The New Argonauts of Silicon Valley

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Andrew Keen is PoliticsCentral’s podcasting source for the present and future convergence of media, culture and technology.

You can find his previous podcasts @ AfterTV and his collected writings @ The Great Seduction.

TRANSCRIPT:

Narrator:  This is a Pajamas Media Politics Central presentation. Welcome to After TV with your host, Andrew Keen. Today on After TV, a show that maps out the future of media through interviews with the visionaries of today, Andrew speaks with AnnaLee Saxenian, Dean of the UC Berkeley School of Information and the author of The New Argonauts.

Andrew Keen:  Welcome to After TV, the show about technology, media, and culture. Today we’re back on the campus at the University of California at Berkeley and very fortunate to be talking with AnnaLee Saxenian who is the Dean of the UC Berkeley School of Information. She’s the author of a book called Regional Advantage, Culture, and Competition and Silicon Valley and Route 128, as well as a recently published fascinating sounding new book called The New Argonauts: Regional Advantage in a Global Economy. AnnaLee thanks so much for appearing on After TV.

AnnaLee Saxenian:  My pleasure.

Andrew Keen:  So you’re a—you’re someone who studies geography, culture, technology; one of the areas that particularly interests me about your scholarly expertise is Silicon Valley and especially given that’s where we—that’s where we are or at least on the edge of it—UC Berkeley. How would you explain both its historical roots and its reasons for success?

AnnaLee Saxenian:  Well it’s an excellent question and I spent a lot of time thinking about that about 10 years ago when I wrote my first book. And in a nutshell I think the advantage that Silicon Valley had was that it was not industrialized at the same time as the rest of the country was—that it remained sort of a Tabula Raza until the post-War period when people—engineers were pulled to the West Coast for World War II first and then for post-War spending on engineering on research related to technology. As the region pulled in people they were often young engineers who didn’t know how companies worked or how business was to be done, and they created in this Valley a very different business model than you found in other parts of the US and I like to compare it to the Route 128 area—

Andrew Keen:  In Boston?

AnnaLee Saxenian:  —around Boston, which had you know—they had the same features—great world-class universities, venture capital, lots of government funding for R&D, military and non-military; you know a huge supply of engineers. So on the face of it they should be very comparable. But Silicon Valley is sort of—starting in the ‘60s and ‘70s became much more dynamic, innovative—fast-moving than the Boston area. And what I argue is that the Silicon Valley pioneers really created a system where information flows much more openly between firms and where firms can recombine; you can put together kinds of people in technology much more quickly in response to changing markets. And so it became a much more open, decentralized system and compared to the Boston area where a small number of very big integrated corporations dominated the technology world, DEC, Digital Equipment Corporation, Data General, Wang—were very isolated, big hierarchies that had nothing to do with one another or the regional economy. So they repeatedly fell behind in technology and markets whereas the open flows of information, the ability to start new companies very quickly and learn from one another in Silicon Valley became this source of advantage.

Andrew Keen:  Well was there a cultural dimension?

AnnaLee Saxenian:  There was a cultural dimension. If you take culture as a very local phenomenon that’s created by a set of local conditions and local institutions—sometimes when we talk about culture people think Japanese culture, American culture—but within Silicon Valley the culture was one where it was okay to take risks; in fact it was really glorified to start a company and people knew about it, there was a culture of sharing stock options with work forces of much flatter hierarchies within the firm, so that people in the firms became much more invested in the success of the firm than they were in the old hierarchies—yes; a very, very distinct cultural difference.

Andrew Keen:  Could you just give us a very brief historical outline for our listeners who are not familiar with the history of Silicon Valley? When was it founded?

AnnaLee Saxenian:  [Laughs]

Andrew Keen:  And I mean who gave it its name?

AnnaLee Saxenian:  Well that’s a good point to start; you know founding it—it’s been around for a long time but it was Santa Clara Valley, which was the world center of apricot and prune exports.

Andrew Keen:  Right.

AnnaLee Saxenian:  For many decades.

Andrew Keen:  And that’s sort of geographically—that’s what between San Jose and San Francisco, the Peninsula—?

