

Michigan: The dark ages - cwan
http://www.economist.com/world/unitedstates/displayStory.cfm?story_id=15271063

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rmason
The government here has focused on raising taxes, putting off fixes on the
budget until tomorrow which never comes.

The infrastructure is allowed to erode and this last year $175 per pupil was
cut from education. They won't even plow the snow on weekends due to budget
problems.

Jobs are to be created not by private industry, but by the State. Sound
familiar?

In Michigan we know that goverment creation of jobs doesn't work. The nation
as a whole has yet to learn that valuable lesson.

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nostrademons
It makes me wonder if this will be Silicon Valley in 50-70 years.

~~~
hga
I think it'll be harder to kill of what Silicon Valley has become than what
Michigan was:

Michigan was for at least a couple of periods (e.g. before the Great
Depression and after WWII when every industrialized consumer economy's
factories were largely destroyed, aside from Great Britain) a or the best
place in the world to build cars. It stopped being so due to bad management at
three companies and bad government at the national level (Wagner Act, CAFE).
It was (and maybe still is) a good place to design them, but that requires
good management (e.g. look at Toyota's sharp (for them) decline in quality,
mostly due to design errors).

California has worse government, which has killed the manufacturing part of
Silicon Valley (e.g. are there _any_ production fab lines still operating
there?), but I'm not sure its government can kill off the design part of
things. To do that it would have to make a middle class existence impossible.
And the very nature of SV companies makes it impossible for bad management to
kill the local part of its "industry".

~~~
nostrademons
But Detroit was much more than that in its heyday: it was a symbol of American
industrial might. The birthplace of the assembly line. The place where other
industries looked for process innovations. The biggest growth industry in
America. (If you look at which professions did well during the Depression,
"gas station attendant" and "automobile mechanic" were at the top of the
list.)

Much like how Silicon Valley is currently the symbol of American innovation.
The birthplace of the microprocessor. The place where other industries looked
for process innovations. The biggest growth industry in America. (If you look
at which professions did well during this recession, "Web Developer" and
"Software Engineer" are near the top of the list.)

Detroit didn't start out as 3 gigantic car companies with bad management.
Before WW2, there were literally _hundreds_ of automobile startups. Everybody
had an idea for how to build a better car. There's a nice long list of them on
Wikipedia:

[http://en.wikipedia.org/wiki/List_of_defunct_United_States_a...](http://en.wikipedia.org/wiki/List_of_defunct_United_States_automobile_manufacturers)

But eventually, most of them went bankrupt or were absorbed by the Big-3. And
that let the Big-3 get complacent, which let foreign competition kill them
(undoubtedly helped along by government). The same thing could easily happen
to SV's tech industry, given a period of consolidation.

A lot can happen in 50 years.

~~~
hga
Three words: "Barriers to entry."

Competitively manufacturing a car became a more and more expensive thing as
volume sales allowed steadily more serious tools and tooling to be applied to
the problem. Per unit design also became cheaper as volume rose.

As far as I can tell the barriers to entry in much/most/all but x86
processors??? of what Silicon Valley does are steadily dropping and look to
continue. The process of design also looks like it's getting
better/faster/cheaper for a whole bunch of reasons, and I doubt that happened
in a big way in the auto industry until CAD was adopted, by which point
Chrysler had probably bought AMC, finishing US car industry consolidation.

Consolidation is fine for an industry as long as it doesn't stop new companies
from forming and becoming successful.

And, hmmm, a note on the Big-3: how many of their competitors failed to exit
the singularity of WWII? All got converted to wartime production, did some not
bother to go back to cars and/or civilian trucks?

~~~
nostrademons
It depends a lot on what the dominant technologies are in 50 years.

It's non-trivial to become a big search engine like Google. It's non-trivial
to develop an image-editing program like PhotoShop. It's non-trivial to build
a language runtime and ecosystem like Java, or to set up a content network
like Yahoo, or to make scalable databases that run on all sorts of platforms
like Oracle.

Right now, there're lots of new markets being formed, which opens up room for
lots of new startups. But will those markets get consolidated into features of
big tech companies? Or will they continue to nurture small independent
players?

~~~
hga
Can you point to anything that indicates a consistent trend towards "big tech
companies", especially ones that stay successful for a long time? Relational
databases are the only one I can think of at the moment (Oracle, DB2 and SQL
Server being the Big-3 here). And note how people are using non-SQL databases
to get a lot of things done that were once the domain of relational databases.

(In the data warehouse/OLAP field, don't there continue to be a lot of small
and medium players?)

One thing I noted about Microsoft before the Ballmer era was that the secret
of Microsoft's success was consistently writing software that basically works.
Microsoft in large part "won" by default, too many of its competitors lost
that ability (and many would say Microsoft started losing it with Longhorn).

Let me explore this a bit more: I say that there's something fundamentally
different between the middle two companies/areas you cite and Oracle's with
databases. Oracle has a _large_ core of code _it_ has to keep working. If Sun
went poof, the Java ecosystem would continue without much pause. If/when Yahoo
goes poof, will anyone significantly outside of it _really_ care?

(I don't know enough about PhotoShop to comment on it, and while it's non-
trivial to become a big search engine, enough companies continue to try at
something like Google's scale (e.g. Yahoo, Microsoft ... and look at Wowd for
a disruptive attack on the problem) that I'm not too worried as of yet. Ah:
PhotoShop is a sticky application, switching to another vendor is expensive,
search is not. Advertising is in between.)

I think it's more than new markets. E.g. Java was aimed at one new market
(appliances), released for another (web browsers), but ended up being wildly
successful in the second oldest (data processing; only number crunching is
older ... and Sun is addressing that with Fortress in the Java ecosystem).

Search was not a new market when Google appeared on the scene, e.g. it
replaced AltaVista for me. This is a field where creative destruction can
renew a sector instead of just replacing it.

