If there’s any company that defied all odds in the last five years, it would be Tesla Motors.
Silicon Valley is often seen as a bubble of people who think that every problem can be solved with technology. It’s created an enormous amount of wealth and capital, which has had mixed effects on different groups of people. What are the lessons we can take away from the last half century in Silicon Valley?
In 1957, eight employees of Shockley Semiconductor left their jobs to start their own company. Little did they know that their new company, Fairchild Semiconductor, marked the beginnings of an era that would transform the history of the universe. Even now, nearly sixty years later, Silicon Valley continues to thrive as the epicenter for technological innovation.
At its very core, the Silicon Valley mindset is nothing more than a 21st century view of the American Dream experienced from the perspective of technology. The idea of hard work and a meritocratic system spawns a culture of ambitious people spending every waking hour attempting to realize the dream. Like any industrial boom or gold rush of people chasing their American dream, some people will achieve their dreams, while others will spend their whole lives slaving away and never quite attaining it.
Techno-optimism, a phrase used to describe the mindset that the future is getting better due to the advances and application of technology in all industries, is epitomized in Peter Diamandis’s work such as the XPrize, Singularity University, and bestselling books Abundance and Bold. According to Diamandis, belief in techno-optimism is supported by the historical progress of technological advancements such as the progress evidenced by Moore’s law. Moore’s law, a principle coined by Gordon Moore (the founder of Intel and one of the eight founders of Fairchild), states that the number of transistors per square inch on integrated circuits doubles yearly.
Such exponential growth in areas of semiconductors has convinced many Silicon Valley minds that the world isn’t just getting better, it’s getting better exponentially. Technology is out to improve our world, and things will continue to get better as technology is applied to areas of everyday life and work that have historically been accomplished in other ways.
Herein lies Silicon Valley’s infamous approach to entrepreneurialism. To many people, the title ‘Silicon Valley’ conjures images of Steve Jobs starting Apple in his garage and the venture capital firms that make these startups possible. What has enabled Silicon Valley to be the epicenter of all the innovation is the attitude of techno-optimism that has inspired both entrepreneurs as well as venture capitalists. Together, both entrepreneurs and venture capitalists aspire to change the world, perpetuating a “go big or go home” mentality.
The allure of the Silicon Valley sounds something like this: “Come up with a crazy idea, implement it with technology, scale it and earn millions of dollars”. Combine that with the rich history of hundreds of companies coming out of Silicon Valley past and present, and we see why so many people are enamored with such ideals of meritocratic work. Just a little research around current startup investments reveals that valuations for startups have been through the roof lately, signaling for a very prosperous community. With Snapchat raising over $650 million and companies like WhatsApp being bought for $17 billion, it’s evident that there is a lot of capital and opportunity, at a volume that has never been seen before.
Where Techno-Optimism Falls Short
Although techno-optimism supports the continuing faith in technology to create a brighter future as it has been, critics will question if technology can provide the solution to every human problem. There are many problems that have hardly improved through improving technology. Technology has played a great role in solving many problems in areas such as telecommunications and digital entertainment, but has struggled to solve problems of social structure, education, gender equality, and more.
Critics will claim that Silicon Valley has created a culture that rewards workaholism, lacks interpersonal skills, overemphasizes technical ability, and is oriented toward solving minor first-world itches. They will use statistics to show that technology companies are still fundamentally racist and sexist, and tend to favor people who are already wealthy. These objections have very valid points, and are things that cannot be ignored.
Techno-optimism is a great mindset for founders, investors, and people with big ambitions to change the world through technology, but it often forgets about people outside of tech, who often make nowhere as much as the people inside. And when it remembers, it is often arrogant in its approach to solving problems.
An Educational Story
New York Times declared 2012 “The Year of the MOOC”. Positioned to completely revolutionize education, massive online open courses, MOOC for short, were being developed by a whole array of startups in the Silicon Valley. Advertising the ability for universal access and maximum flexibility and scalability, people everywhere began claiming that MOOCs would revolutionize education. Coursera, EdX, Udacity, Udemy, and Khan Academy were all bound to eliminate barriers of class and geography that kept people from getting an education. Education was just another billion-dollar market that would be disrupted by technology.
