Are Silicon Valley’s Days Numbered?
The rise of tech hubs outside of the U.S
California’s Silicon Valley is traditionally the hub of the global tech community, housing huge, innovative corporations including Apple, Facebook and Google. Named after the silicon chip innovators who flocked to the region in the 1950s, it’s also a hotspot for R&D facilities like NASA’s Ames Research Centre, and home to the Stanford University. Over the years, various key technologies have been developed in the valley, including the first microprocessor. All of this, and more, has contributed to the area’s formidable reputation. There’s even an American TV series with the imaginative name of ‘Silicon Valley’, which focuses on the efforts of six young entrepreneurs as they attempt to set up a successful start-up amongst tough competition. So, it’s safe to say that Silicon Valley is where it’s at for technological innovation. . . but, California isn’t the only place fostering new innovators. Hubs across Europe and Asia are growing as governments, businesses and investors realise the need to support positive disruption. How will the geography of the tech landscape change in the face of competition from new global centres?
The rise of new tech centres
For over half a century, Silicon Valley has reigned supreme as the world’s most innovative region, but the continuation of this dominance is increasingly uncertain due to the expansion of innovative areas in different parts of the world. As of October 2016, there are now over 450 centres like Silicon Valley worldwide – that’s an increase of 51% since the summer of 2015. But where are they?
In Asia, there are rising technological communities in Singapore, Shanghai, Tokyo and Dubai. And in Europe, London, Berlin and Paris are stepping up to the plate. The reason for this is a new attitude towards innovation, leading to the availability of more resources. This includes anything from money to academic partnerships. It’s also about providing space – in 2012, a brand new campus for creative businesses named Here East was opened in Stratford, London. The facility provides incubation and acceleration programmes on site.
In short, startups no longer need to cross the Atlantic to get the support they need to make a name for themselves. A number of companies have already recognised this – look at automotive car manufacturer Delphi, which has partnered with the government of Singapore to equip the city with self-driving vehicles by 2019.
How disruptive are new tech hubs?
The rise of new geographic hotspots for tech will undoubtedly have an effect on Silicon Valley by redistributing power. Long-standing companies may even begin to set up headquarters in new tech cities to keep an eye on their development – eventually, some businesses could leave the valley altogether. Without the draw of successful firms, startups may also begin to look elsewhere. Team that with suspicions about the tech giants and their new cartel, and it could be Silicon Valley’s last days as the promised land for tech entrepreneurs. The influence of companies based in Silicon Valley could be further challenged by America’s controversial president elect, who hasn’t exactly looked favourably upon tech giants (especially Apple) and wants to control their power. When it comes to disruption in the wider world, the massive growth of tech hubs is evidence for a societal shift towards a willingness to adopt and invest in technology. This is part of a wider global movement which is disrupting the dominance of the U.S., and at the same time as helping the development of LEDC areas. The changes caused by this reshuffle of talent and resources is generally a good thing for innovation and development.
From a business perspective, the more concentrated areas of technological growth there are, the more competition there will be. Established businesses (and not just the big names in Silicon Valley) will have to formulate an effective response to increasingly crowded markets. However, as much as this will create competition, it will also lead to far more opportunities for startups looking to gain influence or existing firms eager to acquire promising young companies.
Although one city alone might not pose a serious challenge to the dominance of Silicon Valley, the collective impact of emerging tech centres across the globe definitely will. The distribution of talent and investment will help new players in Europe and Asia to build up their reputations, encouraging and fostering startups. This doesn’t mean that Silicon Valley is going to be totally abandoned, but the valley’s monopoly on innovation will take an inevitable hit. In the face of potentially unfavourable government policies, the future of the Californian tech hub is even more uncertain. While changes to global technological geography is a challenge to the region’s long-standing domination, it’s not necessarily a bad thing. Expanding innovation will lead to improved R&D and a better understanding of tech in general. This in turn will encourage societies across the world to accept and adopt technological advancements. When it comes to the valley’s resident tech giants, they do have the resources to ride out the storm – and if all else fails, they could even relocate to a more favourable location if a clear competitor emerges. This probably isn’t great news for the American (or at least the Californian) tech scene, but it might be about time to pass on the baton. . .
Is Silicon Valley realistically challenged by the growth of tech hubs outside the U.S.? Will a region in Asia or Europe emerge as the most successful challenger tech hub? How will Trump’s policies effect the Silicon Valley giants? Share your thoughts and opinions.