AnnaLee Saxenian:  Absolutely; that is exactly where it is and it was a very fertile valley up through the ‘60s really; you still found—and ‘70s—orchards. Its origins come from Stanford University which was a sleepy university town until the post-War period and then the location of several military contractors in the post-War period. In 1970, Don Heffler, a journalist coined the term Silicon Valley because you saw a small group of semi-conductor related firms in the area, the most famous came out of Fairchild’s Semi-Conductor, a guy named Shockley who was a notoriously bad manager and he had recruited terrific engineers from the East Coast and the Midwest. They were so unhappy with his management that they left and started their own companies and you created the lure of the Valley which was a lure of starting your own firm, leaving—it’s okay to leave, it’s okay to experiment, and a lot of the very successful companies—Intel and some of the venture capital firms were spin-outs of that original firm. And today you can actually look at genealogies of Silicon Valley that reflect this continuing fragmentation process where people leave to try out new ideas that weren’t taken up in their firms and you splinter and—. So essentially back to the history, the—after the semi-conductor industry took off in the ‘70s you saw a wave of personal computer investments; essentially the chip was—and the micro-processor was invented. It got embedded into personal computers. And then you saw a wave of software development—Oracle and companies like that and then finally you see the development of the internet and the takeoff of the internet in the ‘90s and then of course we’ve just come through this fantastic boom and bust period. And now I think we’re emerging out of that.

Andrew Keen:  What if anything was the role of the counter-culture in the formation of the Valley? I know that the New York Times journalist John Markoff in which he sort of connected up the invention of the PC and the rock-n-roll and drug counter-cultures being all part of the same socio-cultural phenomenon.

AnnaLee Saxenian:  I am sure that the ‘60s did influence the culture of Silicon Valley. I would say that the idea of open-sharing, of getting away from profit-making corporate greed of having—of eliminating hierarchy really was very pervasive at the time. I think Steve Jobs who started Apple was part of this community that would get together, the [home-brew] computer club that would get together and share ideas much more freely than you would ever find in corporate America at the time. So this idea of we’re in this together; this is our region; we’re committed to the region and the technology—not to any individual corporate entity and the idea that information should be free somehow had roots in the counter-culture.

Andrew Keen:  And what about the specific role of California and the pioneer libertarian foundation of culture here?

AnnaLee Saxenian:  Well a lot of people have suggested that connection and I think there is something to that; you know you get the Gold Rush here, you get the waves of people who are leaving the old world, leaving the East Coast, leaving the—either the financial center or the manufacturing center of the US to try something new and I think you see this in the publishing industry which is very different than publishing in the East. You see it in Hollywood for sure; so I think there’s a lot to it. This book by Rebecca Solnit is about the founding of the West; she traces this Eadweard Muybridge, who is an early photographer, so I think California influenced it in a very important way.

Andrew Keen:  So we have the counter-culture, we have California, we have a number of obviously relatively unique circumstances; given all that how easy or difficult is it to replicate the Silicon Valley experience—because I know that that’s really your expertise?

AnnaLee Saxenian:  I don’t believe it’s possible to replicate it. I—regions around the world have been trying it for decades. They set up science parks, they fund venture capital industries, they create centers of excellence; none of it has created another Silicon Valley. I think that’s a one-time phenomenon. It’s a particular historical moment as you’ve so clearly argued or suggested. What you can do however is connect to Silicon Valley and create you know linked centers of technology that have similar institutions and maybe draw upon some of the culture of Silicon Valley and that’s really what my—The New Argonauts looks at is the way that large numbers of immigrants came to Silicon Valley, worked in it, you know marinated in the Silicon Valley environment and then took that model back home with them. It doesn’t mean those places are new Silicon Valleys but it is—there are institutional similarities, cultural similarities and even direct connections between Silicon Valley in those new regions.

Andrew Keen:  Before we talk specifically about The New Argonauts, I’d like you to place the Silicon Valley achievement in a broader historical context in terms of 20th or late 20th Century American economic and innovation history.

