CIO —
When I was still cutting my teeth as a tech journalist, I had an idea for a politically incorrect article that would explore why a disproportionate number of the heavy-duty technologists in Silicon Valley were originally from India or Taiwan.
In those days I was reading Robert Reich’s The Work of Nations, which argues that national economies are dissolving as borderless corporate giants straddle the globe. Yet living near Silicon Valley, I felt I was at the center of that world, chronicling the latest innovations before anyone else. The idea that the best and the brightest were flocking here from the four corners of the earth added to the excitement.
That influx never stopped—and if the cap on H-1B visas were lifted, more would come. But as New York Times columnist Thomas Friedman observes in his book The World Is Flat, in a globally networked world, the special advantages of living and working in the United States are melting away. Thanks to intercontinental fiber and the cheap voice and data traffic that fills it, innovators such as the people I met almost 20 years ago can now stay where they are and, increasingly, enjoy a standard of living that rivals our own.
To those of us who have seen offshoring up close, Friedman’s book is not exactly a revelation. Complaining about the outflow of work to India and China is beside the point; it’s just part of global reality. The challenge today is to figure out where we stand in that new reality.
The pat answer is that the United States by nature will always lead in innovation. But there’s nothing sacred about Yankee ingenuity. As Reich said 14 years ago, the decisions multinational companies make have little to do with nationality. Today the giants move quicker—as can any company plugged into the global network. And they will buy good ideas wherever they find them.
To stay the world’s leading innovator, the United States needs to increase its innovation output, not merely hold the line. I admit that with the steep drop in U.S. computer science majors, the prospects look somewhat grim. Nor have I the faintest notion how to counter a strange new twist in the culture—one that arrives at just the wrong time—that rejects science in favor of dogma and swagger. But at least we can make a stronger, smarter effort to cultivate, recognize and reward homegrown innovation.
The urgency of doing that was brought home to me in 2002, when a venture capitalist told me about his new business: selling off failing startups. Where were the buyers? China, Korea, Taiwan and other Asian countries that knew a bargain.
Those startups may have been in trouble, but in many cases their technology was solid. They were victims of the post-boom retreat, watching helplessly as the herd galloped away from high-tech. On opposite shores, canny observers snapped them up.
The boom’s hangover is gone now, VC purse strings have loosened somewhat, and Silicon Valley is finding its footing in a new global landscape. Most people I know have accepted that panicking about offshoring is beside the point. The United States is still the world’s largest technology market. Not only do we know best how to sell into that market, we also understand better than anyone else how to craft new technologies that fit into our complex mix of customer technologies and cultures.
If we behave like a herd and flee from troubled product categories, we’ll lose our edge. If we panic about jobs or innovation going elsewhere, we’ll be paralyzed. But if we examine each innovation in its own right, with special emphasis on ideas with unique value for the largest technology-consuming country in the world, we’ll have a fighting chance to stay on top.
