Haynes and Boone's Newsroom

Many Vie, But The Valley's Lifeline Is Innovation
05/21/2011

Imitation is the sincerest form of flattery — so they say. Boosters in Wellington, New Zealand, call themselves “Silicon Welly.” And Texas Gov. Rick Perry said somewhere in America “Silicon Valley will be replicated. I want it to be in Austin” — even though central Texas dubbed itself “Silicon Hills” long ago. There’s also the Silicon Forest, Prairies, Alleys and other Valleys. Not to mention the No. 1 Silicon Alley — in New York City.

 

But imitation isn’t innovation — and that’s been the unique, unifying and driving force in area communities ever since William Shockley first attempted to make transistors on a commercial scale in the 1950s.

 

Let’s not worry about “re-branding” Silicon Valley – or losing our edge to an imitator. Our region has never been just about silicon. Rather, the region is in essence a Petri dish sustaining a rare culture. That culture is not easily copied, picked up or moved, as many have learned. It includes a unique confluence of scientists and engineers, venture capitalists and angel investors with keen calculations of risk, entrepreneurs who have vision, business executives with a knack for shepherding start-ups, and lawyers who are expert in M&A deals, the protection of intellectual property and an understanding of trade with Pacific Rim nations.

 

This is not to say all the grass is green. The 2011 Index of Silicon Valley painted a gloomy outlook with California’s economic problems weighing on the region: unemployment, government budgets and education funding are undermining Silicon Valley’s infrastructure. The area continues to be unaffordable homebuyers. The Index paints a picture that the Valley has lost its edge.

 

The future of the region still may be exemplified by some of its “silicon” industries. While many chip manufacturing plants long ago made an exodus offshore, those facilities were for mass manufacturing, a long way downstream in the product cycle from where innovative ideas germinate and are leveraged to realize the most economic advantage. The talents in semiconductors, computers, mobile applications, software, entertainment and gaming, and other technologies have continued to congregate in the Valley, and benefited from the unique synergy of players in the sector. Fairchild Semiconductor, an early Valley nameplate, announced plans to return its headquarters to San Jose. GlobalFoundries, the newest entrant in global semiconductor wafer fabrication, selected Milpitas as its headquarters.

 

Published in Wired Epicenter Blog, May 21, 2011. To read the full article, click here.