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It's Settled: Silicon Valley Is Dying. So What's Next?

The Rust Belt will rise again.
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Aeriel photo of Pittsburgh. (Photo: phillq23/Wikimedia Commons)

Aeriel photo of Pittsburgh. (Photo: phillq23/Wikimedia Commons)

Silicon Valley is the next Detroit. California crumbles and Texas rises. Or so journalist Erica Grieder would have you believe. I assert the forgotten, shrinking Rust Belt stands as the heir apparent to the Innovation Economy. As the Manufacturing Economy (Detroit) fell, the Innovation Economy (Silicon Valley) took over. We can no longer deny that the Innovation Economy is in decline:

Silicon Valley’s tech-fueled prosperity — in combination with a failure by local governments, developers and employers to ensure that housing supply can meet demand — leaves the region vulnerable to talent poaching from less-expensive markets. It also manifests day-to-day in productivity-sapping traffic caused by commuters who clog the freeways driving from more affordable fringe cities.

Pick your poison. Bottom line, the wages are too damn high. The Innovation Economy requires cheaper labor. Exodus of the Creative Class:

Artists aren't just leaving New York for LA – they're also going to Portland, Minneapolis, Miami, Atlanta, Philadelphia and countless other places. And, as an aside, I don't know why they aren't moving to Newark. It's 15 minutes away from Manhattan and remarkably cheap. I think it's the unwarranted New Jersey stigma that unfortunately keeps people from crossing the Hudson. People would rather move to the worst part of Brooklyn and still have the magical "NY" in their address. That single consonant on their mail – "Y" as opposed to "J" – seems to keep people from making that 15-minute trek to Newark.

Emphasis added. So says Moby. Newark is an instructive geography. The ambitious head to New York or San Francisco out of tradition. For the same reason, they avoid Newark. It's off the map and might as well be Des Moines. Regardless, talent can be someplace cheaper and still in the loop.

Korean made car.
Container box ship navy,

Down goes Detroit. Down goes Silicon Valley. What's up? Pittsburgh.

Hidden in the slag heap is the Legacy Economy. What's wrong with the Rust Belt is what will be right. Sinking with anchor institutions:

Others think we may be “too captive to the past,” one Philadelphia participant noted, “by limiting our definition of anchor institutions,” especially to the “eds and meds.” In fact, while universities and hospitals represent the legacy of the industrial wealth once enjoyed in rust belt cities, how and where they deliver services has and continues to evolve. Tom Schorgl of Community Partnership for the Arts agreed, noting that anchors can also be “neighborhood-based institutions or groups that provide an anchor in those neighborhoods.”

The Manufacturing Economy failed and moved to Korea. The Manufacturing Economy succeeded and fed the Innovation Economy. The engineers had to come from somewhere. They came from the anchor institutions that manufacturing built. First, physical geography blessed certain places with coal and waterways. Silicon Valleys of the time boomed. The wealth freed the labor and they sprawled. Wherever innovation happened, college graduates would go.

Luckily, Pittsburgh is too captive to the past. Arts and anchors are the current attraction, all thanks to quirks of earth science. Prosperity is once again grounded in geography, the same one that peaked way back in 1910. Environmentally determined Google:

“Google has signed a lease for an additional 66,000 Square Feet at Bakery Square 2.0 to accommodate for natural growth in our Pittsburgh office. Google Pittsburgh’s engineers and product managers work on search, ads and ads-shopping products used by hundreds of millions of people, as well as core engineering infrastructure.”

Sure, Google pops up in a variety places these days. Whoop-dee-doo, Pittsburgh. Hold on. Google is an anchor: "Consider the history of the growth of Google in Pittsburgh, home of one of only three engineering centers in the country."

Google is the migrant, talent the attraction. Floating with anchor institutions:

According to [Ted] Howard, anchors are truly rooted and have a vested interest in their surrounding communities. “Anchor institutions may reasonably be expected to be around in 100 years. Anchors take the long view and get dividends later,” says Howard. Companies can exhibit anchor-like behavior, but he “would exclude companies that stay in the area only when it makes sense for the investors. If the companies can be more profitable somewhere else, they will move.”

The SS Google has permanently docked at the Port of Three Rivers. If Mohammed won't move to Mountain View, then Mountain View will move to Mohammed as he graduates from Carnegie Mellon University. Apologies, Austin, Texas.