The sun still shines down on the green-gold hills and flat, concreted plains of Silicon Valley. But while it's the same optimistic California sun in the same endlessly blue sky, it's definitely not the same Valley as two years ago.
The "correction", "recession", or whatever you're having yourself, continues to bite. There are the official statistics - unemployment rates are rising steeply in Santa Clara County, the heart of the Valley, up from 1.8 per cent in January 2001 to 7.6 per cent in July of this year. Then there are unofficial indicators, such as rents - down by a third in tech-heavy regions like the city of Sunnyvale and San Jose, say area residents. And of course the media continues to relish stories about reformed dotcommers, such as one in last week's San Francisco paper profiling a couple who are now cheerfully making and marketing a new range of barbecue sauces.
And the "property available" signs - unheard of in anyone's memory until the past two years - still dot the broad downhill sweep of Menlo Park's Sand Hill Road, the de facto and exclusive avenue of the venture capitalists. Not only are the offices of the formerly godlike financiers available, they are actually lying empty, as a driver (nobody walks down Sand Hill Road) can clearly see. Big vacant offices with pleasant views of the oak-covered hills that mostly belong to Stanford University, the biggest landholder in the region.
Stanford even seems to be biting the hand that feeds it, with area newspapers reporting a study by two researchers at Stanford's famed Graduate School of Business. They question the value of the once-vaunted MBA degree, for which students shell out as much as $100,000 (€102,000) over two years. After casting a cold eye on a decade of research they conclude that, perhaps with the exception of degrees from a tiny number of elite MBA programmes (Stanford included), the degrees have little use in the business world and have no effect on salaries in the long run.
They note in an article carried in the first issue of the journal Academy of Management Learning and Education that some 40 per cent of US chief executives discussed in a Fortune magazine piece titled "Why CEOs Fail" had MBAs. And they quote one report that describes the course at one leading business school as a two-year bonding and networking ritual centred around alcohol. Ouch!
As for Sand Hill's offices, perhaps they will revert back to the publishing companies that dominated the road in the 1970s, before an era in which even every American 12 year old knew that IPO stood for initial public offering. Or maybe now's the time to get your swishy address for the rebound, which people first believed in with gospel-thumping fervour but now speak of resignedly as of a once-lovely delusion.
Or maybe the road will never have quite the same resonance anyway and will welcome in the mixed bag of tenants these buildings had many, many years ago. Oracle founder and chief executive Larry Ellison rented one of its boxy offices when Oracle was little more than an idea, a bit of code, and a few sales people.
That's always the Valley dream - to throw in a blender a mix of code, brains, a bit of office space, a bit of cash to fuel the early days and, when that runs out, expense it on a personal credit card. With some talent and some luck what emerges is a rich, synergistic blend that is more than the cliché sum of its parts. Despite the downturn, that hasn't gone away, the belief in future possibility and a stubborn refusal to throw it all over merely because the economy doesn't match one's hopes.
Many of those who dream in this way are immigrants, especially the huge number of bright Indian and east and south-east Asian programmers who came to the Valley in the good times on coveted (and controversial) H1-B visas . These let what many in the Republic so shamefully scorn as "economic immigrants" fill the jobs that US citizens don't seem to want to do or, in the tech sector, to study to do.
The controversy over H1-Bs in the tech industry, which has been a major user of them, centres both on the fact that some US citizens might not get jobs because much cheaper imported labour is preferred by the big tech companies, and that the workers can be badly exploited before they are shunted back to their home countries at the visa's expiry.
But the general reality is that the visas become a foot in the door to US citizenship for many energetic and smart immigrants, whose sponsoring companies are eager to retain their skills and apply for citizenship on their behalf. That's helped make the Bay Area a more ethnically diverse region than the state of California as a whole, with major influxes from east and south-east Asia, according to new census statistics.
This influx has had an extraordinary effect on the Valley economy. Some 24 per cent of Silicon Valley technology companies are founded and run by Chinese and Indian chief executives. In 2001, 774 companies had Indians at the helm, and in 1998, 2001 were run by a Chinese chief executive. That translates into close to 60,000 jobs for the region, and a whopping 17 per cent, or $16 billion, of the sales produced by tech firms in the Valley. In addition, 32 per cent of the tech workforce, from technicians to programmers, are Indian or Asian. Lose those immigrants and the Valley would reel.
So hurrah for the economic immigrants. In the United States, from the days when such new arrivals were predominantly Irish, Italian and eastern European, to today, when they pour in from south and central America and the near and far East, such people gradually create their own economic engines or form a base of support for existing ones.
In the Republic, particularly with our tech-heavy economy, we ignore that lesson - and the tale of Silicon Valley's multiethnic success - at our future economic peril.
klillington@irish-times.ie weblog: http://radio.weblogs. com/0103966
