SILICON VALLEY SIMILAR TO DETRIOT?

Interesting piece by Steve Lohr at the NY Times though I think it's a bit early to say Silicon Valley is losing its edge. Until other societies develop a culture of entrepreneurship and innovation on par with America's, I don't thing it will lose its leadership position. Even for the sake of conversation if another nation developed to the same point culturally, it would be a while before the same web of academic, government, and industry research and collaboration is created to copy Silicon Valley's hotbed of innovation.

HAS the technology industry - a big and undeniably important slice of the economy - become a business whose best days are behind it?

In other words, is Silicon Valley turning into Detroit?

That is certainly the way things look now to some industry observers. They believe that Silicon Valley is destined to see its competitive stature erode, as new global rivals undercut American technology companies on price and increasingly wrest the lead from the United States in innovation.

More near-term support for the "graying industry" view of technology came two weeks ago from Goldman Sachs. The economy may be doing nicely and corporate capital spending picking up, but it will not help the technology industry much, according to the investment bank's survey of corporate spending plans. In 2005, corporate spending on information technology will rise less than 4 percent, the Goldman analysts predicted. "Technology looks to be firmly in the cyclical category for now," the report stated.

Yet another, somewhat longer, view suggests that America's technology industry will not inevitably decline. The more optimistic outlook rests not on the prospects for Wall Street investors, but on the nature of information technology.

Computing is an almost infinitely malleable, universal tool. Software can be programmed to do all manner of tasks. So computing is more like biology - it evolves - than like traditional industrial technologies such as steam, electricity and the internal combustion engine.

Information technology moves on, up the ladder of economic evolution. The PC Forum, an annual gathering organized by the technologist Esther Dyson, known for her free-ranging and often incisive intellect, provided a glimpse last week of where the technology is headed. The conference is a kind of "show, tell and schmooze" for a few hundred industry executives, venture capitalists and start-ups.

One way new technology is moving ahead is by increasing its focus on the uses of technology in specific fields, instead of being narrowly fascinated with the tools themselves. So the technology, Ms. Dyson noted, becomes interesting to a wider world, beyond "engineers from Silicon Valley." (full article)