AnnaLee Saxenian:  Well Silicon Valley was the source of the—sort of series of innovations that started with the transistor and went to the semi-conductor and the micro-processor that are now transforming every industry and I think institution on the planet. And this is a huge claim but I think it really is the source of what some people have called a fourth industrial revolution. It is as important as some of the path-breaking inventions in earlier centuries in the sense that this information technology is now diffusing everywhere. I see it here; it’s eliminating librarians and libraries and creating new ways of sharing information online as it has created internet related technology and information sharing. We see it transforming auto-making, steel-making—every industry that we know about is now sort of being changed.

Andrew Keen:  Even medicine?

AnnaLee Saxenian:  Medicine especially, yeah, yeah, and government; government is being transformed. Some of these things happen—have happened already; some of them are more slow, but I think you know as historians look back 100 years from now they’re going to see this as a complete transformation in the way—even really just the blogging revolution you know. People are blogging, I read this morning, people are blogging between Lebanon and Israel in the midst of a war; that’s a huge transformation and it’s facilitated by the technology developed in Silicon Valley.

Andrew Keen:  So you really see Silicon Valley as—as changing the world?

AnnaLee Saxenian:  Yeah; it’s a big claim but I think that the technologies that were developed here will be trans—hugely transformative.

Andrew Keen:  And I know this is not a fair question but I’ll still ask it. Would all this have happened without Silicon Valley?

AnnaLee Saxenian:  I’m not sure it would have. If you look at the trajectory of technological development in other parts of the world where they had the semi-conductor—for example if you look at Europe, the UK had the same technology, certainly had the skill base, had the resources, and yet they were not able to push the technology in the ways and open up the technology. The thing that’s distinctive about Silicon Valley is that it goes through continuous cycles of innovation, so you see one wave of innovation peter out but then a new wave starts. So it’s been a very cyclical—this last cycle has been the most dramatic, but it has opened up innovation in a way that the old models did not open it up.

Andrew Keen:  What—for our listeners who are interested in the history or today’s reality on Silicon Valley apart from your own books what do you think are the best introductions to it—either sort of historical or anecdotal or brings it to life?

AnnaLee Saxenian:  There’s a new book, an edited volume coming out of Stanford University Press called The Silicon Valley Edge that has a lot of current essays about—it’s very—it’s social science(y) but accessible. I think there—the journalistic accounts are much better at bringing it to life. One of the old ones, The Big Score by Michael Malone; it’s an old one—. There’s nothing—you know there’s nothing recent that documents the ‘90s. A lot of these things documented the ‘70s and ‘80s but there’s nothing that documents the ‘90s in a really rich way, yeah. Hopefully there’s somebody writing it now.

Andrew Keen:  Well let’s, excusing the pun—sail on into your—

AnnaLee Saxenian:  [Laughs]

Andrew Keen: I’m sure I’ll be the—not the first or the last person to use that rather unoriginal pun but anyway let’s get into your new book which is called The New Argonauts. Tell me first about its title—fascinating title.

AnnaLee Saxenian:  Well I think that this notion is that these people who seek wealth in distant lands, these immigrants who have come to Silicon Valley are themselves sort of pioneering a transformation in the world economy but they are doing it through this process really of the—this dangerous risky process like the Argonauts who you know risked their lives.

Andrew Keen:  Who were the Argonauts?

AnnaLee Saxenian:  The Greeks—the ancient Greeks who sailed in search of the Golden Fleets and encountered many, many difficulties and I think part of the reason this title works for me is because it ain’t easy to start a company in China or India; it’s a very rocky difficult road and these people are really—I think motivated by the professional and economic challenges that come with it as well as their commitment to their home countries. But—and they will create great wealth but it is not—this is a very difficult process. And I want—I guess I want to focus attention on the people that are involved in globalization; we think about globalization all the time as this abstract force and in fact it’s being done by individuals, by real human beings and they’re the ones that will open up their economies and change their economies in ways that integrate them back into the US economy other economies. So Argonauts is a way to bring it back to the people.

Andrew Keen:  So the book is in part a description of the Argonauts who come from other countries to Silicon Valley to make their wealth?

