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“
Silicon
Valley
is the only city in the world that doesn’t aspire to be
Silicon
Valley
”.
This is a phrase repeated often when one hears of yet another
country’s aspirations to bolster their IT based industries by creating
an IT park/High-Tech Cluster/Zone of Innovation, or whatever they choose
to call it. Every
government dreams of having an engine of economic growth similar to
Bangalore, which is growing at an annual rate of 10% and will surpass
Bombay as India’s wealthiest city by 2010, starting today with the
activity of 25,000 engineers who will grow to over 100,000 and will
generate over $15 Billion in GDP (BusinessWeek,
November 11, 2025).
On
the other hand, you have laid-back
Northern California
– or so it appears
to be. Not even conscious about it, the City by the Bay just happens to
be the IT City, in both senses of the word “IT”. Cutting to the
bottom line, I would like to provoke discussion by saying that it is so,
mainly because it is just such a cool place to live and work. So many
people, including engineers and the highest density of Nobel Laureates,
love the place and make it their home.
With these people and a confluence of many other also important
parameters, the San Francisco-San Jose Bay Area has become
Silicon Valley
and the IT center of
the world.
Even
companies from around the world like Ericsson, Nokia, or Sony choose to
set up important R&D centers in
Silicon Valley
. Why? Because they
know that they can’t be left out when new technologies might arise
from Stanford,
Berkeley
or other labs in the
area, such as when lead engineers leave a Cisco to form a new start-up.
Annalee
Saxenian, a renowned author on the
Silicon Valley
phenomena, gives a
very succinct definition of a (High-Tech) Industrial Cluster:
“A regional network-based industrial system that promotes
collective learning and flexible adjustment to changed conditions among
specialist producers of complex, related technologies.”
She has also stated that the institutional and cultural
underpinnings of a successful cluster are:
a)
supportive social structures –
particularly entrepreneurship and social & professional networks
b)
institutions – educational
institutions and their links with business, business associations, fora
for the exchange of information, standards’ committees and the
structure and organization of business enterprises
c)
collaborative practices – large
scope of informal exchange of information and experience, and formal
collaborative arrangements such as cross licenses, second sourcing,
technological agreements and joint ventures.
While
we can dwell on various aspects of her definition, I would like to
emphasize how GEOGRAPHIC PROXIMITY TO TECHNOPRENEURS is common to all
her points above and a key take away lesson for us in the
Philippines
especially since it
will make or break the culture of collective learning.
Allow
me to give a few examples of how the hyper-driven technopreneurs
in
Silicon Valley
live day-to-day.
In the morning, Ms. PhD drives her Audi TT convertible 20 minutes
along highway 280 to her start-up’s offices.
They are office suites that are specifically meant for small
start-ups and they once housed Netscape and Rambus.
She meets with her other 3 fellow founders, all PhD’s save for
the lone MBA. They were classmates at either Stanford or at IIT (
India
). Then she visits the
labs to check on the progress of Wizbang1 under the supervision of some
Chinese and Russian immigrant engineers.
She crosses the street and looks in on the Vietnamese and
Filipino workers in her assembly sub-contractor. At this point, she
takes a minute’s rest as she fondly remembers that handsome Filipino
PhD she met many years ago and wonders why there are not many more of
him in the upper levels of engineering (No! that wasn’t me?!). For her
working lunch, she goes with her MBA CEO to
Sandhill
Road
about 20
minutes
away and makes a pitch to a potential VC for her second round.
Sitting with them is their first round VC whose offices are next
door. After promising
Potential VC that she will present more details to his technical adviser
at SUN Microsystems (10 minutes away), she zooms to a Café near
Stanford
University
to meet a potential
recruit for VP of Marketing. The candidate drives over in 25 minutes
from his present job at Cisco. Later
on, she drives an hour away to UC Berkeley to listen to a Ph.D. thesis
defense by one of the star students in the communications space.
