Google Could Boost Silicon Valley

[intelliot]

The recent announcement of a $2.7 billion stock offering by search-engine giant Google is a much-needed boost to the Silicon Valley's struggling psyche.

After nearly four years of bankruptcies, the loss of more than 200,000 jobs and the slaughter of countless dreams of avarice, can the Google moment revive the valley's economy and restore its near-mythic standing in the high-tech world?

The initial public offering, or IPO, will create another tiny cadre of young multimillionaires, but it will not make it any easier for Silicon Valley to withstand a growing number of competitors, foreign and domestic.

This isn't to say that the valley's lease on high-tech pre-eminence will expire, or that it will become the 21st century's equivalent of the Rust Belt.

The region's residual technological prowess and financial resources are simply too great. What seems more likely is a slow, continual downsizing of its traditionally outsized role in the world's high-tech marketplace.

"Silicon Valley used to be the center of the galaxy in technology when there were fewer planets," said John Sien, a former high-level executive at Hewlett-Packard. "We controlled most of everything. Now that galaxy is distributed."

Sien contends that the valley is no longer at the core of the technology industry but has become more of a hub. The valley will continue to incubate new technological trends, serve as a media clearinghouse for the industry and be a prime source of funding for promising companies.

In short, its new role will be similar to what Wall Street does in finance and Hollywood in entertainment.

Yet it will not reclaim its former dominance in manufacturing and research and development. The bulk of new employment and many leading high-tech companies will be in such diverse locales as Arizona, the Great Plains, India and China.

The valley's competitive crisis grew largely out of its success.

Since the 1970s, the area between the San Francisco Peninsula and its southern suburbs has enjoyed rapid income and population growth. Some unanticipated effects developed. The transformation of a mostly rural area into a premier industrial region stimulated planners, entrepreneurs and investors to target high-technology development.

Thirty years ago, economic-development officials went after manufacturing giants such as General Motors. Today, they seek ways to synthesize the "elixir" that transformed the Silicon Valley into gold.

[jjpowers]

My read is that Google will have a minimal impact on the Valley employment numbers.
Their business is based more on hardrives than headcount.

JP