AnnaLee Saxenian:  They come to Silicon Valley actually as part of the brain-drain. They really come from very poor economies where they’re well educated and they have no alternative. And they’re fortunate to get into Graduate School in the US and they get in the post-War period the US economy was very open to very—the best and the brightest from these poor economies and as—it sort of coincided with the dramatic growth of Silicon Valley. They sucked in—the firms in the Valley sucked in these immigrants really by the tens of thousands; they learned the Silicon Valley model and I think up until very recently most of them assumed that they would stay in the US as most brain-drain(ees) have in the past. But the very technology that they contributed to has made it possible for them to communicate, travel—much more cheaply and be both in the US and in say Beijing or Bangalore at the same time, so they can—instead of brain-drain what we’re seeing is a process of brain-circulation where people can live and work in two places at the—almost the same time. [Laughs]

Andrew Keen:  Could you give an example—a specific example of a new Argonaut and how his or her life reflects these broader socio-economic changes?

AnnaLee Saxenian:  One of the people that I profile in the book is a guy named [Ronald Chwang] who is a Taiwanese guy who grew up, came to the US, got a PhD in electrical engineering, worked in Silicon Valley at semi-conductor companies for many years—maybe 15 or 20 years first at the big companies and then eventually at some of the smaller companies; he got hired back by a company in Taiwan, Acer Computer which is now well known. It was a teeny little startup when he started working for it and he was immediately posted back here to run R&D for Acer because Taiwan was a very small backward economy at the time and they knew the technology was here. His career evolved in a way—in the ‘70s, ‘80s, and ‘90s that he spent much time here but then eventually—you know periodically he would go back there and work there for a while. So he became you know a cross-regional citizen, a trans-national citizen whatever; he’s now running Acer Venture Capital in Silicon Valley investing in companies that are developing technologies that Acer Computer back home might be interested in. He knows the community here very well; he knows the institutions in the community in Taiwan very well; he can work well in both business environments. You and I probably couldn’t do that; if we had grown up in the US we could not work in Taiwan. We don’t speak the language; we don’t know the institutions. If he had not come to the US for Graduate School he wouldn’t be able to work in the Silicon Valley environment. So we’ve trained a community of people who can work very well both in their home country environments and here and are really building extensions of Silicon Valley in these remote, poor—formerly peripheral economies.

Andrew Keen:  How remarkable are these New Argonauts? Are they the crème de le crème of their societies?

AnnaLee Saxenian:  I think by and large they are from the best and the brightest. It doesn’t mean they always come from the elite. Places like China and India have very merit-cratic education systems, so often they’re the crème de le crème in the sense that they went to the best universities, scored well enough that they could come to the US—certainly now they are the crème de le crème of their societies. They go home; they are identified with Silicon Valley which is a world symbol. They have—and part of their power is that they have access to the elites in their home countries, policy elites, industrial elites; they can help transform institutions much more quickly than would otherwise happen in their home countries. So I think they are a very—now a very powerful elite and certainly they were very bright engineers to begin with.

Andrew Keen: So they’re very different from—in some ways the pioneers of Silicon Valley, the Steve Jobs or the Larry Ellison(s) who were either sales guys or counter-cultural(ists) who generally didn’t succeed in a formal educational environment?

AnnaLee Saxenian:  Well these guys, their only way here would have been a formal educational environment so you’re right about that. On the other hand, the thing that’s distinctive I think about the people that pioneered Silicon Valley is that they tended to be middle class kids engineers; they weren’t the corporate elite or the political elite kids. They were middle class kids who went into engineering and these are—likewise, the kids of Chinese or Indians who wanted their kids to have successful lives and they worked hard and they came here and they worked hard within the environment. I think the point that you’re making is interesting in the sense that the immigrants came in after the Silicon Valley culture had been established. They didn’t pioneer it.

Andrew Keen:  Right.

AnnaLee Saxenian:  So the guys like Steve Jobs were the pioneers; they had this vision or maybe not this vision but they created this open culture and then the wave of immigrants which really takes off in the ‘80s and ‘90s, they came and worked in it. They didn’t create it.

Andrew Keen:  Was or is Andy Grove more of a classic model of a sort of a pre-Argonaut who is essentially an Argonaut?

