Why Sydney Needs Silicon
Tuesday June 8, 1999
ABOUT an hour south of San Francisco, straddling the San Andreas Fault, is the collection of small cities known as Silicon Valley. Locals call it "the Valley".
When I first visited the Valley in the early 1980s I was very excited. I had visions of some sort of technological utopia, a land where computer dreams came true and you could pick up microchips off the street. Somehow, I thought it would be something special.
I was sadly disappointed. Special things do happen in Silicon Valley, but the place itself looks just like anywhere else. Anywhere else in urban America, that is.
Which is to say that it is a collection of shopping malls, corporate parks, warehouses, fast-food establishments and the like, all crisscrossed with four-, six- and eight-lane freeways leading nowhere.
Lots of people live there, too, though driving around you never see their houses. They are hidden from the noise of the freeways by high walls, and tucked away altogether out of view.
At the southern end of Silicon Valley is the city of San Jose. (Do you know the way to San Jose? Tra la la de la la la). Sure, it's Highway 101, stretching down from the dreary southern suburbs of San Francisco, past the airport and factories and the small wooden houses made immortal in another song, Little Boxes: ". . . and they're all made out of ticky-tacky and they all look just the same."
Highway 101, pathway to computer heaven, is one of the most congested and least attractive pieces of freeway in North America, which is saying something. Altogether, Silicon Valley is an unattractive and overcrowded place, whose appearance hardly measures up to the reputation it has worldwide as the birthplace of the computer revolution.
So much for the complaining. Never let it be said that I'm anti-American. I'm married to one, after all, and my son carries a US passport. My real complaint is not with Silicon Valley's ugly appearance and unprepossessing roads, but with Australia and why there is no Silicon Valley in this country.
Nondescript though it may be, the cities and towns that form Silicon Valley house many of the most interesting and innovative companies in the industry. It has lost little of its allure, and it is still Mecca to techno-hopefuls from around the world.
They are drawn by companies such as Oracle and Hewlett-Packard and Apple and Sun, and by small hardware and software start-ups in their hundreds.
They are drawn by the world-class research facilities, such as Xerox's famous Palo Alto Research Center and IBM's Santa Theresa labs, and by Stanford University. They are drawn by the analysts and consultancies and PR and market research firms who thrive on all this stuff.
If you want to get into movies, you go to Hollywood. If you want to get into computers, you go to Silicon Valley.
The valley has made millionaires of thousands of people. The first were Bill Hewlett and Dave Packard, who gave their names to what has become the area's largest and most successful IT company.
It spawned Apple Computer, which saw Steve Jobs and Steve Wozniak rewrite the American dream. Also founded there was Sun Microsystems, which continues to prove that "the network is the computer". (Sun, by the way, was originally an acronym for Stanford University Network).
Of course, we only hear about the successes, and some of the more spectacular failures. For every winner there are a dozen losers. A bit like the racetrack, really. Or life itself.
Small software companies that we have never heard of disappeared into oblivion, taking with them the hopes and dreams of thousands of likable and intelligent individuals. But, you know what? These people get up and have another go. In the US, there is no stigma attached to failure.
One of the driving forces behind Silicon Valley has been the willingness of these people to have a go, and the willingness of others to give them a go. Venture capitalists will lend money (and often take a piece of the company) on the basis of a good idea.
Try to do that in Australia, the clever country, the land of the fair go. Bankers here want to see bricks and mortar, or a warehouse full of stock, before they'll lend you money. They don't realise, as American financiers have for years, that assets in the information age are very different from those of the previous era. Australian banks are still coming to terms with the industrial revolution. (Those, that is, that have yet to leave the Stone Age.)
That is why we have no Silicon Valley in Australia. Our country is littered with the corpses of companies that tried and failed to do what hundreds of companies in Mountain View and Sunnyvale and Menlo Park have done.
Some have succeeded, but many more have failed, sometimes through bad management or bad luck, but more often because of a troglodytic investment climate, small-minded bankers who were happy to gamble on the promise of real estate development in the decade of greed, but who lacked (and lack) the foresight and intelligence to understand how the centre of balance in the economy has moved to information.
There are a few venture capitalists in this country. They struggle against these attitudes, against an adverse capital gains tax regime, and against government indifference and ignorance. Information is an asset, as we know. But it is a very different asset from land and buildings and iron ore and wheat. The difference is that information can be infinitely reproduced, which means its value lies not in its generation but in its propagation.
They've known that for two generations in Silicon Valley, but the gnomes of Collins Street and Martin Place are still fighting the last war. Australia is the loser.
Now the Government is censoring the Internet, in one of the most bizarre and impractical pieces of legislation seen in a long time. Sometimes I despair for this country.
geepee@ozemail.com.au
© 1999