Can Your City Be the Next Silicon Valley?


prairie 02

Cities around the world have declared their intent to become “the next Silicon Valley”. New York’s Silicon Alley, Austin’s Silicon Hills, Portland’s Silicon Forest, London’s Silicon Square, New Zealand’s Silicon Welly, Louisiana’s Silicon Bayou, Israel’s Silicon Wadi, Scotland’s Silicon Glen, and Kenya’s Silicon Savannah testify to the power of this idea. Promoters have even resorted to puns or worse, e.g., Santiago s Chilecon Valley, Philadelphia’s Philicon Valley, and (you cannot make this up) Cape Cod’s Silicon Sandbar.

But why not? After all, every city knows the key ingredients. Why shouldn’t an ambitious town simply round up a bunch of entrepreneurs and venture capitalists, stir in some startup lawyers, accountants, and angel investors, recruit a bunch of engineers who want lower cost housing, and build ties with the local university? How hard can it actually be?

The fundamental confusion is between emergent systems that are organic, unplanned, and uncontrolled and engineered systems that are linear and guided. In their book Competing on the Edge: Strategy as Structured Chaos, Shona Brown and Kathleen Eisenhardt offer a useful metaphor: rebuilding a prairie. We know all of the ingredients of a prairie. We understand precisely the dozens of plant and animal species that comprise the ecosystem that once stretched from the Rockies to the Mississippi. They point out however, that even with perfect knowledge, if you were to acquire land near O’Hare airport, prepare the ground, and introduce the appropriate plants and animals, what you end up with would not be a prairie. Indeed, it would potentially be nothing like a prairie. (And yes, we have a Silicon Prairie, somewhere in Nebraska I think).

It turns out to be very difficult to re-create an ecosystem, even when we know all the ingredients. To start with, emergent systems are grown, not assembled. And they are not grown from scratch. The actual starting point matters because emergent systems are highly path dependent: past choices shape and constrain future ones. That means that simply introducing seeds and prairie dogs into an acre of land is more likely to result in a patch of weeds than “amber waves of grain”.

Worse, we usually don’t quite know all of the ingredients of most organic systems. Some are highly contextual (meaning your required ingredients and mine may vary) and some are contingent (they only work some of the time, mainly because our understanding of them is imperfect). It matters what sequence you introduce ingredients — much like a souffle that collapses unless the beaten egg whites are added last.

Technology regions and prairies are two examples of complex, emergent systems. There are many others, including companies and markets as well as governments and polities. As they grow in complexity, these organizations increase exponentially the number of components and the number of interactions between their components. They become more complex, organic, and self-organizing — which means you cannot predict how these systems will evolve, much less reproduce this evolution once it happens.

Can systems like this be led? They can be guided successfully only by leaders with a deep appreciation of unintended consequences. In any emergent system, the second and third order consequences of any decision are likely to overwhelm the intended first order effects. You can even look at your life as an emergent system, which is why, as Steve Jobs famously noted, you can connect the dots into a coherent post hoc narrative looking backwards, but you cannot “connect the dots going forwards”, i.e., predict anything very meaningful about your life long before it happens.

Douglass North is a wonderful economist who understands the organic and emergent nature of economic systems better than most of his fellow practitioners. He shared the Nobel Prize in Economics in 1993 for documenting the confounding role that institutions, culture, and history play in economic outcomes. Shortly after receiving this award, he was asked whether, since institutions matter so much, he had any advice for Russia.

He thought for a moment and replied: “Get a new history”. That is one starting point for any city or region looking to start the next Silicon Valley. The other is provided by Emily Dickenson, who in 1755 had given a lot of thought about how “To make a prairie”. Her famous verse, worth contemplation by the ambitious bees of the world:

To make a prairie it takes a clover and one bee,
One clover, and a bee.
And revery.
The revery alone will do,
If bees are few.

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