Fostering Growth
Buried in a book (Micklethwait, 144-146) on the history of the corporation is a very good description of what makes Silicon Valley - and now the world tech community - so strong and resilient. Micklethwait identified four key points:
Silicon Valley products were miniaturized with ever more computing power. The introduction of the Internet reduced transaction costs across the economy.
Silicon Valley corporations relied on creative destruction. Some failed, but out of them came new companies. Shockley begot Fairchild begot Intel. Those new company's leaped into profitability: they were gazelles. The American mores of failure toleration, treachery acceptance and attitude were clear. They dumped ties and suits - and last names - even back in the fifties.
The Silicon Valley model has spurred looser hierarchies all over the world. More and more economies rely on gazelle firms. Alliances, partnerships, joint ventures, and franchises are universal.
Finally, all efforts to create state companies are failing. States are concentrating on fostering entrepreneural clusters with their fierce competitors.
Reference
Micklethwait, John and Adrian Wooldridge. The Company. A Short History of a Revolutionary Idea. A Modern Library Chronicles Book. The Modern Library. 2003.