I recently saw the embedded video. It is a live discussion between Richard Branson and Elon Musk, including a bunch of random people for some reason. I guess it is supposed to be an advice seminar for aspiring entrepreneurs. In it, Musk gives us some gems for those thinking of starting a business in order to create a product or service like “it has to be a really good product or service”. A valuable insight.
The interesting bit, for me, started at 06:40. They are asked why entrepreneurialism is concentrated in a few places, chiefly Silicon Valley in the US and Israel. Musk’s response was that Silicon Valley “happens” to have a large concentration of the right kind of people. This is a very unsatisfying answer because it just begs a slight differently worded version of the same question. Why are they there? He then says that it could be that “awareness” of Silicon Valley, as a result of marketing, could give a disproportionate impression of its success or prominence, which is probably a fair point, but he goes on to moot that idea by admitting that Silicon Valley really is the best place in the world to set up a technology business because it has excellent infrastructure.
Both Musk and Branson go on to explain that governments should be doing specific things to protect emerging businesses from larger ones. So when asked “why is Silicon Valley in USA?” why is the real and obvious answer so elusive?
The reason Silicon Valley is in the US and not in Somalia is simple: The Pentagon.
WWII rearranged most of the planet. Many scientists fled Europe to either USA or Israel. For example before WWII the centre of the Mathematics world was a small town in Germany call Gottingen. Hitler shut it, and lots of other ‘Jewish Science’ centres, down during the “great purge”. Many academics relocated to USA to places like MIT.
At the end of the war the US had half the world’s wealth in its pockets. High level planners decided that the next phase of the US economy would be high technology. They knew it had to be publicly funded because the private sector could never afford the costs or tolerate the risks. They used fear of, firstly the Russian Hordes, later the Cold War, then drugs and eventually terrorism, to get the public to part with their money. The Pentagon then, and still does, funnel this cash into research.
All modern technology is based on Quantum Electro-Dynamics, which was incubated under the Manhattan Project. Computing and information theory came largely from wartime espionage and cryptography. These various wartime projects were extended, funded by the public. Projects that showed market potential would be later handed over to the private sector. Radio and telecoms, electronics, aerospace, computing… all wartime projects and all bedrocks of the modern economy.
I am not a world renowned researcher or captain of industry but it’s pretty easy to figure out. Why is it so hard for someone like Elon Musk not to grasp something so obvious? Or at least acknowledge the reasoning? Why is it that when asked what governments should do the answer is obviously ‘intervene’ (or don’t if they’re some form of anarcho-capitalist) but when the credit is to be allocated the answer is ‘the entrepreneurs’?
It’s telling that Musk is thought to be the inspiration for Iron Man (although I’m not sure if that’s technically possible as Iron Man was first released 8 years before he was born). Iron Man is the epitome of entrepreneurial fantasy. A multibillion dollar technology corporation built apparently entirely by 1 man.