Innovation isn’t dead, it just moved to the cloud vs. The Golden Age of Silicon Valley is Over — FIGHT!

Point: ‘The Golden Age of Silicon Valley Is Over, and We’re Dancing on its Grave’

Counterpoint: Innovation isn’t dead, it just moved to the cloud — Cloud Computing News.

Two set of opposing views on the state of innovation. One decries VC in Silicon Valley chasing short money on the next big social media product instead of sinking money into cancer research or computer chips. The other posits that we need to redefine innovation.

Both of these articles are interesting and have many valid points, but they largely get lost as they both mix (somewhat indiscriminately) several very different (albeit intersecting) sets of issues. One is the state of Silicon Valley itself as an start-up environment. Another issue are current trends in VC investing. Yet another issue is the role (both philosophical and economic) of VCs in driving and shaping  innovation. And finally is the current state of innovation in the IT field.

Perhaps it is impossible to address any of the these in a vacuum. Clearly there are nearly unbreakable lines of intersections between these.

It would probably take a doctoral dissertation length paper to meaningfully address the confluence of these factors. My take-away from these articles, is several-fold:

1) There are significant problems with permitting our economy to be driven to greatly by investment premised largely on short term maximization of return. In order to incentiveize investors there must be tangible and realizable gain. But if that gain is more about “How quick can we cash out?” then we stand a great risk of failing to fund fundamental, longer-term science and technology innovation which can take far longer to develop and mature than consumer services type products.

2) There appears to be significant danger created by the over concentration of investment in silicon valley versus other emerging technology hubs. There is much to be said about the efficiencies of concentrating investment in environments with high numbers of qualified workers (and dreamers), where there are many synergistic companies that can cross pollinate. Conversely, over concentration lends itself towards the development of a monolithic, self-referential mind-set. If everyone is running int he same circles, looking at the same competitors, drawing from the same talent pools, and clustering around the same educational institutions, true “innovation” becomes harder and harder and what you are more likely to end up with is either “differentiation” or “evolution”.

Even these two points alone could take up a lot of words (and doubtless, a number of them will be mine over coming blog entries).

I think that the central premise that I come to in these articles is that, while Silicon Valley neither is going away nor should it, our nation (and the world) desperately needs to lavish greater attention and money on other hubs of innovation: Atlanta, Boston, The North Carolina Research Triangle, Waterloo (Canada), just to name a few. These are all areas where there are tremendous concentrations of talent and the necessary infrastructure to create centers of innovation that could serve to both counterbalance the march to the monlothic occurring in Silicon Valley and which could provide the competitive catalyst needed to drive a more robust innovation economy.

One comment on “Innovation isn’t dead, it just moved to the cloud vs. The Golden Age of Silicon Valley is Over — FIGHT!

  1. […] All three of these stated goals are exactly the sort of incentivization that the federal government should be pursuing to help cement the U.S. as the premier hub of IT innovation. In particualr, the investment tax credits, which require a hold time of at least 5 years is particularly important to encourage investment in technologies that have longer maturity cycles. (See all so my earlier post on the current VC landscape:…) […]

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s