Experimentation grows as non-traditional companies move in; so does traffic.
Silicon Valley is changing again, this time in ways no one would have predicted a decade ago.
The Valley has a long history of reinventing itself, and to some extent redefining the boundaries of exactly what constitutes Silicon Valley. The core of the Valley started out producing electronic components primarily for the military and then large electronics companies in the 1970s. The actual term Silicon Valley was coined by Electronic News’ Don Hoefler in 1971.
The real growth, though, began in the 1980s with the shift to PCs and workstations, then to software from the mid-1980s to the mid-1990s, and then to dot-com startups prior to the 2001 bust. These businesses migrated from San Jose in the South Bay to San Francisco in the north Bay, almost like rock striations on the side of a cliff, with newcomers Google and Facebook settling squarely in the middle.
As most Valley residents well understand, business is good when roads are congested. Even carpool lanes are clogged these days. It generally takes twice as long to get to and from work as it did several years ago, and being late for meetings has become much more common.
Road traffic is expected to increase further as the IoE begins gaining ground, connecting everything from cars to home electronics. To take advantage of this shift, a new overlay is being added across all of these areas, filling in any available parcel of real estate that has been left untapped, or existing development that can be bought and razed to make way for new opportunities.
Most of the major car companies have established design centers in various parts of the Valley. Sony announced last month that it is moving all of its PlayStation operations to San Mateo, which is mid-Peninsula. Google and Apple are buying up real estate in the lower part of the Valley, ostensibly for connected car development.
What’s different this time is that companies are collaborating across all of these striations rather than creating new ones. The IoE and connected everything requires a mix of hardware (South Bay), software (Peninsula), big data analytics (San Francisco and scattered throughout the Valley), capital (Peninsula), and a fusion of ideas at conferences and trade shows, which are held almost daily from San Jose to San Francisco. Even companies with a historically narrow focus are expanding well beyond their roots, experimenting with new ideas that may or may not pay off.
This is an interesting twist for a number of reasons. There have been many highly publicized predictions about Silicon Valley’s increasing irrelevance or outright demise in the face of custom mixed-signal designs in Europe, a growing threat in Japan, and a wave of startup activity and investment in China and India. None of them has proven correct so far, and they are unlikely to be proven true in the next decade, no matter how much money is poured into startups and established companies in other regions. There are simply too many devices that need to be connected, too many pieces that need to be included in those devices, and too many business deals that are required to make that practical anywhere else.
The IoE is rapidly emerging as the glue that will hold all of these pieces together, but for that to be successful it needs a critical mass of different ideas and perspectives. And for better or worse, that will drive more growth in Silicon Valley proper and its neighboring areas as the next wave of innovation kicks into gear.