….an idea, such as a new mobile media, you can pull together a team faster than any other place in the world. That's a product of learning in a community, and it's very hard to replicate.
In your mind, what comes close to Silicon Valley?
These new regions — Taiwan, Bangalore, Shanghai — are extensions of Silicon Valley. This happens from people with deep roots in Silicon Valley, and then they take with them elements of the Silicon Valley business model — the start-up culture, the venture capital, the idea of minimising hierarchy and creating more open organisations, which is often alien in places such as India and China. Those economies have been dominated by family-run firms or state-supported enterprises. And they're not creating head-on competitors to Silicon Valley; they're creating linked partners.
Those places look like hybrids, a cross between Silicon Valley and domestic institutions. They're similar, but they don't have the accumulated know-how and talent there.
We have tremendous assets here that we overlook — such as the US capital market, which allows investors to exit from deals quickly, and the US legal system, which is more reliable than the rest of the world. The technology capital of leading-edge researchers is still far ahead of other parts of the world.
Why do you think developing countries such as India and China shouldn't worry about brain drain, when their young people emigrate to the US to study and work in tech?
What we've learned is that, today, for the first time in history, the brain drain doesn't need to be a one-way process, largely because the technology created in Silicon Valley allows for much cheaper communication. You could have a team half in Taiwan, half here, and they could talk real-time over IM and it's cheap. It's easy both to travel and communicate across great distances.
It's really opened up for peripheral economies such as China and India because rather than simply losing their best and brightest — the old idea of brain drain — now those people come home to connect places such as India and China to a global technology production network.
Doesn't technology globalisation harm engineers in the US by taking away their jobs?
There is certainly some displacement in this process. It means US engineers need to have a more diverse skill set than they've had in the past. But labour markets in the last couple of years have tightened up again, meaning that now people who were displaced are being absorbed back into the market. That earlier job loss was not permanent.
All the low-end processing has moved to places such as India, but the US has been able to hold on to its advancement by defining new technologies, new architectures and new markets.
What would you advise engineers starting out today in the face of technology workforce globalisation?
I would advise them to be sure to get a broader training than simply programming and engineering. They need increasingly to have an understanding of working with multicultural teams and be able to understand the social components of the products they're developing.
If you're building a search engine today, you need to understand the human interaction with that search engine. In the second half of the 20th century, there was a technology push, and people didn't pay attention to the user. Today, you need to understand how people will react to the products.
What would you advise entrepreneurs starting out today about where to set up their companies?
Entrepreneurs should start companies in the market that they understand. If an entrepreneur is starting a business that will provide low-end handheld devices that will be used in China, then they should set up in China, and maybe do some research and development here.
The classic example, which was best based in the US, is the iPod. The price point is not accessible by people in developing economies. Doing the design, architecture and the customer interface is better near the final customers. But the components came from Taiwan, because there it's more efficient.
At Berkeley, you're helping to define and develop a new generation of information professionals. Who are these people?
It's not just about having technical skills anymore; it's about management and understanding customers better and developing products that meet and define new needs.
So the new generation of information professional understands software programming and back-end development, and they're trained in understanding the legal and business environment. They're required to take product management classes and social science, too. Ours is a very multidisciplinary programme — with connections to computer science, social science and anthropology, as well as the business school and the law school. We believe those types of people will add the most value in the coming decades.
