Thread by @sahrizv

From Silicon Valley to a Bonsai Garden - thoughts on terraforming innovation in a tech first world.

Silicon Valley became what it did because of one simple reason: the enormous spending power of the booming US economy. I think every other aspect - capital, risk taking, talent - although undeniably important, was a consequence of that powerful and reassuring market force.

This enormous spending power was previously wielded by the the US Department of Defence, something which gave birth to Silicon Valley in the first place.

If other governments want to replicate a Silicon Valley like innovation machine, they'll have to guarantee a prosperous future to everyone who is part of their market- a tough task, I concede, especially now, when things seem to be falling apart.

A government can, however, guarantee a prosperous future to some players in the market. These state backed(overt or covert) players can then wield substantial spending power and result in effective innovative machines like Silicon Valley - with one key difference: limited impact.

The resulting innovation ecosystem will be focused around the business goals of the parent enterprises. The problem with this slight deviation from the prototypical Valley is that Tech superiority cannot sustain itself without a free market and competition.

Some would say that companies like India's Reliance JIO and pretty much every major tech company in China are examples of this approach. These are giant trees of limited variety, but there is no forest in the Valley, so to speak.

In the absence of any efforts to facilitate a Valley like ecosystem, the default rules apply: the market is free, but the capital is cautious, the talent timid and risk taking restrained. This results in original innovation: companies that solve important problems well.

Companies that solve important problems - but which, crucially, cannot scale. They sit in a tech "park" waiting to one day be implanted at a megacorp, thus with limited terminal impact.

And thus instead of a Silicon Valley, what we end up with is this: a Bonsai Garden™.

If we consider, however, Silicon Valley to be just one of the playbooks to Tech domination then the future looks much better.
For example, competition fuelled growth in a high spending power, high population market.

A huge user base accumulating spending power can lead such companies to a break out event. They are fit and competitive, even globally.
Such companies will be the best hope for a Tech first world and will share the burden of geopolitics with the State.