There might be something in the thesis that can be commercialized
in her product. After the talk, she dines with her Investment Banker
boyfriend and complains about competition in the talk because she saw
her colleagues from
Berkeley
were also in the room
together with other VC’s from a rival group. There were also people
from Cisco, Nortel, Juniper, and many other companies hovering around
that room. Her boyfriend
tells her not too worry because the buzz around town is that the IEEE
standards committee seems likely to vote on a standard proposed by her
group. They have some
champagne then head over to
San Francisco
in an hour to watch
John Mayer perform live at the W. At
the concert, she bumps into the founder of Gudha2 who offers to license
his software to her. The next day, she joins her top engineers for an
off-site planning session in a beautiful hotel by the
Pacific Ocean
, 40 minutes away.
They’ve invited her neighbor Steve Jobs to give them a pep talk on how
to beat the big established players.
On Sunday, she flies to
Taiwan
for two days of
emergency meetings with TSMC who are having a problem with the yields on
their chips. If she is lucky, she can wrap up the meeting in a day and
be back Tuesday night. If not she won’t be able to personally deliver
her company presentation to ChaseStanley’s
Technology Conference in
San Francisco
on Wednesday
afternoon.
Sounds
like fiction? Not quite. That is exactly how things work in the valley.
That is how companies are started in so short a time and how they create
successful products with a amazing mix of
novel technologies fresh out of the labs. That is
why ambitious engineers who want to really make it and create something
that can affect the world, brave the very expensive living
standards of the Valley and chose to move their careers and families to
the Bay Area.
Now
how do you compete with that and with other regional IT clusters started
around the world? The KEY in my opinion is building a
mini-Silicon
Valley
that can in some way,
entice the IT players of the
Philippines
and imported from
abroad to work together in one or two places. Why one place? For
various reasons. Probably, most important,
because we don’t have enough financial and human resources to support
more. Secondly,
“one place” means that people will gather around this place and make
it THE gathering point where all the human interactions exemplified above
are enabled to happen. It is also a magnet for our balikbayan
imports and foreign partners. As
it is today, industry or the SEIPI companies are in CALABARZON and
have to think more than twice whether or not to make a 2-3 hour
trip to consult with their genius friends in Diliman.
The software guys in Libis hardly know any
hardware guys. They date the pretty call center girls! The VC’s are in
Makati
and they hang out
with the jobless stock brokers. The
telco providers and banks are in
Makati
or Ortigas,
at least an hour away from the others and oblivious to the fact that we
have engineers that can program or even build their boxes. Government is
in another world, Malacanang,
Manila
.
Sad
to say, even if the technologies of the telephone and video-conferencing
will help us bridge the distance, more often that not, physical
proximity and presence is needed to encourage interaction and to make it
a more meaningful and
productive one. Since, our
road and traffic control infrastructure is over-stretched and it will
take awhile for our government to solve this. We technopreneurs
have to band together and decide on a place where we can all work and
live within 30 minutes of each other and going to meetings will take up
less than 30 minutes. Ideally, we can walk to them! If we are enough who
agree, if companies and careers are staked on this, and if we provide
the specs to the developers, than it is certain that they will be
willing to develop such a mini-city for technopreneurs.
We will be the anchor tenants for this
mini-Silicon
Valley
.
Finally as an anchor to this anchor and as a enticement for technopreneurs
to band together, in the past year and a half, I have joined a
wonderfully patriotic and enlightened group of engineers and IT
professionals in pushing for the creation of a Center for Computing and
Communications, which will be the educational, training and RD&E
institution that can anchor such a cluster of engineers, companies, and
investors.
____________________________________________________________________________
About
the Author : Paco Sandejas
completed his BS Applied Physics degree at the UP National Institute of
Physics, and his PhD (specializing in MEMS fabrication) from Stanford
University. He was formerly connected with Applied Materials, Hambrecht
& Quist
and was also a co-founder of the Brain Gain Network. Paco
now runs his own venture capital firm, NarraVC.
He is married and has two kids.
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