Silicon Valley Will Never Be Detroit

    March 29, 2005

Steve Lohr’s article in the NY Times begs the question is Silicon Valley turning into Detroit? Especially when Goldman Sachs calls 2005’s IT growth at 4% and remarks …

… that “technology looks to be firmly in the cyclical category for now.”

This against the backdrop of PC Forum’s desert climes. The theme reached out to support new industries such as health care, education. Even so far as outer space. But that’s a good thing. When IT is only selling to IT, we know where that leads.

I read Steve’s article as the discovery of new markets fulfilled by bottom-up phenomena.

Another path for technology can be seen in the proliferation of new services and networks on the Web that are being built, largely from the ground up, by ordinary people. The information and images – the content, in media industry jargon – is supplied not by company-paid professionals but by communities of people who find the data useful. Those seeking a business in the phenomenon call this information user-generated content. Photos, event listings, blogs and wikis – Web sites that allow users to make their own entries – on every imaginable subject are all part of the trend.

There is mounting evidence that this grass-roots media hybrid is moving into the mainstream. Ross Mayfield, chief executive of Socialtext, reports rising demand for his start-up’s expertise in using wikis among large corporations like Nokia and Kodak. Last week, Yahoo announced that it had bought, a Web site where people store and share photos. Jerry Yang, a Yahoo founder, said candidly, “We are venturing boldly, and somewhat blindly, into this world of user-generated content.”

I’m not sure there is any other way. Outer space is a big place, and colonizing the martians is futile. But back to Detroit, not that there is anything wrong with the city.

Here is a way of thinking about economic geography. Other regions may have been positioned for trade, produced efficiently, financed trade or produced means for transport. But have other regions provided this plus produced goods that enabled others to produce with such economies?

In other words, past revolutions produced for others to consume, but net net, we produce so others can produce. Naturally technologies diffuse until they become infrastructure, but are social infrastructure a fundamentally different economic input?

Source: Is Silicon Valley Similar to Detroit?

Ross Mayfield is CEO and co-founder of Socialtext, an emerging provider of Enterprise Social Software that dramatically increases group productivity and develops a group memory.

He also writes Ross Mayfield’s Weblog which focuses on markets, technology and musings.