Innovation is not only about technology. Far from it. But among innovators Silicon Valley enjoys a mythical status. The region south of San Francisco is home to some of the leading companies in tech sectors such as semiconductors (Intel), computers and devices (HP, Sun, Apple, Palm), software (Oracle) and the Internet (Yahoo, Google, eBay, Cisco) and to a unique culture of innovation. In the Valley, "what's next" is breakfast topic, along with "how to make it big"; entrepreneurs start companies with the intent to change the world.
During a trip a few months ago I went to see the small garage where Bill Hewlett and David Packard in 1939 built their first products, starting the partnership that would become Hewlett-Packard, one of the most symbolic companies in the history of digital technology.
It's a small wooden shed tucked behind a house at 367 Addison Avenue, in the town of Palo Alto. A dozen square meters, just the space for a car. When I visited, the garage was under restoration (picture right - the image on the left shows its original state). It has become a tourist attraction and an icon of the entrepreneurial culture of Silicon Valley, which many governments around the world, including the Swiss, have tried to replicate. With debatable success.
Visiting 367 Addison reminded me of a story that I'd heard from Xavier Comtesse of the think-tank Avenir Suisse. It goes like this: a Trade minister of a European country is sent on a mission to Silicon Valley to study its secret sauce. He travels there, goes places, meets people, and travels back. At the next meeting his colleagues question him:
"So, did you find out why they're so dynamic?"
"Yes", he replies. "It's actually quite easy: we should invest in garages, because most of Silicon Valley's companies have been started in a garage!"
In fact, the minister has a point: Hewlett and Packard created HP, and Steve Jobs and Steve Wozniak started Apple in a garage. More recently, Sergey Brin and Larry Page of Google ran the first iteration of their search engine out of a garage in Menlo Park, where they worked with the company's first employee, Craig Silverstein; Jerry Yang and David Filo started Yahoo in their dorm room at Stanford University. Other examples abound.
The minister's story, as told by Comtesse, is of course a joke. However, it is one of those jokes that convey a lot of truth. Because in the last decade or so, all across Europe, in the attempt to stimulate the creation of innovative entreprises, many goverments have followed the logic of the minister's story and invested (and keep doing so) in garages. Magnificent, luxurious, expensive structures, with names like "technoparks" or "incubators", but in essence garages: investments that seek to solve a non-existing "square meter" issue rather than seriously confronting the real problems entrepreneurs have to face, trying to make their life easier, and help transform their energy and creativity into something customers may pay for.
Of all the defining traits of Silicon Valley that have been studied and imitated, perhaps the crucial one seems to have eluded most: Innovation remains new only for a short period of time.
Transforming it into value, jobs and wealth requires putting ideas to test quickly, compressing the product development cycle and the time to market, and facilitating a company's growth. Rather than worry about providing would-be entrepreneurs with the perfect office space, the whole Silicon Valley ecosystem (comprised of researchers, technologists, designers, managers, manufacturers, marketeers, investors, lawyers) is geared towards speed.
That's how the intuition of two students about a better way to retrieve information from the Internet can become in a few years a company – Google - with 5 billion dollars in revenues, thousands of employees, and more (fast) growth ahead. That's what the rest of the world should aim for. Because innovation remains new only for a short time. And that timespan keeps getting shorter.
(First published in the introductory section of the Swiss Innovation Yearbook, March 2006)