The Dangerous Folly of Regional Technology Centers

David Brooks just wrote in the New York Times an interesting op-ed about his "magic green jacket" and the current political situation facing Democrats and President Obama. One of the suggestions he mentioned in the penultimate paragraph is to create "a new wave of regional innovation clusters" that would presumably pull the economy out of the recession and renew the lease on the middle class lifestyle.

While a minor part of the overall piece, I am constantly surprised at the hubris that of those who think that innovation is something that can be legislated. Silicon Valley remains the premier research region in the United States and arguably the world. Thousands of new immigrants flock to the region every year, and thousands of new businesses and start-ups begin (and end) in the never-ending tumult of Silicon Valley's fast-paced ecosystem.

Surprisingly, the region has retained its lead in research despite competition from several other regions, some with incredibly strong backing from the government. These regions include the Route 128 corridor in Massachusetts, the Research Triangle in North Carolina and the Baltimore/Washington D.C. corridor. While the approaches have been both centralized and decentralized, no area in the country has yet arrived at the formula to duplicate Silicon Valley's success.

Analysts often point to the first-mover problem. Silicon Valley has been at the forefront of technology for so long that people with ideas come to the region to bring them to fruition. A notable recent example is Mark Zuckerberg, who created Facebook in his Harvard dormitory before moving it to Palo Alto to launch the company's growth.

However, that does not explain the region's monopoly on the high-tech sector. Costs in the region for both workers and businesses are some of the highest in the country. Secondly, the valley certainly does not have a monopoly on engineers and scientists - Boston and the other regions have their own deep bench of talent throughout the technical disciplines. Thirdly, venture capitalists, supposedly the critical ingredient to the valley's success, have been spreading out throughout the country looking for the best investments. This is the era of globalization, and funding is not immune to its effects.

There are certain characteristics that the Bay Area holds over other regions: the weather, the legacy and history of technology development, an excellent and multilayered university system. However in my mind, these ingredients just are not the magic that keeps Silicon Valley ahead of the pack.

What that secret is remains elusive. Therefore, policymakers should be a little more hesitant in their predictions for new science regions. The media should as well: CNN recently reported that the Midwest could become the new regional research hub (with the title "Silicon Prairie"). I love the Midwest, but I am not holding my breath anymore than I would with any of these other regions.

Obviously, David Brooks wrote only a handful of words on this topic (seven, in fact), but his recommendation must be tempered with the past history of building these regions. They are harder to construct than policymakers like to admit.


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