Silicon Valley Revisited

A year is a long time in Silicon Valley where today's discoveries in technology render obsolete yesterday's wonders, new business models create stock market sensations or disasters, companies rise and crumble, and millions are made or lost if not in a click, then in a week.

A year is a short time, however, for someone like me untutored in the IITs or the IIMs to truly understand all this. But it is perhaps sufficient to gain some insights. I have no claim to write today on 'Making sense of Silicon Valley', but I hope that frequent visits, many encounters, and professional requirements have made me if not wise, at least less silly. Hence this 'revisit' to decode the current happenings in the Silicon valley, the high technology centre of the world, made doubly interesting for us because of the significant Indian connection.

Yes, one thing is still true from my old article, the Indian connection. Names of Bangalore and increasingly Hyderabad, Chennai and Gurgaon have become if not household at least 'corporatehold' words in the Silicon Valley, just as in the myriad call centers, IT parks and R&D units that now dot the Indian landscape, the names of the local shrines here -- Intel, Google, Sun, and Cisco -- are constantly invoked. Not only the symbiotic link, as the management jargon has it, but there is a growing perception that it is useful to factor India while weighing the future options and opportunities in many areas of high-technology.

One of the interesting questions is: What makes Silicon Valley what it is, a frontier locale for high technologies? The technologies being hatched and nurtured today cover not only IT but increasingly Bio, Nano, Web, and Communications. How did this particular landscape develop as a 'habitat' for technological innovation and creativity? I have been asking pundits.

Experts explain that it is a combination of some distinctive features. First, the contribution of Stanford University in this process has been seminal. Stanford is one of the most prestigious, affluent and influential universities in the world but a special characteristic is its close link with industry from the very beginning.

From the classroom to the laboratory to a nearby garage, to a manufacturing unit and finally to the market -- this is a story of quite a few technology celebrities such as Steve Jobs of Apple.

There is a web of relationships and a pattern of progression that has been special. Thus, from the sixties many ideas, be it in semiconductors, or chip design or the Internet have come from work in and around the classrooms or labs near Stanford and there has been an intimate give and take between the brilliant, but practical minded dons, and the entrepreneurs and the Corporations in the immediate vicinity.

The second aspect is that historically some major industry leaders such as Hewlett Packard and Apple came to be located in these parts in the sixties which acted as a magnet for scores of others to come in over the decades from Intel to Google. In fact, the major exceptions were IBM and Micro Soft, but hundreds of smaller companies were started in this area giving it a critical mass which peaked in the late nineties.

This in turn has created an environment of support systems -- of patent lawyers, marketing whiz kids and above all venture capitalists, a special tribe who can spot a trend or an opportunity in a mere idea and take risks in funding them at an early stage so that it can be concretized as a viable project. All this in a micro cosmos in which young people with big dreams are brimming with ideas, energy and an appetite for risk taking.

The last, namely the aptitude for risk taking, for accepting failures, for falling down and yet starting again, in some ways symbolises the spirit of the Valley. A specific manifestation of this attitude is that from the very beginning many companies attracted talented young recruits not with hefty salaries, but with stock options: they had a direct stake in the success or failure of the company.

I find it interesting that some of these features are mirrored in Bangalore too. The beginnings with the Indian Institute of Science, early locating of factories like HAL and BEL, the growth in the engineering colleges, some of them privately funded, the evolution of a company like Infosys with stock offers to employees. It would seem that the missing elements are the close linkages between university research and the industry.

The Silicon Valley habitat has had its ups and downs, no doubt. The history of this whole place and phenomenon is not more than forty years. The sixties and seventies saw the beginnings of the semi conductor industry and the evolution of the integrated circuits. The eighties saw the emphasis shift to Personal Computers from mainframes and accessibility and computer penetration going up dramatically. From the nineties, the Internet dominated the domain with myriad internet enabled services springing up and changing our lives forever.

The late nineties saw this reach a fever pitch and the so called dot.com hysteria. Every one had a brilliant idea on how the internet will change the way we do business. Young kids fresh out of colleges dreamt of billions and were given millions by the venture capitalists. For every success story such as Hotmail or Amazon.com, there were a hundred others with big promises but no matching performance. The resulting overheated and artificial bubble ended in the infamous dotcom bust by 2001. The shake up ended with billions of paper money lost and many dreams shattered.

There is an illustrative joke from these times:

"How do you become a millionaire in Silicon Valley?" some one asked a rich financier.

"Start with a Billion," was the answer.

That shake-up or melt-down is over, I am told. If so, what does the future look like?

Valley watchers and geek gawkers, of which there are many here, believe we are now witnessing a steadier phase of technology innovation, what is sometimes called Silicon Valley 2.0, to denote the more advanced avatar compared to the 1.0 version of the nineties. Some of the newer fads and fashions are in these areas:

Search: First Yahoo and then Google expanded the horizons of Search. There is no question that Google has revolutionised the way we seek information, the way knowledge is now organized and retrieved, be it on the meaning of Life or an evening filled with spice. The race is on, not only for speed of access to tons of information, but for precision in terms of response.

Mobility and miniaturisation: Whatever was done on a mainframe computer -- remember the days of huge rooms with a humming sound -- was later done on a personal computer on a desk top. It is now being done on a mobile phone, as the phone increasingly enables you to e-mail, act as a credit card and as your link to every other appliance. With the amazing success of I-pod by Apple, an object of desire for millions, size has ceased to matter or better still 'the smaller the more beautiful'.

Infotainment: A clear trend between the blurring of lines between information and entertainment is visible. Educational or informational tools amuse and amusement vehicles educate. The functions of a television or the PC or the mobile become interchangeable depending on the locale or the size.

It is nice to hear that in all these areas as the global giants try to compete and bring down their costs, they find an Indian connection helpful. It can be in research and development, or design or plain talent recruitment. As the race accelerates and becomes more cost-competitive, not only the outsourcing or off-shoring, but partnering with India becomes attractive.

As Silicon Valley changes and becomes known as the innovation valley -- silicon itself no longer being a critical ingredient -- one hopes that our own changes keep pace too. Calling my city Bengalooru instead of Bangalore is not the only change that I have in mind.

Illustration: Uttam Ghosh

B S Prakash is India's Consul General in San Francisco and can be reached at cg@cgisf.org