In downtown San Jose, the cavernous, cool ZERO1 Garage is the conceptual epicenter for a wide-ranging art exhibition. Seeking Silicon Valley is an artistic exploration that includes 100 exhibits at 45 museums, galleries, and studios across the Bay Area.
Jaime Austin is one of the curators. Forty years ago, “Silicon Valley” referred to a small clutch of high tech companies in the Santa Clara Valley. Today? “It’s a network of freeways, a network of people, a network of technology, a network of companies and a network is something fairly abstract,” Austin says. “Silicon Valley, at least to me, is really more of an idea, than it is a place.”
Austin stands in front of what looks like a Bay Area public transit map — except the transit is anything but public. It’s a map of corporate bus routes that more than 44-thousand people use to commute to Google, Apple, Facebook and the like. The map (by Stamen Design of San Francisco) is jaw-dropping for its size and complexity — and for what it says about the way Silicon Valley has grown over the last 40 years.
“You know, the idea of San Francisco and Silicon Valley being two different types of cities with two different types of industry is no longer true. The greater San Francisco Bay Area is now interconnected. Because we really are one giant ecosystem.” Austin says.
That ecosystem is also one of the nation’s biggest economic drivers. Like it or not, Silicon Valley has a relationship to cultivate with government. Internet industry analyst and author Larry Downes says some of the most intractable political issues trickle down as big business problems across the world of High Tech. Take for instance, patent law.
“The patent system is utterly and completely broken,” Downes states flatly, “and I don’t know a single person in Silicon Valley, whether they’re a beneficiary or a victim — often both — who doesn’t think otherwise.”
Immigration law is another pain point. Downes points to one example: the best and brightest come here to California to study at our universities, up to the point they’re ready to start working here.
“That’s the moment at which we say ‘You have to leave the United States and go do it in another country.’ I mean, it’s insane!” he says.
More broadly, there’s a vast cultural gulf between Silicon Valley and Washington, DC. Even now, a dozen years into the 21st century, there are members of Congress who boast about how clueless they are.
Last year, Downes covered the debate over SOPA or the Stop Online Piracy Act, a Congressional measure stopped by an upswell of protest from people and companies concerned about its impacts on the digital realm. Many of those impacts were either unintended or not fully thought through. The bill was largely a creature of lobbyists for the entertainment industry, and many Congressmen were simply taken aback at the public response to the bill.
Downes was in the audience for the hearings. He was shocked at some of what he heard come out of the mouths of some representatives. “‘Well, I don’t really understand the Internet,’ or ‘Well, my daughter uses this device and it sounds very interesting.'” Downes pauses for effect.
“I mean, not only do they not understand these products that we build,” he says, “They don’t even feel compelled to pretend they understand the products!”
The way Downes sees it, government should just stay out of the way. “We built a government that couldn’t do things quickly, because we wanted to make sure that when government acted, it acted carefully and with due deliberation. Of course, that’s a terrible fit for businesses or for technologies that change every 12-18 months. The pace is such that everything you want government to do — even if they did it, it would be too late by the time it arrived.”
Downes recently articulated these views in a commentary for Forbes. But even he admits that what high tech companies want from government depends on what kind of high tech they do. A software developer working on a smart phone app may view government’s “help” more like interference. For companies in other tech industries — med tech, biotech, green tech, clean tech — the view may be quite different.
Priv Bradoo is co-founder of Blue Oak, a venture-capital funded start up that aims to tackle toxic e-waste by grabbing phones and laptops on their way to the landfills of Asia, then extracting the precious metals inside for sale. Sipping on a can of Red Bull in the dappled sunshine outside the company’s offices on Sandhill Road, Bradoo says “I don’t think the government’s in the business of picking winners, but it should be in the business of facilitating and improving and increasing the access to resources that aren’t easy to be funded using small private investment.”
Bradoo says her company would like to build one of their refineries in Southern California to do that extraction. The trouble is, labor, utilities and taxes are more expensive here than in other states. If state and local governments were to sweeten the deal, that might change the math.
“Absolutely. I think it all comes into what are the incentives for us to be here, versus somewhere else,” she says.
Because at some point, Bradoo’s going to have to make the case to her venture capitalists.
“From the investors perspective, that’s usually a big question,” she explains. “Is it going to take two years to put up? We’ve done as much as we can do without actually setting up a facility. Hopefully we can find places where it’s not going to be a problem, but it’s actually even the perception of a regulatory risk which can be a hinderance.”
Beyond that, Blue Oak is going to burn through its VC cash, and the firm will find itself competing for real — inside a system that essentially off-shores the human and environmental cost of e-waste to people in China and India.
Blue Oak Co-founder Bryce Goodman says it matters that the U.S. is not a signatory to the Basel Convention, an international anti-toxic waste dumping deal, and that we don’t mandate companies to take back used electronics on a nationwide basis. Without those kinds of policies, the volume isn’t there to make recycling much of a business proposition in the U.S.
“That’s one place where government can be a driver — is in providing some sort of guarantee for markets that we think are crucial and that won’t exist otherwise,” Goodman says.
Whether their business model relies on a tight relationship with government – or relies on government staying out of the way – one thing is for sure: Silicon Valley denizens don’t leave their relationships with government up to chance anymore. Big companies hire their own lobbyists. Little ones band together in collective lobbying associations, like EngineAdvocacy in San Francisco. This is, after all a democracy, and if you don’t participate, you don’t get a say in what happens.
According to the Center for Responsive Politics, the industry spent more than $120 million on lobbying in 2011 — twice as much as a decade ago.
Hear the radio version of this story on the California Report.
Read Rachael Myrow’s other stories about the intersection of government and Silicon Valley: