Why is Silicon Valley being compared to Detroit?

Milken Institute finds strong start-up culture, but some entrepreneurs looking elsewhere

It is held without question that Silicon Valley is the center of the high-tech universe in the United States. It's still undisputed. A Milken Institute study released this week places Silicon Valley at the top of its list of top 50 high technology regions in the U.S. And the majority of U.S. venture capital money still flows into that region's technology industry.

But it seems that increasing numbers of people are wondering if Silicon Valley is worth it.

Penelope Trunk explained in a blog post this spring why she moved to Madison Wis. rather than Silicon Valley to launch her third start-up, Brazen Careerist. "The bottom line," she said in a post titled Starting a company in Silicon Valley is stupid, "is that I wanted to be able to support my family and take the wild risks that come with having a startup. Supporting a family in [New York City] or Silicon Valley is insanely expensive, especially for someone who has no cushion to fall back on during the months when funding is tight."

Meanwhile, Robert Scoble, of technology blog site Scobleizer, said that Silicon Valley may be setting itself up for a "brain drain" because, among other things, "entrepreneurs are figuring out that they can start companies elsewhere and do just fine."

And Farrokh Hormozi, a professor at Pace University in New York who studies the IT labor market, compares Silicon Valley in a way to Detroit, where auto manufacturing has been in a gradual decline for decades "My feeling is the time for Silicon Valley is over," he said.

Nonetheless, the Milken Institute report said Silicon Valley's start-up culture has given it an "unmatched ability to spawn entrepreneurial firms." The region employs some 244,000 people and accounts for 5.7% share of North American wages. And according to National Venture Capital Association data, nearly $11 billion of more than $28 billion in venture capital invested this year has gone to Silicon Valley firms..

However, the Milken study also found several other regions house significant numbers of technology workers, including midwestern firms where wages are lower than on the west and east coasts. For example, the Milken reported that said Minneapolis area has 131,000 technology workers, Houston has 151,000 and Wichita about 50,000. Such numbers could put pressure on Silicon Valley.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags silicon valley

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Patrick Thibodeau

Computerworld
Show Comments

Cool Tech

Toys for Boys

Skywatcher Dobsonian 8″ Collapsible Telescope

Learn more >

Family Friendly

Whodunnit™ Duo-Scope MFL-007 Microscope Kit

Learn more >

Stocking Stuffer

Logitech Ultimate Ears Wonderboom 2 Bluetooth Speaker

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?