Book Review

Chaos Monkeys:
Obscure Fortune and Random Failure in Silicon Valley

Antonio Farcia Martinez (Author)

Reviewer:
Dr Tatiana Pospelova
Lomonosov Moscow State University
Moscow, Russia

Publisher:  Harper Collins

 

As a person who has just finished my PhD degree, I reacted to the book ‘Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley’ by Antonio G Martínez like a researcher.  One day I found an interesting Facebook post by my friend from Silicon Valley:

“As every new arrival in California comes to learn, that superficially sunny ‘Hi!’ they get from everybody is really, ‘Fuck you, I don’t care’.  It cuts both ways, though.  They won’t hold it against you if you’re a no-show at their wedding, and they’ll step right over a homeless person on their way to a mindfulness yoga class.  It’s a society in which all men and women live in their own self-contained bubble, unattached to traditional anchors like family or religion, and largely unperturbed by outside social forces like income inequality or the Syrian Civil War.  ‘Take it light, man’ elevated to life philosophy.  Ultimately, the Valley attitude is an empowered anomie turbocharged by selfishness, respecting some nominal ‘feel-good’ principals of progress or collective technological striving, but in truth pursuing a continual self-development refracted through the capitalist prism: hippies with a capitalization table and a vesting schedule”.

After three years living in the heart of San Francisco I was totally agree!  As a researcher I found the author’s Facebook page, checked his public live story with both his corporate and start-ups experience and I understand that Chaos Monkeys will be among the top books on the ‘need to read list’.

When I started reading it, I found a lot of real life things such as: “Before the American Revolution, half of the European immigrants to the British colonies came over as indentured servants.  Poor children or young adults, with no passage to the America.  Across the pond, employers would purchase these individuals from the captains who had brought them over, and they were pressed into service or apprenticed to craftsmen.  Servants’ child could be bought or sold, as with slavery.  Also as in slavery, servants were subject to physical punishment, including whipping, they could not marry without permission.  At the end of the contract, servants were given their ‘freedom dues’ (a small cash payment, and set free to seek their fortunes in their new homeland).  Not much has changed in Silicon Valley”.

After that Antonio describes the true stories about how immigrant engineers from different countries are trying to find loopholes in
the US Immigration Law and continue staying and working legally in the USA.  That is a common topic for most of the international start-ups in Silicon Valley.  The same story about real estate prices in the Bay Area and lifestyle.  There are several books over the last fifty years about the Silicon Valley phenomenon, most of them scientific or business-oriented. Chaos Monkeys is modern, truthful, and about real life.  The book is written in spoken language with slang, sometimes including profanity, simply and clearly.  However, when you leave Stanford University campus into real life you will hear this slang at tech events.

Nowadays it is not easy to find this book in a shop, it sold like hot cakes.  I definitely recommend reading this book to:

  1. People from the Bay Area, to read about themselves and laugh.
  2. Entrepreneurs, who are planning to come with their start-ups to Silicon Valley
  3. Everyone who uses Twitter, Facebook, Google, etc every day, who wants to know how the tech world is arranged in a real, not virtual life.

I recommend Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley by Antonio García Martínez because it is based on an actual story of a startup founder and not another general teaching material that you can find in several online courses about building startups.  Plus it’s funny and witty.

As a hashtag for future readers: during the time when I read this book I tried to find the answer to the question: why is this book called Chaos Monkeys?

The answer: “In order to understand both the function and the name of the chaos monkey, imagine the following: a chimpanzee rampaging through a data center, one of the air-conditioned warehouses of blinking machines that power everything from Google to Facebook.  He yanks cables, smashes a box, and generally tears up the place.  The software chaos monkey does a virtual version of the same, shutting down random machines and processes at unexpected times.  The challenge is to have your particular service – Facebook messaging, Google’s Gmail, your start-up’s blog, whatever – survive the monkey’s depredation”.

