Chapter Abstract: “Silicon Valley: Too Much Success?” – Book “Computing Predictive Analytics, Business Intelligence, and Economics Modelling Techniques with Start-ups and Incubators”

Authors: Prof Henry Etzkowitz and Dr. Annika Steiber

The Katrina hurricane resulted with a dislocation of people in New Orleans, San Francisco, as well as in the whole Silicon Valley region. In 2017, the Silicon Valley Index reported a quick movement out of the Silicon Valley, thus between July 2015 and July 2016, the loss of residents that moved in other regions of California and the U.S. was 20,801 people, and the region counted 22,500 new foreign immigrants. On top of this, the unintended consequences of success are damaging the urban social fabric and causing attendant personal distress. The persisting negative consequences (even if positive in some perspective) that occurred due to the Katrina hurricane are known as the ‘Katrina Effect’, and it is discussed by Prof Etzkowitz and Prof Steiber.

Furthermore, one of the issues discussed are the strict rules against discussing technical information with outsiders set by some companies in the Silicon Valley, due to the exchange of internal information among employees working in different forms. Hence, the question “Is Silicon Valley place-bound or could it be replicated, and thereby threatened in its position as the leading innovation hub of the world?”, is being answered through interviews, in which the interviewees were divided into two clusters, one cluster believed that the Silicon Valley was place-bound, and the other one was optimistic, which believed that the Silicon Valley may experience less inflow of both great talent and companies in the future, under the assumption that there is a finite limit that cannot be expanded upon. The unintended consequence of “over success” is discussed, under which too much success is being determined as a broader concept than Silicon Valley, with artistic impetuses as well. Additionally, the ‘corporate induced disaster’ introduced by Prof Etzkowiz, 1984, is being argued, and it is believed that this concept is still in the making, considering the reluctant displacement of people as a harmful consequence of the innovation success. Lastly the concern of the imbalance between the public and private sector is discussed, with an effort to address the issue of the economic benefits investments into small elite, rather than investing them on public goods (i.e. infrastructure, education, R&D and healthcare, creation a broad range of economic opportunities, etc.).


From the book “Computing Predictive Analytics, Business Intelligence, and Economics Modelling Techniques with Start-ups and Incubators
Editor: Cyrus F. Nourani, PhD