New-Tech Society: A good dose of derring-do

February 22, 2002

In a six-page special, The THES looks at the impact of new technology on our society and the degree to which we control it or it has come to control us.

Manuel Castells tells Martin Ince that thinking the unthinkable and an openness to immigration are what built Silicon Valley.

Sociologist and internet authority Manuel Castells has studied how new technology is changing all aspects of our society. Are office workers dwelling in neighbourhood communities turning into a herd of "nomadic" individuals living in virtual communities? Speaking fittingly by email, he begins by explaining the very particular factors involved in the success of Silicon Valley. His base at the University of California, Berkeley, where he is professor of city and regional planning and of sociology, has allowed him to glimpse its unique history up close.

Manuel Castells : "Silicon Valley is an extraordinary combination of elements, of which business entrepreneurialism is only one. And this is a significant matter since Silicon Valley is the seedbed of the information technology revolution.

"Historically speaking, Stanford University was absolutely critical to starting up the process with the foundation of the Stanford Industrial Park in 1951. This was the personal initiative of Frederick Terman, the provost and former dean of engineering at Stanford. Military research funding and military markets were also essential to the creation of the semiconductor industry in the 1950s and 1960s, although from the 1970s onwards military markets came to represent under 20 per cent of total sales of Silicon Valley. By contrast, Los Angeles was much more dominated by military markets, and much less innovation came from LA. Third, the hacker culture, meaning students, university researchers, and all kinds of alternative types in the Bay Area, was essential to the personal computer revolution, and later on to the internet revolution.

"The fourth vital factor was the migration to Palo Alto of William Shockley, the inventor of the transistor, in the mid-1950s. This was an essential source of knowledge during the birth of the semiconductor industry, and was purely fortuitous."

Martin Ince : "What about cultural rather than organisational issues?"

MC: "One can argue that the frontier culture of the Bay Area was a major source of innovation. For instance, Shockley had tried to commercialise his invention on the East Coast, and AT&T and RCA were not interested, dependent as they were on vacuum tube technology. AT&T turned down the precursor of the internet simply because it had a vested interest in analogue-based communication technology.

"The Bay Area has always been prone to thinking the unthinkable. But this entrepreneurial layer is more in the culture and institutions of the region than in its actual business dynamics. It is an openness to new businesses rather than a business culture.

"Later on, in the 1990s, the openness of the Bay Area to immigrants from all over the world was crucial to attracting the talent, and to building the global networks of innovation on which Silicon Valley is based."

MI : "And what about the Californian idea of 'daring to fail'?"

MC : "The culture of risk in Silicon Valley is a more complex issue. In Silicon Valley, individuals took their chances. They did not think unemployment. They thought opportunity. They expected nothing from the state. They despised government. They still do, except to get protection against terrorists.

"Government, in general, is the enemy, particularly for the entrepreneurs; and for undocumented immigrants, it is the danger.

"The libertarian culture is an essential ingredient of the innovation system in Silicon Valley. On average, a start-up fails seven times before succeeding. The safety net is people's ability to use their skills and their education to get good jobs while they recharge themselves for new projects.

"Of course, there are also many personal failures. Most Silicon Valley engineers have very tense lives, and very miserable personal lives, with a high degree of isolation, depression, drug and alcohol abuse, and a high rate of suicide, besides the usual story of broken families, although the latter is a general trend in the United States. Some studies from Santa Clara University have shown a much greater level of individualism and selfish attitudes in Silicon Valley than in the US at large."

MI : "How does the Silicon Valley culture of openness compare to the picture in Europe, and the United Kingdom in particular?

The UK has low unemployment and a shortage of skilled people. It also has policies towards immigrants that come close to racism - indeed a principal reason for British fears about European Union expansion has to do with the possibility of more immigration. Can this disparity be explained?"

MC : "This is one of the two most important differences between the UK (and the rest of western Europe for that matter) and the US in terms of their differential ability to prosper in the new techno-economic paradigm. The other is the superior quality of US research universities - only Cambridge and Oxford is comparable in the whole of Europe.

"The openness of the US to immigration is its decisive advantage. The US prospers by absorbing over 200,000 highly skilled new immigrants per year. In Silicon Valley, in the 1990s, 30 per cent of the new high-tech companies created during the decade had a chief executive officer who was either Chinese or Indian. Add the many other workers from other nationalities and the share of foreign-born innovation is substantial. Given the bad quality of the US primary and secondary public schools, it is safe to attribute a large part of the success of US technology and new economy to immigrant input.

"From the start the US was an immigrant society, so its culture and institutions were open to immigration. Of course, the US is racist, and particularly racist with one of the oldest American ethnic groups, African-Americans. But America has tackled up front the issue of racism, while Europe persists in the illusion that European societies are ethnically homogeneous, save for a few immigrants. There is no social basis for letting immigrants in on a large scale, although Britain is moving faster than other countries in opening the door to the necessary skills. The other reason Britain is not at the same level as the US is that unemployment in some areas of the country, and for the least skilled people, is still a problem, and unemployment feeds racism and xenophobia in all situations. The immigration issue is critical in Europe, and in the UK, both in terms of the decisive input it has in the new economy, and as a permanent feature of the new society that is evolving as a result of the internet."

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