AnnaLee Saxenian:  Well he would like to think of himself as one [Laughs]; the only thing I would say is that the distinction about the Argonauts is that they’re going back home and transforming their home countries and he never did that. And it’s partly a timing issue; I don’t know if he would have been—

Andrew Keen:  Right; very slightly Europe and anti-Semitism?

AnnaLee Saxenian:  Right; it would have been hard but you see you know in the ‘70s and ‘80s this whole group of Israelis who came and then really went home and helped transform the Israeli economy.

Andrew Keen:  Given the increasing ambivalence or even hostility towards America in a global society are the Argonauts generally sympathetic to the politics and culture of America before they come? Does it change them in any way?

AnnaLee Saxenian:  Well the antipathy towards America is sort of a relatively new phenomenon—maybe the last five—ten years max, I think. I think prior to 19—prior to 2000, I’m sorry, America was the golden—it was the—sort of the opportunity of their lifetimes. It was really an incredible opportunity and many of these people sort of came out of dire poverty. And they became very much acculturated. They—I think they valued the freedoms and the openness of the US culture and I think they still do. But I think right now we’re creating a new group of people who don’t feel wanted, who feel like you know we’ve created all sorts of—Visa procedures that are difficult, there’s hostility towards foreign-born engineers or citizens and I think that will have an impact in the future that could be very negative. But at the moment I think—this is a generation—these are generations that really came of age you know in the ‘80s and ‘90s.

Andrew Keen:  Is there a downside to your argument in The New Argonauts? I mean on the one hand of course you are suggesting that in this globalizing world we all win; these very smart people come to Silicon Valley, they acquire these highly sophisticated skills, and then they take them back to their own countries and make those countries richer. What’s missing here?

AnnaLee Saxenian:  Well there is a downside; I mean they have the—I guess I would say—I would phrase it differently. They go back and they have the potential to make their countries richer; now the pattern of development that they create is one that you know has a lot to do with domestic institutions and domestic politics, so one of the things—and that plays out very differently in different countries. I’m not saying that they’re sort of replicas of Silicon Valley or of the US culture even; you know in India you’re creating tremendous wealth in this one or two pockets alongside you know real misery and real poverty and it’s not clear you know if—Bangalore is better connected to Silicon Valley than it is to its rural areas and—.

Andrew Keen:  That’s a fascinating idea; it really is.

AnnaLee Saxenian:  Right; so you’ve got these enclave economies and that’s—if you don’t have a—sort of an institutional environment in your national economy that allows for this wealth to be redistributed or it gets—feeds back into education or whatnot, you know it could create real uneven development and I think that’s what we’re seeing in India right now. China—ironically the Chinese government has been more committed to redistribution, maybe for the wrong reasons—the Communist Party wants to protect its long-term future, so they are investing a lot of resources into the rest of the country trying to counteract unevenness. So how it plays out developmentally in these recipient countries is something that remains to be seen and has more to do with domestic factors than just globalization per se. I think it gives great opportunities; if you look at Taiwan and Israel which are both small countries, they—well let’s put Israel aside because it’s got a war going on—a continual war, but Taiwan went from being one of the poorest economies on the level of Africa in 1980 to being one of the wealthiest most dynamic economies in the world today. And it was largely I would argue because of this connection.

Andrew Keen:  So your book covers The New Argonauts of India, Taiwan, Israel, China; there are a lot of—parts of the world that are missing. I mean it’s not of course your fault but—

AnnaLee Saxenian:  [Laughs]

Andrew Keen:  —you don’t talk about the New Argonauts from Africa.

AnnaLee Saxenian:  Right.

Andrew Keen:  Or the Muslim—Middle East—what’s going on here; how would you explain that?

