Originally created 03/08/98

Silicon Valley's imitators try to copy its economic success

No one would ever accuse Silicon Valley's denizens of false humility, but the tone of a recent booklet by its local historical association stretched the limits of self-esteem.

The cover was adorned by Michelangelo's fresco of God passing the divine spark of life to Adam, and the text was no more modest.

"The technology of Silicon Valley has impacted the world more than any other occurrence since the Renaissance," it began.

That may seem conceited, but modesty is a lot to expect from a region that has spawned more imitators than the Renaissance master himself.

There is Silicon Glen in Scotland, Silicon Fen in England and Silicon Wadi in Israel. In the United States, there is Silicon Alley in New York, Silicon Dominion in Virginia and Silicon Forest in Portland, Ore., to name just a few.

Southern California showed greater originality, but still belied its Silicon envy, when it recently proclaimed itself the "Digital Coast."

Many of these upstarts are having a fair share of success. Israel has become a software development hotbed, and Austin, Texas, is overrun with high-tech millionaires. But as Los Angeles moves to join these ranks, it is worth noting that while many places can boast discrete elements of Silicon Valley's success like pieces of a jigsaw puzzle, none has ever completed the picture.

"Simply having the ingredients of Silicon Valley doesn't mean you have its regional dynamism," said AnnaLee Saxenian, a University of California, Berkeley, professor who has spent years studying the valley's attributes. "This notion that you can grow the next Silicon Valley by putting together a science park, venture capital and a university has been roundly disproven."

It is easy to see why so many keep trying. The statistics in a recent economic report on Silicon Valley -- the Northern California community named after the silvery metal on which integrated circuits are etched -- are enough to induce altitude sickness:

The region has created 200,000 new jobs since 1992.

Its average wage of $46,000 a year is 50 percent higher than the national figure.

In 1997 alone, venture capital spending was up 54 percent, about 3,500 new companies were born and housing starts hit a 10-year high.

No wonder, then, that economists and officials from other cities, states and countries flock to Silicon Valley hoping to decode its elusive DNA. Several members of the Swedish Parliament, for instance, recently spent a week visiting Silicon Valley's touchstones: the sandstone corridors of Stanford University, the leafy venture capital complexes along Menlo Park's Sand Hill Road and the sprawling corporate campus of Hewlett-Packard Co.

Other places may have premier universities, but only Stanford seems to turn out almost as many companies as graduates. Others may have budding venture-capital bases, but none can match Sand Hill Road's volume of nearly $1 billion in funding every quarter. That's not even to consider the rest of the region's business infrastructure, which includes thousands of technology-oriented law firms, headhunters, and public relations and marketing agencies.

And these are merely the most obvious ingredients. The intangibles are far more difficult to replicate. They include a culture that rewards risk and forgives failure, a liquid talent pool that coalesces around anything with stock options and an entrepreneurial intensity that keeps everyone from top executives to lowly programmers looking for the Next Big Thing.


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