 

Innovation Causality: Silicon Valley and Other Experiments in Creative Reconstruction – a Review Essay

Henry Etzkowitz
Stanford University STS
International Triple Helix Institute
Palo Alto
www.triplehelix.net

Martinez, A. (2017) Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley.  New York: HarperCollins.

Komori. S. (2015) Innovating out of Crisis: How Fujifilm survived and thrived as its core business was vanishing. Berkeley: Stone Bridge Press.

Kidder, T. (2016) A Truck-full of Money. New York, Random House.

Juma, C. (2016) Innovation and its Opponents: why People resist New Technologies.  Oxford: Oxford University Press.

Introduction

Chaos Monkeys are the PhD physics drop-outs, computer science graduates, and others from diverse quantitative backgrounds, who work algorithmically on Wall Street, turning mechanics equations to financial manipulation.  Financial firm recruiters in recent years have emptied out physics departments to fill their need for highly skilled “quants”.  Martinez, the author of this volume, is the prototypical financial quant, a dropout from the Berkeley physics department, after finally succeeding in passing the qualify exam after three tries.  However, experiencing burn out and boredom, the lure of Silicon Valley drew our hero westward.  Martinez skill set was motivational, organizational, and inspirational.  In other words, he was an entrepreneur, oriented to blogging, “bulshittting” rather than coding.  Thus, he returned to the Bay Area, finding employment in a start-up beyond the inception stage but prior to the take-off phase of customer revenue flow and serious investment.

Shigetaka Komori, CEO of Fujifilm Holdings Corporation, authored Innovating Out of Crisis.  At the brink of creative destruction, Komori must navigate the innovation rapids with unerring foresight and bravery or see his firm die like its world class competitor, Kodak, the iconic American firm that lost courage.  Fujifilm found that the way forward is to act like a nimble startup: rapidly downsize the heritage business, identify new business opportunities for the firms technological competencies, acquire firms to assist in developing these opportunities, and have the courage to stay the course even when the new businesses are not showing the same level of profit as the old ones still temporarily manage to produce.  Whether startup, icon, or incumbent, innovative firms are committed to filling gaps in existing technologies and advancing the innovation frontier.
Taken together, several recent books delineate the stages and phases of innovation and entrepreneurship in contrasting societies and cultures, e.g. Silicon Valley, Boston and Japan.  The state-of-the-art is exemplified by a Silicon Valley start-up struggling to attain momentum for take-off, a besieged Japanese technology firm, formerly dependent upon a single superseded product, averting impending “creative destruction”; a Silicon Valley social media multi-national, conglomerating itself to pre-empt ever having to face the demise; contrasting incubator and accelerator experiences in Boston and Silicon Valley, with weaker and stronger human capital attraction magnets. These comparative cases exemplify the moments of contemporary creative reconstruction, embodying an expanded vision of classic “creative destruction” that includes birth, rebirth, absorption, and renewal, as well as supercession and spontaneous combustion (Schumpeter, 1944).

The Wisdom of the Start-up

Chaos Monkeys is a participant’s view of two moments of contemporary Silicon Valley life: the newly birthed start up as a hopeful business experiment, and employment in Facebook, an iconic firm, that was a start-up itself a decade ago.  Martinez shares his personal and business experience and insight on Silicon Valley, occasionally drawing on traditional social science expertise like Leon Festinger’s theory of cognitive dissonance to help make sense of the scene.  He is a scatological blogger who has scaled up to a traditional book format to gain a broader public.  The book is well written, raunchy, with a major publisher, Harper Collins, matter of fact printing words, like “fuck,” that heretofore would have been asterisked or blank spaced if they were not entirely excised.

