Saturday, February 12, 2005

How Green is Our Valley?

[This opinion orginally ran in July 2004, in the now deceased Silicon Valley Business Ink. We are posting it here for the archives].

At this awkward moment in the history of globalization, the Valley would do well by looking at a book called "Trust."

In his 1995 ode to capitalism, the conservative social theorist Francis Fukuyama introduced a simple but useful measure for understanding why certain cultures have struggled in building large business infrastructures, and why others have succeeded. Historically, cultures that have been dominated by strong “familistic” rules and traditions – for example, China, Taiwan, southern Italy – have pulled hard on their progeny to stay closer to the home. And when businesses sprouted in those countries, the tendency was toward corporate structures dominated by the founding families. On the other hand, countries with a weaker gravitational pull from the family -- Japan, Germany, and the United States – have grown faster, larger. The weaker-family countries today host the world’s largest corporations, and perform on a global stage. The common thread in each of these cultures – cutting through wide gulfs of values – is the tendency for people to “spontaneously socialize.” That is, the ability for people to regroup into new families, based on shared interests and common purposes.

You don’t have to be a liberal to find fault in Fukuyama’s thesis (indeed, many of his conservative brethren took shots). Recent developments in the global economy would appear to refute the argument that only the strong-family countries are on the wrong side of history. Witness the economic miracle of China. And it’s difficult to ignore other cultures where the state, successfully, has stepped to spur business activity. Fukuyama’s book arrived too early to deal with what is happening in China. But he did have the opportunity to study the state’s role in building Taiwan. So, the great champion of free markets conceded that the state can play a key role in shaping the destiny of its people. In other words – sometimes, you cannot rely on spontaneity. You have to make a collective effort.

It’s a sobering, non-ideological thought for anyone interested in the health of their economy – whether that economy is global, national, or local. Take our local economy:

We often think of the Valley as one of the finest and efficient free-market experiments. In fact, Fukuyama saw the Valley as one of the most compelling exemplars of spontaneous socialization at work. You can see how this is true. The Valley has been prodigiously successful in attracting a special kind of people – people who are willing and able to spontaneously group, regroup and create new market opportunities and ecosystems of support wherever they go. The career of the typical Valley R&D engineer spans the lives of several innovative companies, and the resume of that engineer might easily tell the story of the Valley’s many permutations. At each turn, the local economy swelled or contracted, forcing many commentators to ask “how green is our Valley?” But what has seemed constant through all these ups and downs was our faith in our human capital – that they would always be there. That the oldtimers would never leave, and that the newcomers would keep on coming.

The past few years have tested that assumption. It was not so long ago that the Valley experienced its first serious xenophobic epidemic, with the arrival of many Asian nationals on H1 visas to fill the big labor gaps in technical markets. Now many of the same people are worried that jobs are going overseas, to the same talented engineers but in their countries of origin. And perhaps for the first time, the libertarian soul of many Valley citizens may be straying from the faith: many are asking whether we need a “policy” to deal with health of the U.S. economy.

But the question, of course, is what’s the right policy for replenishing our Valley? I’d wager that the Valley will always to too libertarian to lean toward a government solution. But for the first time, the Valley may be forced to seek a communitarian solution for attracting the people that matter most to the local economy – the talented, restless, spontaneously socializing people who invent and reinvent out economy.

Were we a different people, of a different nature, perhaps we’d seize this awkward moment in global history by constructing a monument – one that attracts the people we most value. Unlike the French lady in the New York Harbor, the perennially bronze statue will be of uncertain origin, near-certain gender, but of definite sartorial style (t-short, blue jeans, Frisbee, iPod). He/she will appeal to the numerous geeks who dream about starting the next Google. And he/she will appeal to the rest of us who secretly harbor a geek within, and love the culture of the Valley. Whether this project ever gets funded (I’ll try), the Valley’s collective will can position him/her virtually on Sand Hill Road, the New York Harbor of our current fantasies. Next time you drive past that road on I-280, peer West and just try to imagine it.

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