to but nobody really knows.
This is not an antagonistic comment but do you have any sources to share about this? I've lived in both cities and feel like I should know more about this.
I remember reading an article a log time ago, probably in the late '80s or early '90s, in a non-online newspaper or magazine that looked at a dozen or two other places that seemed like they were good candidates for SV-like development but had failed to become such.
My recollection is that the article found that there were several factors that all came out right for SV. The other places fell short on one or more of them.
I don't remember all of the factors they found, but I remember a few.
One was nearby top tier research universities.
Another was ready access to investors willing to invest in new kinds of businesses. This one was a problem in several older places. The investors there just wanted to invest in companies doing old things or in doing things related to the main existing industry of the region.
Tolerance of failure was important. In some places, failure forever taints you. Start a company and it fails? The investment bankers no longer want to talk to you, and you don't get invited anymore to the parties and events where the behind the scenes networking goes on. In SV having a failed startup isn't a big deal.
An A/B test requires all other factors to be the same. Can you imagine a bunch of Harvard kids quit school, rent a house in Cambridge and code/party all year round?