The author is out of Miami, via parents who left Cuba as teenagers.  The grandparent generation included a Fidel Castro classmate at an elite Havana law school.  Proud of his forbears, including a stern father who pursued a safe career in Florida real estate, Martinez, from an immigrant background, clearly identifies with the “hardscrabble” ambitious persons who fought their way up rather than arriving in Silicon Valley, dropped off the “tour bus” of an elite background, his characterization of the upper class of Silicon Valley denizens, delivered from the womb onto the Harvard, Stanford conveyer belt.  Martinez, doesn’t mention his undergraduate alma mater, at least to this reviewer’s recollection, but made it to the PhD program in physics at Berkeley, an elite academic scene.  Finding himself at the low end of academic distinction, succeeding in his qualifying exam after three tries; he decamped from academia to try his luck as a quant in applying mechanics equations to financial problems at Goldman Sachs.

The central character of this memoir is Martinez’ macho geek persona that strains to burst loose from the chains of so called “political correctness,” otherwise known as civility.  What comes through between the lines, if not on them, is emblematic of a culture in which women are constrained to look like men (wearing hoodies and jeans at Facebook, for example), while acting as traditional females, in order to fit in.  The text has the feel of being either self-edited from the blogs on which it is based, or the author lightly admonished by an actual editor, to keep it from being grounds for feminist critique.  Such attacks may appear in any event, if not against Martinez, but on the start-up genre that this work celebrates even as it provides a realistic depiction of self-abnegation and total task absorption.  Martinez, himself, cites start-up exigencies as a reason to distance himself from his young child even as a male colleague maintains balance.

Chaos Monkeys is at one and the same time an advertisement for the Silicon Valley start-up scene, a guidebook to entry and the various personal characteristics that will enable success as well as a cautionary warning that all that glitters is not gold.  Nevertheless, like many of the 49’ers of the original Gold Rush, who found ancillary occupations as grocers, assayers and bar keepers to service the gold panners or direct producers, the contemporary Silicon Valley start-up “gold rush” also requires supporting actors such as employment attorneys, public relations specialists, and others who constitute the ecosystem of the region.  There are human resource specialists to debrief departing employees, maintenance personnel, and even artists, like the one who decorated the original Facebook headquarters and was paid in stock that eventually became quite valuable.  Of course, had he painted a firm that failed, he would have been working without recompense.

Entrepreneurial Experimentation

Seeing the writing on the wall of clients not sticking to the start-up where he was working; and the deadline of applications for Y Combinator, the premier Silicon Valley accelerator, a hybrid cross between higher education and business that offers nascent entrepreneurs access to key networks, as well as a financial stipend and collegiality of fellow start-ups for a limited period of time, was irresistible.  Sensing that his employer is unlikely to traverse the valley of death, Martinez decides to start-up recruiting two fellow employees who agree with his assessment that they are treading water in a firm that is going nowhere.  The push to start up is
impending unemployment; the pull an intriguing invitation.  That is the view from the start-up entrepreneur side.  From Accelerator Y Combinator’s side, it is a methodology of accessing people and ideas that can be capitalized as the next generation of Silicon Valley start-ups.

Silicon Valley is a laboratory for “business experiments” in the form of start-up firms that are temporary in nature, ready to be dismantled and closed down at the earliest sign of failure, or possibly redesigned and repurposed, in a so-called “pivot.”  Achieving independent viability and long-term persistence, or even IPO, is not his vision.  Bootstrappers like Conteneo, a six year old gamification consulting and software development firm, and Bell Biosystems, also view acquisition as a successful outcome.  In the wake of significant technical and scientific success, they expect to be acquired by large firms to take their products to broader markets.  In the event of modest success or hidden failure, they may still be acquired at a premium for their personnel whose worth has been enhanced by virtue of conducting even a failed experiment.  This is a realistic view of start-up entrepreneurship.  In business, as in science, only a very few experiments are Nobel or Facebook worthy of being scaled up to word class renown and/or financial efflorescence.  Silicon Valley is thus becoming a mature economy characterized by a relatively stable set of major players.

