The Real Crisis of Silicon Valley: A Retrospective Perspective

Abstract

Ten years ago, Silicon Valley was the leading pole in the world of high technology development and was headed for a potential regional crisis. Two major issues were at stake: first, “the applications gap,” the need to diffuse technological applications throughout society, beyond the limits of corporate uses and military equipment, to match the extraordinary development of technological innovation; and second, the lack of social conditions for Silicon Valley's entrepreneurs to constitute themselves into a visionary class able to restructure society around its interests, coinciding with the interests of development of such a technological innovation. The industry had to become demand-driven, rather that supply-induced.

Today, the Valley has rebounded and repositioned itself, without fulfilling the conditions of this “social” model. Uses of information technology exploded in all realms, along the lines of networking activities. But how to explain this phenomenon? The answer lies in the research and theorization that Richard Gordon conducted during the last decade of his life. Silicon Valley was, and is, a milieu of innovation. It was, and is, also a network of firms and entrepreneurs. But it is something else — in Richard Gordon's words, the collaborative partnerships that linked up the regional production system and the extra-regional environment in a context of global exchanges. Gordon's theory of Silicon Valley is the missing link without which various interpretations of this most important case of regional development are only partial.