Wall Street Skews View Of Silicon Valley Future

As Silicon Valley goes, along with its constituent cities, so goes our economy.  From Austin to Boston, Raleigh to Los Angeles, and Seattle to Cupertino, the economic future of the U.S.A. is irrefutably linked to the technologies we can produce and get embedded in as many contraptions as possible.

Our manufacturing business will eventually winnow itself down to the semiconductor chip and concomitant software we can design to teach the world how to behave and spend their money.  We may not even want to actually fabricate those chips here, so ours is moving faster than forecast towards a true knowledge-based economy.  However, any time you dramatically extract a way of life, from a gene pool, like manufacturing, from a powerful nation, like the U.S., there are bound to be transition issues.

My favorite transition issue – this week- is the move from Facebook to copyright their name, or the word face.  The impact of trademarks and copyrights over the next decade alone threaten to keep our ecommerce stagnant with lawyers that will crop innovation for years to come.  Power games, power trips and foolish concessions are a major threat to growth and jobs.  From bandwidth issues, to net monitoring issues, to IT education, and especially towards resource re-allocation issues, our leadership refuses to compete.  Our government has tied our hands and made it extremely difficult to compete.

The speed of change facing our commerce department has overwhelmed our government and they don’t seem willing to accept the changes necessary.  Wall Street and the talking heads who batter the TV every afternoon screaming at us about how to game the markets, tell a whole different story about what technology is about, and how it gets funded and becomes a monolith.  If you counted up the money that is sitting in the cash draw for just some of the top ten companies, Apple $25 billion, or so, Microsoft about $30 billion and so on, you would think there might be some idea there about how to put that to work.  But no jobs, and no miracles from Jobs either?

The problem with the present stock market media manipulation and commerce generating technologies that we are trying to bring to the market, is that they don’t always share the same goals.  The “quarterly earnings” game is no fun, just ask John Chambers.  Mr. Softy has no idea what to do with its money and so they hope something will pop up.   If these guys aren’t hiring, then there really is something wrong.

Tom Perkins explained this carefully when he said,

"Venture capitalists work with entrepreneurs to start new companies from the ground up. We earn our reward only when companies become successful.

"Investment bankers are deal makers. They're in charge of bringing companies public and advising on acquisitions. Their money is earned by the transaction, and in the fraction of the time it takes a venture capitalist to realize a profit.

"Whereas Wall Street has been the source of what feels like endless scandals and financial catastrophes, venture capital has created jobs, jobs, and more jobs of the highest caliber. It's no surprise that Silicon Valley's Sand Hill Road in Menlo Park has been the locus of our national high tech activity and the envy of the world, while Wall Street is secure in its reputation as the planet's frequent scourge.

"The facts speak for themselves. Approximately 11%, or 12.1 million, of private-sector jobs reside at companies that were founded with venture capital. These companies include Intel, Genentech, Google, FedEx and Starbucks. Another 500,000 jobs are currently housed in newer start-up companies that are still privately held, and are poised to grow exponentially over the next decade.

"In 2009, a year with nearly universal shrinkage in employment, 35,000 new jobs were posted on the job board StartUpHire.com, all created by companies backed by venture capital. This job creation has occurred in every one of the 50 states. Wall Street's share? Zip, zero, nada."

Technology, and our competitive edge in finding markets for it, is challenged by our ability to navigate the transitional issues facing a Congress and administration with an oblique view, if any at all, as to how to reinforce our edge and bolster our security.  Our schools, including teachers and parents, are still in denial about technology, and our leadership seems unaware of the stakes.  Our children, though they may spend most of their waking hours connected, few have a clue as to how to make a living from it.

Rest assured, this is not the case in other parts of the world.  Throughout Asia, Latin America and around the world, youngsters are getting online and getting themselves educated.  Entrepreneurs are finding ways to compete in the world’s greatest equalizer yet, the Internet.  Many foreign governments are either savvy enough to assist, by providing bandwidth and access to the world wide web, and they are also aware of the opportunities available.