Chaos Monkeys is a window on the recent Silicon Valley start-up scene, circa 2010-2015, written by a participant from the vantage point of a modestly successful start-up that he parlayed into becoming an employee of an iconic firm.  Facebook is a charter member of the emerging Silicon Valley oligopoly, including Google and Apple that have the financial ability and technological foresight to purchase virtually any potential competitor.  Thus, they may proactive, rather than retrospectively, like Fujifilm, avert the fate of creative destruction that lies in wait for any successful firm, like Kodak, afflicted with innovation hubris, the belief that they own their field and are immune to disruption.  Facebook’s founder, to inoculate his firm against innovation hubris, retained the iconography of the previous inhabitant of his firm’s new campus, the former headquarters of SUN Microsystems, the workstation firm that in the 1980’s was a rising star, propelled from Stanford’s internal network infrastructure.

Blindsided by the emergence of servers and software that superseded its workstations, SUN whose acronym stands for Stanford University Network, succumbed to the Schumpeterian flu.  Facebook, however, paid sixteen billion dollars, to head off its potential disruptor Instagram, and two billion dollars to acquire Oculus, a virtual reality firm whose technology is expected to reach commercial maturity in a half decade or so.  No amount is too large, despite naysayer’s dire prophecies, if a newcomer has monopoly destabilization potential.  Silicon Valley giants are gaining sufficient foresight capabilities to disrupt their expected disruptors.  Nevertheless, the next new cool technology may still exceed their grasp.  A colleague reports that his first year students consider Facebook passé and have migrated to novel social media sites, thus far out of the techno-Gulliver’s grasp.

A participant at the University of London, Birkbeck Innovation Policy Workshop (2017) mentioned in a personal communication that a speaker at a recent European Union innovation event, held that the Garage is key to Silicon Valley, but who has the key to the Garage?  He held that an uncomfortable working place is the secret sauce of the Valley, motivating start-up founders to achieve success (Vezzani, 2017).  Perhaps there is something to the myth!  Martinez describes his three person startup crew, cooped up in an inexpensive Mountain View apartment (when there was such a thing) working long hours at close quarters: feverishly coding, sharing the same toilet, becoming overly familiar with each other’s shit, literally and metaphorically.  The realistic motivation was to attain just enough success to be able to sell out to a larger firm and acquire well paid jobs with good equity terms, as an “acquisition hire.”

Veblen’s Vision Recuperated

Martinez portrays a bifurcated Valley, with venture capital, tech firm founders, and large firm leadership equally sourced from elite and hard scrabble backgrounds.  Some arrive from elite universities with strong networks, while others have fought their way up through technical talent and entrepreneurial cunning or some combination of the two.  (We may assume that Martinez fits the latter category since we do not recall him mentioning his university of origin).  The Silicon Valley start-up is depicted as a personnel evaluation mechanism for the larger firm to test the mettle of potential employees and perhaps acquire some relevant technology.  Having successfully traversed this rite of passage, Martinez views the Valley from inside of one of its iconic firms.  Engineer led, and managed, Facebook is the apotheosis of Thorstein Veblen’s vision.  In The Engineers and the Price System (1921), the founder of Institutional Economics, sometime Stanford Professor, foresaw the emergence of corporations whose managers are subservient to, even superseded by, technical experts in charge of production processes that eschew waste.  Veblen eviscerated with sardonic humor and conceptual bravura a society whose economy was driven by consumer status envy (1899). Contemporary algorithmic metrics, like those Martinez struggled to introduce into Facebook, sophisticate the influencing of consumers orders of magnitude further (Christin, 2017).

The Networked Firm

A new generation of Silicon Valley firms, like Uber, Airbnb, have discovered the “strength of no ties” substituting algorithmically generated links through the Internet among people previously unacquainted and at the lower end of the proverbial six degrees of separation, well beyond either “strong” direct ties or “weak” indirect ties through a single intermediary.  The reputation of the firm displayed on the web, through satisfied users, or at least not too many dissatisfied ones (who are immediately addressed and placated) is the basis of a business model that has turned underutilized resources (a spare room) an underutilized vehicle and an underemployed owner into multi-billion dollar firms.