But it didn’t.
Just like radio, TV, YouTube, and other technologies that people believed would completely revolutionize education, MOOCs gained some traction, but failed to be as significant as people believed they would be. Education has been a field in which people have spent decades trying to innovate without much progress at all.
In fact, Steve Jobs himself brilliantly articulated the problem of technology in education.
“I used to think that technology could help education. I’ve probably spearheaded giving away more computer equipment to schools than anybody else on the planet. But I’ve had to come to the inevitable conclusion that the problem is not one that technology can hope to solve. What’s wrong with education cannot be fixed with technology. No amount of technology will make a dent.” – Steve Jobs
Fundamentally, the problems in our education systems are socioeconomic in nature. With students coming from the most disparate backgrounds possible, the United States (even more so in California) is faced with the challenge of educating students that come from the entire spectrum of socioeconomic backgrounds with one system. And unfortunately, as Silicon Valley continues trying to come up with technological solutions to improve education, we fail to understand the conclusion that Steve Jobs came to. We continue to believe that a new technological application will revolutionize learning, arrogantly putting technology in front of low-performing students whose families struggle to put food on the table.
And if that wasn’t enough, Silicon Valley tends to blame bureaucratic government systems for the lack of improvement in areas such as education, claiming that the education system would do better with less government intervention in a highly techno-libertarian spirit. Sure, government bureaucracy is unhelpful toward accomplishing progressive change in areas such as education, but the techno-libertarian arrogance exuded by many leaders in education technology can be equally unhelpful.
Social Castes in the Valley
At this point, we’ve followed the effects of techno-optimism to what is arguably the largest problem with Silicon Valley.
When Facebook IPO’d three years ago in May of 2012, it created a new billion-dollar company as well as a group of newly minted millionaires which further exacerbated strains of disparity in Palo Alto. East Palo Alto, bordered on the north by Facebook, on the south by Google, and to the West by Stanford, is home to some of the low-income families in the bay that are slowly being forced out by the ever-expanding tech companies and skyrocketing living costs.
Yet while this is a significant problem facing the Silicon Valley, it’s also not a problem that hasn’t received a large number of people attempting to create solutions. Even Mark Zuckerberg himself donated a large amount of time and money to help the under-privileged children of East Palo Alto. And even with problems beyond the Silicon Valley, we see efforts ranging from Facebook’s internet.org to Google’s Project Loon attempting to bring internet accessibility to the world.
While the standard of living in the area has generally increased overall, the rate of improvement for the middle and lower class is still slower than the rate at which the upper class is becoming wealthier, effectively creating an increasingly smaller middle class. For many people living next door to the wealthiest companies in the world, standards of living have not tangibly improved over the past half century.
This disparity between rich and poor creates a decrease in social mobility. Betting on the forces of capitalism and the free market to create the best product, Silicon Valley characterizes itself as a completely meritocratic culture in which anyone can create the next big thing, irrelevant of race, social status, or otherwise. But the diversity statistics paint a drastically different picture. The majority of tech is still covered by white males, often having come from upper or middle class backgrounds.
Sure, anyone can win at the game of entrepreneurship as long as they work hard enough, but fewer and fewer people are even being allowed to play the game. Without a middle class, how are people supposed to be able to rise to the top even if they do spend their whole lives diligently working?
Putting Down Our iPhones to See the Real Solutions
Collectively, Silicon Valley needs to realize that technology won’t solve every problem. While technology alone has solved some crucial problems, most of the technological disruptions that we can be so proud of have created new problems. Facebook may have superficially connected the world together, but it has also torn apart its own hometown. Apple may have thought differently, but it has also created a whole population of people that can’t see past their iPhones. Google may have created a better search, but it hasn’t helped us find better solutions to the same fundamental human problems.
Focusing solely on technology has brought the world into a new era, but until we shift our perception of technology away from the solution to every problem, we will be incapable of solving the next generation of problems.