Why should we still care about Silicon Valley?

There has been a lot of talk about Silicon Valley reaching its peak. Bloomberg just announced in an article that New York beats out San Francisco to be the world's best tech city. In the ranking, New York beats out San Francisco on the factors...

There has been a lot of talk about Silicon Valley reaching its peak. Bloomberg just announced in an article that New York beats out San Francisco to be the world’s best tech city. In the ranking, New York beats out San Francisco on the factors “Business Environment” and “City Buzz/Wellness”. However, San Francisco still leads the race when it comes to “Tech Environment” and ranks higher than New York when it comes to “Talent Pool”. But is this still a sign that we have reached the end of the Silicon Valley Tech-era?

What’s up, Silicon Valley?

Silicon Valley is a unique cluster consisting of capital, world-class universities, and high-tech industries attracting both local and state government, business and capital, civil society, scientific and research institutions, and people from all over the world. It has become known as the world’s leading place for innovation and high tech, and it is home to companies like Google (Alphabet), Facebook, Apple, and Oracle.

The success of these multinational high tech companies originating from the Bay Area has resulted in them becoming as influential as a nation. In a comparison made by IMF in 2017 between Silicon Valley companies and countries, it is seen that the economic power of Silicon Valley-based companies such as Apple, Alphabet, and Facebook is comparable with that of an independent state.

So even though New York tops the list as being the best tech city in the world, San Francisco together with the Bay Area is still a force to be reckoned with. According to Reinhardt Krause, author at Investor’s Business Daily, Silicon Valley has “the educational infrastructure to retain higher-paying, cutting-edge information technology jobs“, and “provides a competitive ecosystem for startups to push innovation further thanks to having customers, partners, and suppliers nearby“. And it is still the region with the most valuable and successful tech companies in the world.

The rise of techplomacy

As the share of the Bay Area’s national income only continues to climb, together with the impact that digital developments originating from the Bay Area has on the society, foreign governments are increasing their presence here. Casper Klynge, Denmark’s Tech Ambassador, writes in an article for Techonomy that the rapid development of new technologies is making it difficult for policymakers to keep up, which is why Denmark decided to have an ambassador completely devoted to tech. And with this, the concept of tech diplomacy, or “techplomacy”, was born.

As the development of future technologies is happening in Silicon Valley, countries’ presence in the Bay Area is essential, according to DiploFoundation and the Geneva Internet Platform, who in partnership with the Consulate General of Switzerland in San Francisco and swissnex San Francisco, wrote the report The rise of TechPlomacy in the Bay Area. They further state that “sooner or later, policy follows technology”, not the other way around. But it is concluded that tech diplomacy is not a one-way process. In order for high tech companies to be successful, they must also nurture the relationship with national and foreign governments as policymakers ultimately can make or break the business. You can read the full report here.

The Nordics in Silicon Valley

Nordic Innovation House serves as the gateway to Silicon Valley for Nordic businesses, whether it’s a startup or a larger corporation. The office is located in the heart of Silicon Valley, downtown Palo Alto, and provides a soft landing spot for Nordic companies who want to take advantage of the many things that Silicon Valley has to offer, whether it’s accessing US venture capital (which there is a lot of in the region); to be near American business partners, use the US as a springboard for global expansion, or to gain access to American customers.

Seminar at Nordic Innovation House. Photo: Office of Science and Innovation USA.

Nordic Innovation House has a competitive network and supports Nordic businesses with valuable insights on how to navigate in the complex ecosystem that is Silicon Valley. If you are a Nordic company and you are looking into launching your business in the US, Nordic Innovation House has written a guide on everything you need to know before getting here, including networking strategies and the importance of the “pay it forward” mantra which permeates the region. To work more strategically towards integrating diplomacy and technology however, Sweden currently has an Honorary Consulate present in San Francisco to drive those questions with the tech giants.

Yes, Silicon Valley has changed

Silicon Valley has changed drastically in the last decade. But instead of calling it “reaching the peak”, it should rather be called “entering a new era”. The success of the region has made it an important player in the global economy, thus giving it tremendous power which it didn’t have before. Instead of only attracting new businesses, hungry for venture capital and talents, it has now started to draw the interest of policymakers. As society and technology are becoming more interconnected, it is important for policymakers and tech companies to collaborate in order to ensure a sustainable future. And it is in the Bay Area that the technology of the future is born.

Author: Hanna Isacsson, intern at the Office of Science and Innovation in Washington DC