Where is the heart of the technology industry?
The simple answer is “Silicon Valley,” a term that now generally means the San Francisco-San Jose-Oakland area of California. There are other options: The two largest public cloud providers, Microsoft and Amazon, are based in Washington state. Europe’s tech scene has been busy in recent years, meaning it cannot be ignored in such a conversation. And the combined technology industries of China and India form a block that bears material weight.
So there are contenders. But Silicon Valley has a historically central position in the tech industry – it’s a center of start-up and major corporate technology activity going back decades, a center that has been able to create a flywheel for venture capital. for investments and reinvestments that other markets are trying to emulate. Now perhaps the question is better phrased as not “where is the new center of technology”, but has the technology industry become so broad that it has no real gravity?
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To answer that question, we need to understand how Silicon Valley compares to the larger venture capital and startup market in the United States; if Silicon Valley really loses its dominance domestically, it certainly cannot claim an international title. But if Silicon Valley is still the top dog in the US, itself the top recipient of venture capital dollars, then maybe we’ll leave the Valley in the top spot for a while.
The question is not silent. Well-known investor and former SPAC booster Chamath Palihapitiya recently stirred the pot with the following:
Over time, I expect a more global tech industry to weaken Silicon Valley’s former hegemony as the birthplace for what’s next, and it will become more figurehead than anything else. But did that happen?
We decided to find out: What is the current ratio of dollars invested in the Valley compared to the rest of the nation, and how fast is that figure changing?
We collected data, parsed external definitions and came up with some sort of answer. Let’s have some fun!