Every so often, somebody writes that Silicon Valley is dead. No, they’re not just over-the-top headlines searching for eyeballs. You’d be amazed at how many people really believe it when they come up with this stuff.
The one thing all those stories have in common is a single thread of evidence that something important is going bye-bye.
Whether it’s the start-up culture, the risk-taking, the venture capital, the IPOs, or even a market segment like hardware, something’s always going away. More than one person called Facebook’s disastrous IPO the end of Silicon Valley. That may have actually been the most plausible concept yet.
Whatever the reason, someone is always predicting gloom and doom for the Santa Clara Valley’s high-tech mecca. The thing is, it’s all a bunch of nonsense, so I’ve decided to put an end to all the silly speculation once and for all.
Not only is Silicon Valley’s innovation intact, its venture funding fruitful, and its risk-taking culture as crazy as ever, it’s still the world’s leading engine for high-tech startups. And it hasn’t lost one iota of its mojo. Not a single one. And here’s the proof:
Four of the top 10 most powerful global brands -- Apple (AAPL), Google (GOOG), Intel (INTC), and Cisco (CSCO) -- and six of the top 10 global technology brands -- the same four plus Oracle (ORCL) and HP(HPQ) -- are Silicon Valley companies.
In terms of market capitalization, five of the top 10 global technology companies traded on U.S. exchanges are Apple, Google, Oracle, Cisco and Intel. That amounts to over $1.1 trillion in market cap, all headquartered within a 10-mile radius circle.
In 2012, 37% of all the venture capital in the United States came from Silicon Valley, compared with just 28% in 2000, the heyday of the Internet boom.
Silicon Valley’s share of all U.S. patent registrations has grown from 3.6% in 1990 to 9.1% in 2001 to a record 12.5% in 2011.
Although the number of IPOs is well off its peak during the Internet bubble, Silicon Valley accounted for 13% of all U.S. Initial Public Offerings in 2012, including those by international registrants.
Anecdotally speaking, Silicon Valley is certainly an innovative center for some of the hottest and fastest growing technology industries like mobile computing, cloud computing, big data, biotech, software, and of course, social media. After all, Facebook, LinkedIn, and Twitter are all based in the San Francisco Bay Area.
Besides the critical mass of high-tech companies, the reason why Silicon Valley continues to be the focal point for technology innovation and startup activity is a unique combination of several factors:
The close proximity of universities like Stanford and UC Berkeley; the highest concentration of high-tech workers of any metropolitan area; the number of storied research facilities like Xerox PARC and SRI International; plenty of stellar law firms; and of course, the street that’s become synonymous with venture capital, Sand Hill Road in Menlo Park.
For those reasons among many others, the reports of Silicon Valley’s death have been, and probably always will be, greatly exaggerated.
Steve Tobak is a Silicon Valley-based strategy consultant and former senior executive of the technology industry.