Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

Bashing Silicon Valley Sells Magazines And Books

Posted by Tom Foremski - June 19, 2013

Here's Andrew Keen's synopsis on the latest from George Packer, a former New York Times journalist:

… there appears to be more and more criticism of Big Tech from mainstream, heavyweight American journalists like Nicholas Thompson and Paul Krugman. And leading the charge in this Silicon Valley bashing is the New Yorker staff writer and award-winning author George Packer.

In both his new book, The Unwinding, and particularly in his recent New Yorker story “Change The World”, Packer warns that the love affair is over and Silicon Valley has lost its resonance with the rest of America… the “massive wealth” in Mountain View and the rest of Silicon Valley makes it “as far from North Carolina as Burma."

Keen On… Silicon Valley: How We Need To Scale Down Our Self-Regard And Grow Up | TechCrunch

Andrew Keen interviews Mr. Packer over Skype, calling it an irony, which it isn't, because Skype is not a Silicon Valley invention. The irony is Mr. Keen thrust into the unusual position of listening to someone else critique technology and Silicon Valley's role -- it's been a profitable niche of his own for many years.

It's easy to poke fun at Silicon Valley and complain that it is a culture invented by, and for, 20 year olds with way too much money, as Mr. Packer has claimed. And that Silicon Valley companies aren't changing the world and should stop saying it.

It's nonsense. Silicon Valley's monied technology elite have more in common with a 60 year old than a 20 year old. The founders of Google are 40 this year, Twitter's Jack Dorsey is not far behind, and the majority of the other movers and shakers are much older.

The culture of Silicon Valley is not set by 20 year olds, or even 25 year olds. These "millennials" are at the bottom rungs of the ladder. This generation is serious, hard working and is paid very little. Don't blame them for the culture of Silicon Valley, which Mr. Packer says needs to "grow up."

Silicon Valley doesn't need to connect with North Carolina or anywhere else. There is no Silicon Valley philosophy or credo, or common purpose.

If Silicon Valley cared about how it is seen by others then we would have seen it by now.

We would have thriving local communities, our public schools would be educational marvels, all as a direct result of having such amazing companies and visionary technologists in our midst.

The Bay Area would be a modern Potemkin village, gigabits with everything, a showcase of all the good things that our revolutionary technologies bring to the world.

"This is the future and this is how we live in it" -- would be our motto. But we don't have anything like that despite having all these amazing companies and visionaries living among us. We don't have an identity of "Silicon Valley" and we don't have much interaction between companies and the communities.

There's very little visible benefit in the quality of life that's due to living in "Silicon Valley" and its amazing companies and genius entrepreneurs. Amazing companies such as Twitter, behave incredibly badly, holding San Francisco hostage with threats to move away unless it receive multi-year tax concessions; our public schools are basket cases and are failing badly and receive very little attention from local tech comapnies; and our cities struggle with the mundane daily problems of chop wood, carry water, without much care or interest from the local tech scene.

A better critique of tech company claims of globe-changing influence would be to contrast their talk with how they walk. What benefit does a community get from having great tech companies when, like Twitter, they demand special terms, which is lost revenues and lost services to the poorest in the city. Critics should point out their hypocrisy, that the poster boys of new media would rather be a burden to their neighbors than to ease the burden of others.

Myopic visionaries…

Like New York City, Washington DC and countless other large metropolitan areas, people here don't notice much beyond the horizon of their daily commute. But, unlike those other self-centered metropolitan areas, there is no cultural identity with Silicon Valley -- it simply doesn't exist when you live here.

Silicon Valley only exists for outsiders, which means that any critiques of Silicon Valley are for a non-Silicon Valley audience. No one here takes responsibility for "Silicon Valley."

Don't aim too high…

Mr. Packer says that our startups should have more modest goals. But why? Yes, 99.9% will fail but so what? We specialize in failure because that's how we refine success. It's pointless to point at failed startups as an example of how we are doing it wrong and drinking our own kool-aid. It's how this sausage is made.

What's wrong with trying to change the world?

My criticism of the startup scene isn't that ambitions are too high, it's that young companies rarely grow large enough to make a difference. Startups are sold as quickly as possible to large corporations and their business is shuttered.

The startup boom is really nothing more than a giant corporate jobs fair where the young teams' dreams of changing the world are cynically dumped by their investors, whose aim was always to sell them. The angel investors get an immediate payoff on small amounts of capital but the teams have to work four years for their payouts, as if they were indentured servants to the big corporations.

Dupe and dump -- duped into thinking they were doing something important, then dumped into a cubicle at Mega Corp for four years. There's not much glory in that scenario.

Creating new jobs

Another fallacy outsiders have about Silicon Valley is that it can jump start the economy, that it can create new jobs for the unemployed. It's why there's so much interest from foreign governments to try and build local innovation centers.

The reality is that Silicon Valley companies specialize in disrupting industries. Their technologies are designed to massively reduce the costs of business processes — usually by at least a factor of ten. These are labor saving technologies.

Silicon Valley companies have indeed helped to create millions of jobs, but that's because those new jobs eliminate the need for hundreds of millions of jobs elsewhere. If Silicon Valley technologies resulted in requiring a larger workforce there would be no buyers, no markets.

Governments should not look to Silicon Valley for a solution to unemployment. It's a serious misunderstanding of the role of technology and innovation.

And as for Mr. Packer and the rest of the finger-waggling multitudes: It's easy to criticize Silicon Valley but it's a meaningless exercise. It assumes someone will feel shamed, or fired up to defend its reputation, or even to notice.

Silicon Valley exists only as an invention of the media, it was coined in 1974 by a columnist for Electronic News, a trade newspaper covering the nascent chip industry growing among the orchards of Sunnyvale.

But it would be a very good thing if Silicon Valley existed as a real community, uniting its multi-county populations into one very cool place to live, a modern city state whose wealth is built from creating new types of businesses and transforming others. I

f Silicon Valley existed as a shared identity it could then address it critics, it could try to change problems into solutions, which it does quite well.

It could promote "Silicon Valley" as Las Vegas promotes its business community. It could create a fantasy future in the same way Las Vegas creates fantasy locations. Both places deal in gilded dreams, they create winners and losers.

But there's a big difference between Silicon Valley and Las Vegas. If you lose your shirt in Las Vegas you have to leave town. In Silicon Valley, you get to play again, and use other people's money.

Nothing there

Many visitors are disappointed that there is no Silicon Valley to see, there's not even a road sign.

All that they see is a large business park set between two great unversities. Its thousands of tiny companies are mostly unaware of anything much beyond their niche. Their disconnect isn't just with North Carolina but also with the communities around them.

I sometimes label articles "CultureWatch" and review local events pointing out that all businesses are cultural artifacts and that startups need to be participants in their communities, they need to get out more. But they don't.

The importance of urban centers…

We're moving into a post-technology world where it's what you do with the technology that matters. Silicon Valley companies have been great at developing the platforms, the infrastructure, and the tools to manipulate powerful technologies. Now its how you connect it all up that counts.

Innovation will increasingly emerge from dense urban centers because that's where its needed. It's where the creativity will come from, from being totally and constantly immersed in an always-on, always changing environment.

The typical Silicon Valley startup is isolated in a drab office park, and out of touch with the rest of the world and what it needs. No amount of A/B testing will help.

New businesses will emerge from where people live and engage with each other in large numbers. You can see that in the increasing numbers of startups rolling out of New York, London, Paris, and Berlin.

Predicting the future of technology is easy compared with figuring out how we will live in that future. Those answers won't come from here.

Silicon Valley's influence on the future of society will be far less than its critics assume today.

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