Mangesh G. Korgaonker
The 'Silicon Valley phenomenon' is characterised by the continuous creation and development of high technology firms (those dedicated to the design and production of new products or processes through the systematic application of scientific knowledge and the most advanced technologies). The firms have a high proportion of scientists and engineers (at least 40 per cent) and a large expenditure in research and development (R&D). The Silicon Valley phenomenon is founded on certain critical ingredients: a nearby first-rank university (Stanford); the creation of one of the first industrial and technology parks in the United States; having an abundant supply of cheap migrant labour; having an abundant supply of venture capital from private capital investment firms and military institutions; and having a pleasant natural and cultural environment.
Is Silicon Valley a replicable model? Arguably, it is the most successful innovative environment in history, but even in the United States replication has not been at all easy or assured. Many Silicon Valley clones have discovered that creating a local company incubator is harder than it looks. It takes a unique combination of entrepreneurial personalities, venture capital, smart investors, and a business community that supports entrepreneurship through a matrix of suppliers, consultants or service companies. These ingredients are not available in many technological enclaves.
In the Asia Pacific region, there is a also a need to distinguish between the universal spread of innovative capacity, the spread of high-tech production sites and the ensuing growth of cross-border production networks throughout the region. It could be argued that the spread of production sites will depend on the 'de-verticalisation' of production processes and the resulting formation of inter-plant networks in localities where multinational corporations (MNCs) have an established presence. These local networks, often dubbed 'small-scale Silicon valleys', could resemble the networks that spontaneously developed in Silicon Valley and constituted the framework for the spurt in the area's innovation and production potential.