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Silicon Valley's New Jersey Problem

Like New Jersey in the 1960s, Silicon Valley is now just as dependent, if not more so, on talent produced outside of the region.
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Silicon Valley from above. (PHOTO: REVOLWEB/FLICKR)

Silicon Valley from above. (PHOTO: REVOLWEB/FLICKR)

Allegedly, Silicon Valley is starved for talent. If the region doesn't get more immigrants, the innovation engine will seize up. Vivek Wadhwa opines about the magic in jeopardy:

Soon enough, other regions were trying to copy the magic. The first serious attempt to re-create Silicon Valley was conceived by a consortium of high-tech companies in New Jersey in the mid-1960s. They recruited Frederick Terman, who was retiring from Stanford after having served as provost, professor, and engineering dean.

Terman, sometimes called the “father of Silicon Valley,” had turned Stanford’s fledgling engineering school into an innovation engine. By encouraging science and engineering departments to work together, linking them to local firms, and focusing research on the needs of industry, he created a culture of coöperation and information exchange that has since defined the region.

That was the mixture that New Jersey wanted to replicate. It was already a leading high-tech center—home to the laboratories of 725 companies, including RCA, Merck, and the inventor of the transistor, Bell Labs. Its science and engineering workforce numbered 50,000. But because there was no prestigious engineering university in the area, its companies had to recruit from outside, and they feared losing their talent and their best technologies to other regions. (Even though Princeton University was nearby, its faculty generally shunned applied research and anything that smelled of industry.)

Emphasis added. Wadhwa describes what makes Silicon Valley unique. It "can't be copied." I agree with the cultural explanation. Silicon Valley companies didn't worry about brain drain. New Jersey companies did. I disagree with just about everything else Wadhwa says in his article.

Silicon Valley is now just as dependent, if not more so, on talent produced outside the region. It's a global magnet for the best and brightest. Concerning immigrants, it has a built in advantage. Everyone knows about Silicon Valley. Few have heard about the nanotech cluster in Albany, New York. Immigration reform won't help the little guys or growing hotbeds of innovation.

Silicon Valley today is the New Jersey of the 1960s. Stanford can't come close to meeting the needs of local firms. But the issue isn't immigration. It's domestic competition. Silicon Valley fears losing its talent and its best technologies to other regions. The culture is parochial, disconnected from reality:

Gabriela Dow founded a government technology startup and now consults with tech startups locally. She worked downtown for several years, and now lives in Rancho Bernardo. She knows two tech engineers on her cul-de-sac.

She said the claim San Diego won’t be able to attract the talent it needs to grow its tech workforce without a hipper downtown is overblown. The county’s miles of open space, trails and canyons, while contributing to sprawl, make the county an attractive place for triathletes and long-distance cyclists, for example. And the endurance such sports foster is attractive to hard-working tech companies, she said.

“You just go where you have to go to start your company, and San Diego’s not a hard place to recruit people to,” she said.

Dow said she hopes San Diego doesn’t lose its sense of distinct, diverse neighborhoods. She said she thinks San Francisco has lost some of its color: “Now it’s all become millennial, Google-Yahoo-Facebook.”

Every place is rushing to become millennial, Google-Yahoo-Facebook. San Diego appeals to a broader talent base. You can live-work-play in the urban core. You can run-bike-hike in the exurbs. San Diego’s not a hard place to recruit people to.

San Diego, not the federal government (as Wadhwa argues), is the serious challenge to Silicon Valley. Small start-up companies don't have a team of immigration lawyers  to manage the H-1B visa applications. The talent lottery is rigged in Silicon Valley's favor. Domestically produced employees are another story. You might know the allure of San Diego from that vacation to Sea World or watching on television a professional golf tournament at Torrey Pines in La Jolla.

Comparing another region or another country to Silicon Valley is no contest. But add them up and you have a formidable opponent for scarce talent. Silicon Valley is magic when everywhere else is New Jersey. Not so with the rise of the rest, the San Diegos of the world.