Business opportunity of “no ties” the third element in a typology of “strong and weak” that is being filled by software algorithms and technology entrepreneurs who seek out these gaps in various areas of society, viewing them as business opportunities, begging to be filled.  Indeed, the software constructions of virtual ties, may conceivably become as or even more prevalent than the previous two in an emerging social structure that is increasingly mediated by
social media rather than traditional social institutions, like churches, pubs and coffeehouses, where people traditionally assembled on the basis of shared belief and geographical propinquity.

The Evolution of the Valley

An ecosystem of innovation and entrepreneurship (start-up entrepreneurs, angels, venture capitalists, accelerators, incubators and science parks) is built upon a substrate of university-industry-government interactions that paradoxically becomes less visible as the ecosystem become more successful and complex and more visible when it is less successful or new-born.  The contemporary Silicon Valley start-up is a hermetic environment, inserted in a nutrient force field of accelerators, angels, employment and immigration lawyers, accountants, thought leaders and even “older” failing start-ups, some of whose employees realize doom is pending and depart for their own start-up, as well as successful firms, seeking talented people and projects that they can acquire to forestall their own failure and achieve greater success.

Y Combinator, StartX and its fellow accelerators, provide a reliable conveyer belt from start-up sources in failing firms and universities to venture capitalists and large firm acquirers of talent and technology.  The commodification institutionalization of the start-up process as a kabuki dance between experienced and nascent entrepreneurs.  The difference between earlier era when Jobs and Wozniak had to recruit an older successful entrepreneur, Mark Merkkula, as co-founder to give their nascent venture credibility; this important feature of start-up success can be outsourced to an organization like Y Combinator Accelerator that can simultaneously provide this asset to a large number of firms.  Thus, “adulthood” does not have to be internalized within the firm; it can be accessed on an “as needed” basis when the firm is incorporated into a network.

The Silicon Valley oligopoly companies are recreating some of the characteristics of the Hollywood studio system, combining production of content with control over distribution.  Before anti-trust proceedings forced them to divest their theatre chains, MGM and its peers both made and marketed films.  Perhaps ironically, this separation was accomplished just as the rise of television was about to make them less relevant as distribution mechanisms.  Just as the Hollywood classic studios, depicted by anthropologist Hortense Powdermaker, in her classic monograph, showing the workings of the Hollywood studio. The studio system produced a variety of motion pictures, having the human and physical resources of writers, hairdressers, sound stages, directors, musicians, etc.

These variegated resources, organized in-house, could be deployed in a variety of projects simultaneously.  Contemporary Silicon Valley megacorps, like Apple, Google, Facebook (Alphabet) are studios that have developed similar in-house capacities to the classic Hollywood entities.  Indeed, Google reincorporated as Alphabet, in recognition of its multiple, simultaneous project strategy.  The main difference between the Silicon Valley and the classic Hollywood appears to be that employment contracts are less binding and long term, with even key employees expected to leave for competitors or to lead or join a start-up effort.

The Silicon Valley start-up has become a personnel evaluation mechanism for the larger firm to test the mettle of potential employees and perhaps acquire some relevant technology having successfully traversed this rite of passage Martinez views the valley from inside of one of its iconic firms.  Facebook engineer led, and managed, Facebook is the apotheosis of Thorstein Veblen’s vision in The Engineers and the Price System (1921), of corporations whose managerial class has been superseded by technical experts in charge of the production process that, he expected, would eschew waste and provide social benefit.  Dropping the trappings of capitalism, without taking up the reins of socialism, they would in other words, crate a munificent pro bono regime, much as the founders of Facebook and Google see and present themselves.

