Around the globe, new 'Silicon Valleys' emerge
As software jobs move to India and beyond, California could lose its footing as tech startup capital of the world.
SANTA CLARA, CALIF.
Every so often, Walter Wilson wonders if he should become a plumber.Skip to next paragraph
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It's not that he is repressing a deep affection for S-traps or porcelain fixtures. Rather, it's the fact that, to him, the Silicon Valley of old is dead.
Just a few years ago, he was a star of the silicon revolution. As a software developer, Mr. Wilson was such a precious commodity that tech companies pleaded for Congress to let in more of his foreign colleagues to meet what seemed a bottomless demand. Now, however, Wilson can't find a steady job.
The collapse of the tech economy hurt, to be sure. But that's not what has him daydreaming of sink snakes. He's been pushed to his financial edge because, increasingly, jobs like his are being sent to India.
For years, companies from carmakers to telemarketers have cut costs by replacing American workers with cheaper employees based abroad - and tech companies have been no different. But Silicon Valley had always stopped short of sending its high-skill research and design jobs abroad.
Now that it, too, has joined the trend toward outsourcing, Silicon Valley's future as the lodestar of the tech universe is at stake. For the moment it means that many workers will need to reinvent themselves or relocate.
More deeply, though, it points toward a new kaleidoscope of "Silicon Valleys" worldwide, as foreign engineers now doing the work of Silicon Valley corporations spin off to form their own startups.
It is the same pattern that helped create Silicon Valley's unique startup culture, as young designers at firms such as Hewlett-Packard and IBM broke away to set up their own businesses. Now, the tech industry's desire for cheaper labor is sowing these seeds around the globe.
"We're seeing a fundamental shift," says Jim Koch, director of the Center for Science, Technology, and Society at Santa Clara University. "Innovation is becoming a truly global phenomenon."
That is partly the result of economic necessity. The legendary excess of the late 1990s has been followed by a new frugality in which investors and venture capitalists actually expect a profit.
One of the surest responses has been to cut payroll costs by hiring overseas workers - even in high-skill, high-paying jobs like software design.
Ironically, though, the shift is possible because of the success of Silicon Valley's Internet revolution. Many of the foreign workers brought in during the boom have returned to their home countries with a new level of expertise. And perhaps more important, the advances of recent years have reshaped the global communication network through the Internet, telecommunications, and wireless net- works.
Indeed, in typical Silicon Valley fashion, when Vic Kulkarni considers the fate of the cradle of the tech world, he takes the idea a step further and suggests that the very notion of Silicon Valley is becoming outdated.
"Wherever there is talent, we want to go," says the president of Sequence Design, a company that produces software to design computer chips. "Only time zones are boundaries in my head anymore. There are no geographical boundaries."