There is an old saying that what comes up must come down – eventually. Ontario boomed for 15 years and it hit a rough patch 18 months ago. Alberta boomed. Ireland outpaced the rest of the world for 20 years and now is struggling. Now we read that Silicon Valley is losing its edge.
What grinds my gears is when I hear people saying that Atlantic Canada was ‘buffered’ from the recession because of its ‘diversified’ economy. Nope. You can’t lose what you didn’t build in the first place.
You can read the full report on Silicon Valley here. I wouldn’t write the valley off just yet. Here is the patent filing data for the U.S. in 2008. Notice all the California cities on this list. Boise, Idaho is kind of out-of-place on that list it seems.
The interesting part of the article referenced above is that Silicon Valley is losing its edge to places like Huntsville, Alabama. Specifically, Huntsville is taking a greater share of federal procurement dollars while Silicon Valley is slipping. Huntsville taking on Silicon Valley. Who’d a thunk it?
One of my little pleasures in life is listening to music from the 1920s and 1930s. There’s a great song called “Alabamy Bound”. It goes a like this:
I’m Alabamy bound
They’ll be no heebie-jeebies hanging ’round
Just gave the meanest ticket man on earth
All I’m worth to put my tootsies in an upper berth
Just hear the choo-choo sound
I know that soon we’re gonna cover ground
And then I’ll holler so the world will know
Here I go, (repeat)
Better figure out what the Bammers are doing right.
I would hesitate to equate patents with innovation.
Patents do not always result in new products or services, nor are all innovations patentable. However, I’d expect that there would be a pretty good correlation between regions that have vibrant high-tech industries and patent generation. Huntsville has been a space sciences center (big federal R&D bucks) for a few decades; the wrapping up of the space shuttle program might have an adverse impact on that, but there is also a sizable IT industry there now as well.
What is often missed in economic analysis in the US is the power of specific congressmen and senators. I remember reading and hearing about this years ago, particularly when Newt Gingrich was going on the bandwagon about ‘political bailouts’ when he represents an area that almost solely exists because of federal investments in aerospace. There is a bit of that ‘hint’ where you mention that they are getting more ‘federal procurement dollars’, I remember reading about how congressmen with clout tended to be able to get much more federal funding than other districts.
Patents certainly don’t say everything, but they’re definitely a key ingredient, particularly in North American, and getting increasingly so. Patents are good indicators too in that you don’t necessarily need a lot of money, so even outside university and corporate research you can find a lot of innovation. For example, I replaced the resin in my water softener and while searching for information found a guy unaffiliated with any group who had the idea of using different sized resin grains and mixing them together in a certain proportion, then tested them all for the best outcome, then patented the ‘recipe’. You don’t need a PHD to do stuff like that, but you DO need to know how to get investors, how to sell internationally, etc. Most people haven’t the first idea, which is why so many ‘entrepreneurs’ are people opening scrapbooking stores or restaurants.