The Silicon Valley Magnet

Silicon Valley has become a global magnet, attracting large numbers of technical personnel, trained in universities around the world, including from MIT, to work in its firms.  Moreover, it has been noted that larger numbers of MIT graduates form firms in the valley than in Boston.  Indeed, Facebook, incubated at Harvard, was attracted to the Valley at an early stage as a better scene to support its growth.  Indeed, the Boston incubator start-up turned out to be no match for Silicon Valley Y Combinator or StartX, each incubating dozens of start-ups in each class.  The 3-4 firms attracted were insufficient to achieve viability and the support staff resources internalized in the incubator, rather than accessed through networks as in Silicon Valley, were eventually put to use as a single start-up venture, suggesting the force of the Silicon Valley Virtual Magnet, lining up global entrepreneurial talent, IP and other inputs into the knowledge-based economy, like iron filings ordered by a physical magnet.

Tracy Kidder’s biography of the rise of a Boston computer entrepreneur from humble roots in the computer science department of the U Mass Boston, tech firm employee to start-up entrepreneur, sale of high growth travel start-up and reinvestment in an incubator firm, expected to rival Silicon Valley’s Y combinatory on the basis of MIT and Harvard’s greater scale than Stanford, found itself with relatively few interesting candidates to invest in.  The comparison to Silicon Valley had failed to take into count an essential feature of the Valley; its attractiveness to aspiring high tech entrepreneurs globally; the very reason that had pulled Zuckerberg to move his nascent firm to Silicon Valley.  The 3-4 firms successfully vetted for entry to the Boston Incubator were insufficient to achieve viability for the project.  Indeed, its support staff resources internalized in the incubator, rather than accessed through wide networks as in Silicon Valley, are suggestive of relative regional innovation capacity.

Silicon Valley vs Boston

Comparing Boston and Silicon Valley, the east and west coast technology scenes, has been a recurrent theme since Fred Terman, later an iconic Stanford Provost, wrote to a colleague from his war-time perch managing the radar countermeasures lab, housed in the biological sciences building at Harvard that Stanford must follow the MIT model of large scale government-funded collaborative research in the post-war or be consigned to the oblivion of a Dartmouth status, then a relative small primarily teaching college
with a two year medical school, albeit with Ivy League status.  Since Annalee Saxenian’s (1994) iconic distinction between internally focused firms on Route 128 and communities of technologists sharing technical ideas in Silicon Valley watering holes; an academic industry of comparative regional technology conurbations has emerged and proliferated (Hall and Markusen, 1985).

The nascent post-war Silicon Valley ecosystem, when venture capitalists sought out potential clients in nondescript business strips is within the living memory of its senior practitioners, some of whom arrived from the mid-west or east coast.  Draper presently mentors a developing country venture mentoring organization from a discrete Palo Alto location adjacent to the Hewlett Foundation.  Draper wrote The Startup Game, comparing the early days of Silicon Valley venture capital financing, to Wall Street corporate underwriting, his family’s original business and how his career progressed from business to public service as head of the US Export-Import Bank and back again to Silicon Valley.

Draper (2009) tells the story of how his iconic venture firm, achieved its initial funding with the support of a US government program sponsored by the Eisenhower era Small Business Administration, designed to expand venture capital nationwide, from its Boston birthplace.  ARD (American Research and Development Corp), founded in 1946, led by Harvard Business School Professor General George Doriot and staffed by MIT and HBS grads as technology scouts and business advisors.  The invention of the venture capital firm was the culmination of a regional renewal effort dating from the 1920’s.  This New England Triple Helix invention of “innovation in innovation,” through systematizing the university spin-off process, is a work that is still in progress (Etzkowitz, 2002; Ante, 2008).

Silicon Valley has become a global magnet, attracting large numbers of technical personnel, trained in universities around the world, including from MIT, to work in its firms (Bank Boston, 1997).

