While most of us struggle in the prolonged economic downturn, Silicon Valley goes from strength to strength. We talk to an author whose new book sets out to explain the secrets of its success.
It's tempting to think that nowhere and no one can escape the all-insinuating tentacles of the current global economic recession. But if a new book by an American former East Coaster turned Silicon Valley resident is to be taken at face value, then we may have found an enclave that bucks the trend. Deborah Perry Piscione was once an on-air political analyst bringing hard-nosed Washington spin to America. Now she is one of the most influential businesswomen in Silicon Valley. She wanted to find out what made the electronics-based industries of the West Coast tick. 'Secrets of Silicon Valley' presents her, at times deceptively straightforward, findings.
Perry Piscione, whose graduate work was in macroeconomics, says it always fascinated her that Silicon Valley did not experience what the rest of the world did and was largely unaffected by the typical economic indicators that were putting global business under stress. "It was a dichotomy. Yes there has been a pullback in terms of software sales that resulted in a certain amount of cutting back staff. But at the same time we saw a continuation of innovation and growth."
In describing what makes Silicon Valley immune to financial pressure, Perry Piscione talks frequently in biological terms. For her the Valley "incubates" innovation in an economic "ecosystem" where the future is "hatched". I ask her if this is merely a convenient way to describe the phenomenon, or whether there is any substance to the extended metaphor. "I think one of the reasons I got the go-ahead to write this book was the variety of things that created this continuum of innovation cycles, that enabled Silicon Valley to grow." She advises commentators not to think of it as being the product of the past "ten or 20 years. It dates back to the beginning of the 20th century with the precursors for television and radio. These technologies were not invented here, but they developed commercially here. Why did the success happen? That's what my book is about".
For Perry Piscione, success comes from innovation, and innovation comes from people. It's as simple as that. Coming from the East Coast she says that she was indoctrinated into a culture that withholds information. "In Washington information is power and you use it against your enemy when they are at their most vulnerable: you are trained to go for the jugular. But in Silicon Valley it is completely the reverse." She describes how moving to the West Coast gave her an "utter culture shock. People were open, trusting and nurturing. People never asked who you worked for, but how they could help you".
This atmosphere of collaboration is one of the secrets of success Perry Piscione's book unearths along with the revelation that people were prepared to "use their competitors to share information. I'm not going to say that all intellectual property is revealed, but there is a lot of sharing going on in such a way that it is almost as if you are getting your competitors to validate what you are working on. But the bottom line is that the success of the region is all about how this culture of openness permeates everything".
In other words San Francisco, despite the arrival of the digital revolution, has managed to cling onto the vestiges of its hippy ethos, repackaging itself in a version that brings goodwill to collaboration in technology "in order to get things done. Because value is placed on how smart and creative you are, you find there are people out here that are not just motivated by the big pay off". Of course, there are people in Silicon Valley whose success can be measured by colossal wealth, but according to Perry Piscione "it's not Wall Street. It's not driven by greed. It's driven by creativity. And innovative success".
Understanding the Valley
Perry Piscione is keen to stress that 'Secrets of Silicon Valley' is not just another management or business book. She ruefully accepts that it will inevitably be pigeonholed and "thrown into the business book category". But her motivation, she insists, is to show how a different lifestyle can produce a different order of doing things that eventually leads to a level of success that is able to withstand anything the global economic downturn can throw at it.
"If Silicon Valley is this unique slice of the world that I say it is, then it needs to be explored. How can it keep reinventing itself, moving from one innovation cycle to the next?" Her central argument is that you cannot understand the success without first reaching an understanding of how these people and companies operate. "My question to the East Coast companies is this: if you are satisfied with the way things are going, then fine. If not, you should read my book, because whether Silicon Valley is a mindset, or all about individuals that make up a company, these are things that can be easily applied to your company."
For all the economic theorising that fills newspapers in an attempt to define just what makes Silicone Valley tick, the great secret both behind the book and the phenomenon is the individual. We can look at the way in which Google creates a "colourful environment for the people who work for them. But that's not really what this is about. It's about thinking outside the box and debunking the myth of the way in which business is supposed to be conducted. When the rest of the world thinks about creating a business model, it will be related to generating revenue. But that's not how people think here". She explains how Google allows its people to work one day a week on whatever they want, giving creativity the freedom to nurture and develop ideas.
This in turn translates into the notion that the people of Silicon Valley work in much the same way as they want to live. "We're driven here very much by the outdoor lifestyle. And that doesn't stop at work. Employers take their staff hiking or biking or running." For Perry Piscione this is a major shift from the buttoned-up conventional commercial environment where business is routinely done in conference rooms or over dinner. "There's none of that here."
'Secrets of Silicon Valley' by Deborah Perry Piscione is published by Palgrave MacMillan, £17.99