Our domestic world today finds many youngsters texting gibberish with little interest in learning what is under the hood.  Our leaders were a bit slow with the uptick in getting competitive access to the vast majority of citizens who want to be online, and getting business at all levels access at a sensible price.  There is much work to do.

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The boom in technology stocks however does not indicate a boom in jobs for Americans, especially young ones, anytime in the near future.  If you run HR for a Disney, AT&T, an Oracle or an Apple, redundant I know, you spend most of your time getting status checks on visas and focusing in on a small area of expertise.

Perhaps one day we will either be paying, or forcing, our own young children to learn math and programming because we can’t accept foreign candidates.  Or maybe, they will stop coming?  I doubt you can pay some of my kids to master the nuances of data warehousing, but those are the jobs available outside of big box stores.  The next generations of kids who spend productive time online will thrive.  Those communities who don’t focus on actually learning the world of online business, will be serving those who do.


2 Responses to Wall Street Skews View Of Silicon Valley Future

  1. 10west December 4, 2010 at 7:36 am #

     Unfortunately, is that an article like this needed to be written in 1999.
    Unfortunate again, is that an article like this written in 1999 was ignored by the locus of power which is by and large a theatre built by those who ran the past, and want to continue to run the future
    Unfortunate again, is the fact that the industrial mind, such as displayed in ruling powers nearly everywhere, is not the thinking which will make the future a repeat of the past.
    The world changed, and apparently no one told them. Or more likely, they were told then, and when told today, they will live in an illusion only denial can provide. A denial of the fact that the global operating system is changing. Now everybody and his mother is chiming about stuff, as in this article, like it is new, when in fact Bill Gates was talking about it in 1993.
    Like the first billionaire, a programmer mind you, we noticed it was not an industrialist who "won" the billionaire game to be the first. If we would have said that in 1897 they would have laughed. In 1997, it came true. It is telling.
    Bill Gates, among others, saw a lot more than he has written about. It's all coming true, the transformation of American arrogance as some united whole, into just another "state" in an international order of states (formerly nationa), competing with nations who are not drug addicts, are not porn addicts, who are not back stabbing money grubbing graspers, who have not yet slipped into the pattern of decadence, degradation and decline that America was sliding into since 1969.
    We're in it now!
    America cannot compete with the brilliant kids of the next, if our overall illusion is that we are just the best, without performance to prove it. To just be the greatest potential destroyer of people does not make you the best. To live in an illusion, that our decadence and lazy entitlement is going to beat out India, China, Japan and Brazil, just because we hope it will, is the insanity all around our ruling power, which will only intensify in providing solutions to problems they don't perceive the true nature of.
    We are a part of a whole, and all the stuff we should have been experts at by now, and grasped in even 1990, was by and large ignored by the government, who could have educated the masses to take advantage of it, because they could not listen to a geek who knew more than them.
    Now we can't recover it. Who, on an international banking and finance level, is going to invest in a bunch of whiners, addicts, and D rate Americans? How is brainpower required performance, ever going to be captured by brainless Americans? It's not. The structural change, of an information age, has shifted from America to other states in the international order, and how they apply it to what we used to do. That lost employment is not going to return to America, it's gone over seas. Your witnessing the beginning of the end.
    We may make the technology, but apparently we can't use it to the level of our super competitors out there, so even if you embed it everywhere, someone else is applying it to our demise, by brain power.
    Get it? It's over, but us scrappers we'll harness the technology and fight it out anyways! LOL Go Matt Cutts!

  2. Hawk
    Hawk December 4, 2010 at 8:28 am #

    hi Matt, thanks for stopping by.  In 1999, Bill Gates didn't even consider the Internet a platform, and I for one was out there trying to raise the bar for education and for understanding how we might lift everyone with improved education and by getting government on board.  Education is worse off than ever, and our government lags so far behind other nations in getting on board the Digital Age, it is scary.  Check out this article by an old friend who I think understands where it all must begin.  John Mikton is an IT Director for the International Schools which have been leading the digital charge and making a difference.  I'd sure like to join you in any initiatives you have that will further our competitive edge, and grow opportunities for our kids.

    Peace and come back often or do a guest appearance.

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