AnnaLee Saxenian:  Well I do talk about them but only to remark on their failure or their absence. One of the most interesting examples is there are a large number of Iranian engineers, very successful entrepreneurs in Silicon Valley. I think it’s not too hard to imagine why they wouldn’t want to go home. I mean they’re very secular; they’re very highly educated; they don’t see the opportunity but I am sure—they have a big association; they’re very organized; they know one another. I’m sure that if the political environment were right they would go home. So you have a set of people—Russians are another example of that. There are some highly educated Russians here who perceive the environment as too unstable politically and economically to go home. Now these things can change very quickly; when I started studying Indians none of them would go home. They said it was too bureaucratic, too corrupt, too backward, and something tipped around 1999—2000. We had a number of factors but they really started to go back very quickly. So things can change quickly. The places that are really left out are the ones that don’t have education systems that train people sufficiently to partake in the technology revolution, to even come and be educated as engineers. Africa, large parts of the Middle East, large parts of Southeast Asia still—if you look at the education data nobody is getting—or a very small elite is getting university education; the ones that—ironically the ones that get trained and come to the US are motivated to go back because they can run their own countries. The other places that are missing from this are—you might note Europe, Japan, and I think the story there is different. Europe has highly educated people but they have much less incentive to come to the US to be educated. They have good educational institutions; they have economies; if you’re French and even if you came to Stanford to get a PhD you would be well advised to go back if you want your job in the civil service or in a big corporation. You would not want to stay in Silicon Valley. So I think there’s a set of institutions and incentives in the advanced industrial economies that undermine this dynamic. So it’s really these places that have educated their workforces and—but not been able to keep them initially that are benefiting from this process.

Andrew Keen:  There’s a great debate about the importance of computers and the internet in education. Given the fact that you know these New Argonauts quite well what was the role of technology and computers in these successful people’s education? Do you think it’s critical?

AnnaLee Saxenian:  No; they were educated before [Laughs] computers became a part of their education. I think the way that they’ve benefited from computers and technology is in the fact that it allows—they can now stay in touch. They can run a company that is based in Silicon Valley but also has a team in India or China that they can fly back and forth cheaply and easily—that they can be on the phone; they can IM their teammates across the Pacific Ocean. That’s where technology has come in for them—not in their education.

Andrew Keen:  But what’s your feeling about jump-starting economies or cultures that are not producing The New Argonauts? Is this—is it going to be done most effectively through education?

AnnaLee Saxenian:  Absolutely, but not necessarily through computers in education. Nobody has demonstrated to me that throwing computers into India—India has a program for a computer on every—you know a laptop for every kid or school or something. Computers by themselves are just another machine; they’re a tool. They may be used well; they may be used poorly. But there’s no substitute for developing good curriculum, having teachers in a classroom helping people learn to read and write and think on their own and there are many parts of the world that still are not doing that.

Andrew Keen:  Any sort of inside tips on where The New Argonauts are going to come from—places that we wouldn’t expect?

AnnaLee Saxenian:  I think that you will see—I think that we may end up seeing sort of a brain circulation going back to St. Petersburg in Russia; I think that’s the place that’s sort of the most prime to do it. I think Argentina is a place that I would watch; again places that have some—Vietnam maybe—places that have sufficiently educated people that can work in two different business cultures, really work in the—you know the technology—US Western technology culture as well their home countries. The gap—you know in the past we had multi-nationals that bridged these gaps. But they really didn’t integrate the regional economies. The thing that’s different now is that Taiwan and Taiwanese firms and say Indian firms are actually working very closely; they’re co-designing products with firms in Silicon Valley. They’re really able to develop their own skills and develop their own specific specialized capabilities and therefore developing a much more sort of autonomous way than a branch plant of a multi-national which simply found cheap labor.

Andrew Keen:  AnnaLee I want to really thank you for a fascinating interview. For people who want to follow up on you or your school at UC what would be the best way of doing it?

AnnaLee Saxenian:  Well we’re on the web at www.sims.berkeley.edu and I urge you to come and check us out.

Andrew Keen:  And I urge everyone to have a look at AnnaLee’s new book which is called The New Argonauts and it’s published by Harvard University Press and it’s out now. Thank you AnnaLee so much.

AnnaLee Saxenian:  Thank you.

Narrator:  Thanks for listening to After TV, which is hosted and distributed by www.pajamasmedia.com, featuring music by Unity, an artist licensed by Creative Commons. Hope you can join us again.