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What makes a silicon valley?

July 30, 2009 Leave a comment

I have been pondering over the fact that India has a huge talent pool, in terms of number, brainz and quality, to match any country. It does not have the right ecosystem to engage this talent pool within the country, most of them decide to go abroad and sell their talent as service to big companies or start technology companies abroad, not here. They do come to India for getting a cheap but quality work done (building products in development offices in India and maintaining corporate offices abroad).
Hence they do use their talent, but not to create a hub of talent, innovation(real not the marketing gimmick) and intellectual property in India, why?
How can we create a self sustainable ecosystem here in India, so that this huge pool of talent creates value here?

Well, I have my own thoughts and after thoughts on this, which I shall compile and share on this blog some other time.

Today I am sharing a similar perspective (to mine) by Dr. Vinton Cerf,Vice president and chief Internet evangelist, Google.

The following is an excerpt from one of his speeches.

Tony Blair, prime minister UK, came to the silicon valley on invitation from Cisco, in the summer 2007. His ostensible reason for showing up was to try to figure out whether there was any way to re-create a silicon valley in England. He was talking this and about education, etc. Speech finished and the attendees were all silent for a while, then Steve Jobs spoke up – “one thing that we all have experienced is that we all have failed one time or another”.

Now that was an insightful comment. For it brings out the fact that “failure” does not bring a red cane mark on one’s forehead marking him as “a failure for live” and that “failure is acceptable” in the US. It is treated more like and experience rather than a sin or a sign of in capability. Unlike in the Europe or India/Asia (I am adding India/Asia from my side coz the argument is valid) where failure is treated like a sin and one is marked as a incapable man if he fails. He is asked to take safe options and avert taking risk. Of course if you fail regularly then its a different story altogether.

We are also fortunate here in the Silicon valley to have such a strong source of educated workers. There is a continuous influx of educated and skilled people, from the colleges around, to fit in jobs in the Valley’s enterprises. We also have liquid market (we had, but its picking up again).

For being successful a market has to allow public investments, not requiring VC’s for the funding all the way. Though VC’s are the one’s who put in a lot at the onset, taking calculated risks for rewarding returns. Venture capitalists were not common in Europe, rather risk averting banks feared to lend money for new ventures. This hinders creation of new businesses.

We also have a talent pool that is very fluid in the sense that they can shift from one business to another and it does so. In Europe it is less so. Everybody knows everybody else here, either you worked together, worked for the other or he worked for you. So people are aware of each other’s strengths and weaknesses.

One last point is what is refered to as “cargo cults”.

Excerpt from Wikipedia:

The most widely known period of cargo cult activity, however, was in the years during and after World War II. First, the Japanese arrived with a great deal of unknown equipment, and later, Allied forces also used the islands in the same way. The vast amounts of war materiel that were air dropped onto these islands during the Pacific campaign between the Allies and the Empire of Japan necessarily meant drastic changes to the lifestyle of the islanders, many of whom had never seen Westerners or Easterners before. Manufactured clothing, medicine, canned food, tents, weapons, and other useful goods arrived in vast quantities to equip soldiers. Some of it was shared with the islanders who were their guides and hosts. With the end of the war, the airbases were abandoned, and cargo was no longer dropped.

In attempts to get cargo to fall by parachute or land in planes or ships again, islanders imitated the same practices they had seen the soldiers, sailors, and airmen use. They carved headphones from wood and wore them while sitting in fabricated control towers. They waved the landing signals while standing on the runways. They lit signal fires and torches to light up runways and lighthouses. The cult members thought that the foreigners had some special connection to the deities and ancestors of the natives, who were the only beings powerful enough to produce such riches.

In a form of sympathetic magic, many built life-size replicas of airplanes out of straw and created new military-style landing strips, hoping to attract more airplanes. Ultimately, although these practices did not bring about the return of the airplanes that brought such marvelous cargo during the war, they did have the effect of eradicating most of the religious practices that had existed prior to the war.[citation needed]


The Countries that don’t understand the dynamics and the environment that has to be in place to create a silicon valley and to sustain it. They put industrial parks, they put buildings together, they provide power and all the other stuff and then they ask the companies to come in and populate these shells. The problem is that these are just like those cargo shells, it is an empty shell and until you have all the other desiderata to keep this economic engine going, it just doesn’t work without them. So you can’t just build a shell, an industrial base, you have to have all the other pieces working together like an engine and its parts. But it turns out to be much harder a fact for some policy makers to understand.

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I think Dr. Vinton (or “Vint” as he likes to be called) has made a solid point. I saw his speech (video) at Stanford Ecorner and found it resonating. There might be (and are) many other aspects that determine the growth of such an ecosystem but this post is not meant to touch on those, this was just to bring out a thought that it did.

More on this and my own thoughts and after thoughts on this topic shall appear within the next few postings.

Till then, think different.

JV

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