Boston is also a magnet for international talent arriving at MIT and Harvard, but also Boston College, Boston University, Northeastern University, and Brandeis University exemplifies the nurturing of local talent, for example, Paul English, successful software entrepreneur, founder of Kayak, the protagonist of Tracy Kidders whose technical skills were nurtured in the computer science program of the University of Massachusetts, Boston.  Tracy Kidders biography of a highly successful technology entrepreneur provides a longitudinal perspective on the start-up/large firm high tech scene in comparison to Martinez relatively brief career, to date.  Finding his métier in the computer science department of a local university, English worked in one of the computer firms that AnnaLee Saxenian (1994) depicted in her comparison of Boston and Silicon Valley high tech scenes.

After a successful high tech career culminating in teaching entrepreneurship at MIT, English organized an incubator with a corps of internal advisors and a funding offer to successful applicants, higher than usual.  He expected great success, noting that MIT and Harvard were larger than Stanford and therefore could be expected to produce a larger number of spin-offs.

However, when the incubator opened, there were only a few successful applicants.  In the end, it was determined that the best use of the incubator’s advisor corps was to do their own startup.  The MIT Stanford size comparison was inappropriate as the Bank of Boston study earlier showed that MIT graduates contribute more start-ups to Silicon Valley than to their home region.

Policy Implications

Like iron filings ordered by a physical magnet, the Silicon Valley Innovation Magnet, lines up global entrepreneurial talent, IP, and other inputs into the knowledge-based economy.  Paradoxically, Silicon Valley has an inadequate academic base to support the vast and burgeoning scale of its high-tech economy (Etzkowitz, 2013).  The Valley is a magnet for international technical entrepreneurial talent, much of it tied to the thin reed of the H1B Visa program of quasi-indentured servitude to large firms.  The Obama Administration was amenable to the blandishments of the Valley elite but the importation of talent model is currently at risk of disruption, given the Trump Administration’s immigration skepticism and worse (Etzkowitz, 2016).

Stanford sociologist, Dick Scott, and Michael Kirst, former California State University President, presently with the Stanford Graduate School of Education, presented a detailed empirical analysis of the mismatch between Silicon Valley universities and its major industry.  Their seven fold typology of area academic institutions, includes everything from Chinese acupuncture schools to the University of California at Berkeley. Connected but Conflicted: Higher Education and Silicon Valley (Scott and Kirst, 2017), identifies a huge, expanding gap in “… a longitudinal study of 350 post-secondary institutions in the San Francisco Bay Area from 1970 to the present” (Times Higher Education, 2017).

In the 1990’s software boom, De Anza Community College and its peers retrained high-school drop-outs and literature PhD’s alike, to fill the coding maw of area firms.  However, the conservative attack on the state through 1971’s proposition 13 limits on both individual homeowner property and business taxation eventually constricted the heretofore resource rich Californian public education system of higher (and lower) education.  In response, Silicon Valley’s elite founded private schools to care for their children’s educational needs and imported graduates from abroad to staff their firms.  The Silicon Valley talent pool was increasingly, sustained and expanded exogenously through the lobbying efforts of Valley firms to expand visa programs, rather than endogenously through the areas universities and schools.

The California master plan formulated by Clark Kerr sixty years ago is still in place even though he only expected it to last a decade (Douglass, 2017).  This procrustean academic bed limits San Francisco State and San Jose State to the masters level, in inhibiting the academic rise that their sister school, the University of Massachusetts, Boston, is experiencing, developing PhD programs in niche underserved local areas such as gerontology and marine science, and in computer science and biotechnology, where local demand exceeds the supply of Boston’s universities.  Silicon Valley has based its skill strategy on lobbying for visas to import its high-level technical workforce. Boston more relies on endogenously developing talents in a continually upgraded public and private
primary, secondary and tertiary system.  California’s k-12 public systems declined precipitously in recent decades and public higher education is stressed. This regional divergence, if not redressed, will vitiate Silicon Valley’s innovation performance, especially if xenophobic pressures shrink the “political fix” of the H1B visa program, whose fast track was recently cut,

Coda

Debate over the course and direction of societal change, influenced by technological change and vice versa, is the subject matter of Innovation and Its Enemies (Juma, 2016).  Calestous Juma, Professor of Practice at Harvard’s Kennedy School, jumped from TTC (Teacher Training College) graduation in Kenya to a SPRU PhD, after leading a Nairobi innovation development organization.  A proponent of applying biotechnology to agricultural problems and opportunities, especially in developing countries like his own, Juma analyzes meta-STS value issues of technological, economic and social change through a series of historical case studies of international technology and cultural transfer e.g. coffee, margarine, printing the Koran, sound recording, etc, providing a frame for dealing with the author’s key issue: transgenic crops.

