The reports of my death are greatly exaggerated
“The reports of my death are greatly exaggerated” – a cartoon that illustrates the staying power of Silicon Valley for new technology companies.
The headline statistics would seem to show Silicon Valley is a dire place to start a business with California ranked worst among all 50 states for doing business and 53% of voters saying that they are likely to move out of the San Francisco Bay Area in the next few years.
However, Silicon Valley still draws in the largest amount of venture capital, in Q3’22 alone the region attracted $11Bn of capital, which was more than double the combined totals of the next two hubs in the US (New York City and LA) and 3x more than the European tech hub of London.
The next generation of industries is being led by companies based in Silicon Valley, whether in software or hardware.
For example, in Quantum computing the last couple of years have seen over $1Bn in funding to local companies like PsiQuantum and Sandbox AQ. UC Berkeley economist Enrico Moretti, noted that inventors who move to a city with a large cluster of inventors in the same field experience “a sizable increase in the number and quality of patents produced.”
The allure of living and working in such a cluster seems to outweigh the downsides of high living costs, taxes and congestion.
