Recently I’ve been re-reading Peter Hall’s magisterial “Cities in Civilization.” It’s a huge doorstopper of a book, the majority of which is histories of cities’ Golden Ages. Artistic, technological, civic, and so on.
One of the histories is of Silicon Valley.
And if there is anything which is clear from that history it is that Silicon Valley could not exist if California allowed non-competes. Silicon Valley’s history is of people working for one firm, leaving and starting up a new company which directly competed with that firm. Fairchild Semiconductor was famous, or infamous for this, and among its children is the company Intel.
Non-competes are, well, non-competitive. The idea that someone should be locked out from doing what they know best just because it might hurt a previous employer is radically non-capitalistic.
Oh, there’s other stuff, of course. Like a lot of technological golden age cities, SV is a child of government and university. At the key stage of computer development, government was buying about half of all computers, and in effect paying the entire R&D budget of Silicon Valley. Likewise, without Stanford, there is no Silicon Valley.
But the engine that kept Silicon Valley going was that anyone could leave their current employer and start up a firm competing with them.
If your laws allow non-competes, you will not be the next Silicon Valley. Doesn’t mean you can’t be the next, say, Berlin (the core of the electrical revolution), or the next Detroit (er, back when that meant something good), but you won’t have what Silicon Valley did.
I do wonder, myself, if Silicon Valley can survive after having off-shored most of its production. Historically, that doesn’t tend to go very well. At first it doesn’t matter, as when Britain off-shored production to the US, and still produced the majority of new inventions. But eventually there is a drop off. Having the factory where the designers are seems to matter.
Perhaps that’s changed, but real change of fundamentals like that is rare.
We’ll see.
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