Silicon Valley: from heroes to zeroes?

Sunday 29 October, 17:3018:45, Frobisher Auditorium 2Economy

Not that long ago, Silicon Valley was regarded as the global hub of entrepreneurship, creativity and innovation. This was where most of the world’s best new technologies and businesses were originating, making things and providing services that were improving all our lives. Yet today, Silicon Valley is under attack from all sides. Its tech companies seem to have become the twenty-first century equivalent of the robber barons: only out for themselves, fleecing their customers, evading their taxes, and maximising their fat, near-monopoly profits.

For all the beanbags, meditation rooms and pizzas that we hear some firms provide their workers, others, not least Uber and similar pioneers of the ‘sharing’ economy, are criticised for poor working conditions: long hours, low pay, and claims of verbal and sexual harassment by senior managers. And even those companies that pay some employees well don’t avoid indictment: these ones are said to be fuelling inequality and exacerbating social disconnection. For example, AirBnB has been accused of pricing locals out of home ownership.

There is also the wider perception of the joblessness coming out of the Valley. Companies there are attacked for providing too few secure domestic jobs, since they outsource much of their work abroad to low-wage economies, or create mostly insecure contract work in the precarious ‘gig’ economy. On top of this, there is the fear of the long-term unemployment that their technologies threaten, as artificial intelligence and robots take away our jobs.

Then there are the fraught issues of privacy, trust, freedom and censorship. Are the Valley’s new-media firms abusing their access to our data? Are they too interested in selling information about us and gaining advertising revenues rather than taking responsibility for promoting ‘fake news’, hate speech, horrific images and terrorist manuals? Alternatively, are they arrogantly setting themselves up as the unaccountable gatekeepers of what we should be free to see and say?

Others think Silicon Valley has long lost its creative edge. Paypal founder Peter Thiel has complained that Silicon Valley entrepreneurs now seem inclined towards ‘incrementalist’ improvements rather than solving societal challenges requiring radical new science and technology. Professor Mariana Mazzucato goes further and questions if Silicon Valley ever was an exemplar of private-sector dynamism. She argues that the success of many of its firms owed much more to the American ‘entrepreneurial state’ and public funded innovation than to the free market.

Has Silicon Valley lost its way? Or was it never as creative and innovative as initially thought? Alternatively, is the criticism mostly unfair? After all, Silicon Valley firms are investing in new technologies, including autonomous vehicles, high-speed transport innovations like Hyperloop, renewable energy and biotech. Has Silicon Valley become a convenient scapegoat for other social and economic ills? Are its big name firms casualties of an anti-business perspective that is uncomfortable with change and risk-taking? Wouldn’t we, and the rest of the world, gain if Silicon Valley companies were much more innovative and disruptive?