Whereas the previous volumes focus, explicitly or implicitly, on technological advance, concomitant economic development and cultural shifts, Juma is interested in the converse question of why technological change is held back, even when it could advance human betterment.  From either direction, technological issues are embedded in value dilemmas, with two philosophical approaches to technological innovation: risky until proven safe, and safe until proven risky.  Concern over the appropriate course to pursue divides and unites proponents and opponents of innovation.

An ecosystem of regional entrepreneurship innovation mentoring and assistance has been constructed as a superstructure built upon a base of university-industry government interactions.  The ecosystem is a second order construct on an underlying foundation of university-industry and university government interactions that set in motion the dynamic of Silicon Valley high tech firm formation decades ago.  For Martinez, Silicon Valley is the zoo where chaos monkeys are kept, and their numbers only grow in time explosion of venture capital.  The question for society, and the participants in the start-up game is “… whether it can survive these entrepreneurial chaos monkeys intact, and at what human cost” (Martinez, 2017).

To be continued …

References

Ante, S. (2008) Creative Capital; Georges Doriot and the Birth of Venture Capital.  Boston: Harvard Business School Press.

Bank Boston (1997) MIT: The Impact of Innovation.  http://news.mit.edu/1997/jobs.

Caspar, S. (2007) Creating Silicon Valley in Europe.  Oxford: Oxford University Press.

Christin, A. (2017) Algorithms in Practice: Comparing Web Journalism and Criminal Justice Workshop: Economic Sociology and Organizations, Sociology Department, Stanford University, 7 March.

Douglass, J. (2017) Comment, Center for Studies in Higher Education (CSHE) Colloquium on Silicon Valley Universities.  February.

Etzkowitz, H. (2002) MIT and the Rise of Entrepreneurial Science.  London: Routledge.

Etzkowitz, H. (2013) Silicon Valley at Risk: the Sustainability of an Innovative Region Social Science Information, vol 52, no3.

Etzkowitz, H. (2016) Silicon Valley’s Paradox of Success: the Katrina Effect.  Hélice vol 5, 3-4.

Granovetter, M. (1983) The Strength of Weak Ties Revisited.  Sociological Theory 1:201-233.

Hall, P and Markusen, A. (1985) Silicon Landscapes.  London: Unwin and Hyman.

The World University Rankings. Silicon Valley and local universities show ‘mismatch’. www.timeshighereducation.com/news/silicon-valley-and-local-universities-show-mismatch

Roberts, E.  Entrepreneurial Impact: the Role of MIT – An Updated Report – MIT ILP.
https://ilp.mit.edu/media/webpublications/pub/…/Entrepreneurial-Impact-2011.pdf

Saxenian, A. (1994) Regional Advantage: Culture and Competition in Silicon Valley and Route 128.  Cambridge: Harvard University Press.

Schumpeter, J. (1944) Capitalism, Socialism and Democracy.  New York: Harper.

Scott, W R and Kirst, M W. (2017) Connected but Conflicted: Higher Education and Silicon Valley.  (In press).

Veblen, T. (1994) [1899] The Theory of the Leisure Class: An Economic Study of Social Institutions.  New York: Dover.

Veblen, T. (1921) The Engineers and the Price System.  New York: B.W. Huebsch, Inc.

Vezzani, T. (2017) Personal Communication, Birkbeck Innovation Workshop, 24 February.