Why is Silicon Valley the Global Centre of Technology Innovation

Photo Credit: Karl Rohde

Photo Credit: Karl Rohde

The ripples of tech innovation that start in Silicon Valley touch every one of us. Apart from the big players like Google and Apple, Silicon Valley is home to other disruptors like Uber, PayPal, Netflix, Facebook, Twitter, Oracle, Tesla, Pixar to name but a fraction.

In case you didn’t know, Silicon Valley is the nickname of a geographic location, the southern portion of the San Francisco Bay Area, located in the U.S. state of California. It’s home to many of the world's largest and most innovative and important technology companies. It’s the proverbial Mecca for tech entrepreneurs, IT specialists and the melting pot for thousands of tech start-ups. It accounts for one-third of all venture capital investment in the United States.

So how did this location become the globally recognized centre for technology innovation? In short, the answer is this: PEOPLE.

According to Paul Graham, computer scientist extraordinaire and venture capitalist: "What it takes is the right people. If you could get the right ten thousand people to move from Silicon Valley to Buffalo (USA), Buffalo would become Silicon Valley"

It all started with a few key people who walked to the beat of their own drum. The story goes like this: Shockley Semiconductor set up shop in Silicon Valley working on the creation of semi-conductor devices (AKA circuit boards). It was run by a narcissistic corporate dictator, Mr. Shockley, who had a knack for hiring remarkable people. In 1957, after a spate of failed designs and an intolerable working atmosphere eight of his best department heads resigned. They collectively became known as the traitorous eight and formed a competing firm called Fairchild semiconductor. The rest is history. Fairchild was an innovation utopia that lead to the creation of companies like Intel and AMD - yes, you got it - the makers of the brain inside every computer in the world. Fairchild unleashed a creative tidal wave whose increasing inertia led to an unstoppable whirlpool pulling in the world's best talent.

The Cycle That Spawns Magic in Silicon Valley

  1. What nerds like are other nerds. (“Nerd” being a compliment). Smart people will go wherever smart people go.
  2. You also have the dreams of young people wanting to follow in the footsteps of the tech pioneers that walked before them. This leads to universities in the Silicon Valley area being a major magnet to young hopefuls all over the world (think Stanford, the place where Steve Jobs gave is eponymous commencement speech).
  3. University's lead to start-ups where graduates are desperate to put their freshly honed genius to the world. Silicon Valley offers the ultimate petri dish - people, universities, investors and companies - for the cycle of ideas to be discovered and given life in the real world.
  4. The place has a young feeling vibe where young creatives can mesh with other young creatives, but it also offers a home for venture capitalists that are eager to turn a profit by breathing life into ideas in the form of start-ups.
  5. And so startups beget startups. The people who work for start-ups start startups and the innovative cycle just keeps going.

Silicon Valley is a people ecosystem where the best people with the best ideas get a chance to be funded by the best investors. It's also where the best companies know they will find the best people to hire. It’s a feeding frenzy where people feed off each other and where companies get to feed off brilliant people and vice versa.

In principle, we can all learn from a place like this. In what ways do we as individuals initiate and pitch our ideas? In your business can you re-create a Silicon Valley-esque ecosystem where great ideas come to life?

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