Silicon Valley is known for both unicorns and black swans. The term unicorn, initially coined by Aileen Lee describe $1 billion U.S based tech startups that have lasted for less than 10 years old. In fact, the ballooning value of unicorns is believed to be the reason behind the increasing market value of America’s corporate equity (Lee, 2013). The future of this trend is forecasted to create a macroeconomic landscape, creating a zero-interest rate economy that would salvage economies from the threat of recessions (Lee, 2013).
Black-swans on the other hand is a concept created by Nassim Nicholas Taleb. According to Taleb (2007), the black-swans are unknown events that have huge impact on the economy like the rise of Google and Apple, owing to the extraordinary exceptionality and unexpected success rate of these two startups. For instance, in less than 15 years, Google records revenue of about $40 billion with more than 50,000 employees (Taleb, 2007). Simply put, black swans are unusual natural disasters and successful tech companies are statistical outliers with an outstanding impact on the environment. While the Silicon Valley is the hub of tech startups, unlimited preservative and disruptive innovations owing to the surge of unicorns and black-swans. Many successful startups in the Silicon Valley attribute their success to a good working culture. While this is true, this paper seeks to look deeper into the political, social and economic ideas that have also shaped the culture of Silicon Valley today.
There is no doubt that the Silicon Valley is the desirable future and politicians are using this rhetoric, with mere mention of the term Silicon Valley or its metaphor, politicians are able to woe masses (Shapiro, 1985). While many in the Silicon Valley view the government as a force in accelerating innovation by funding different tech prototypes, it is important to realize the cracks and manipulation that exists in politics (between the democrats and Republicans) with each side supporting or using the Silicon Valley as a tool of manipulation and coercion for personal gains (Halpin and Nownes, 2021). Paradoxically, there is an existing gap between Silicon Valley and the international world, which absolves politicians’ political rhetoric of creating a Silicon Valley future and innovative culture.
Additionally, there are a lot of political ideas among tech gurus that affect Silicon Valley’s culture. For instance, according to the Brookings, global tech leaders are among leaders who have extreme beliefs with regards to immigration, free trade, and elimination of borders compared to the public as seen below.
With such extreme beliefs, it is no accident that there is a growing conflict between Silicon Valley and nationalist conservatives. While diversity is a major mission/culture that Silicon Valley advocates for, tech leaders of startups in the Silicon Valley are proving to be territorial about domestic industries, thus disrupting the Silicon Valley culture of integrating different cultures to yield different unique innovations (Harmes-Liedtke, 2007).
Internationalization of the Silicon Valley has been subject of discussion among many authors. Values of the Silicon Valley are echoed by various legislative acts like promotion of entrepreneurship, creation of hub spots to create new job opportunities and lessening of social protection (Jones and Sudlow, 2022). Among the countries that are on the front-line vouching for internationalization of the Silicon Valley is France. In fact, with this campaign, various analysts begun terming France as a start-up nation. Emmanuel Macron’s (France’s president) party even bears Silicon Valley’s metaphors ‘La République en marche’ which means the republic on the move, a term many believe is the logic behind Silicon Valley (Jones and Sudlow, 2022).
Besides the social idea of expanding the Silicon Valley beyond the American border, there are other social ideas that are also affecting Silicon Valley’s culture. One social idea is the rise of a shared eco-business model. With the social outcry of creating a safe and green environment, coupled with discussions on climate change, various tech-companies in the Silicon Valley have made it a point to ensure that their innovations are eco-friendly and sustainable.
Additionally, with the shift from physical to online shopping, many tech-related startups are incorporating such conveniences, including smart deliveries in a bit to retain their clients. This means that future tech giants/start-ups need to consider people’s needs in their innovations moving forward.
There is also the social aspect of companies having some sort of social responsibility to the community. With tech companies like Canva narrowing down to corporate social responsibility by ensuring founders of the company put their personal wealth towards charity and that they are committed towards ensuring net zero polluted environment (Metcaff and Moss, 2019). Other tech giants like Uber are being scrutinized over their failure to reduce pollution and congestion, including not considering workers’ rights while cashing in lots of profits annually (Metcaff and Moss, 2019).
Silicon Valley stands for a particular economic framework which supports creation of startup companies that start off from nothing and are elusive of the almighty ‘unicorn’ status. This means that valuation of the startup should be at least $1 billion.
Silicon Valley is considered to be an economy by itself. In fact, the first organizations in the Silicon Valley consisted of research labs and universities in line with the existing economy. Nevertheless, Silicon Valley also has other combined organizations that form an economy, termed as- differentia specifica of Silicon Valley (Pellow and Park, 2002).
A region’s economic power/prowess cannot be overlooked as a factor that builds or directly affects the Silicon Valley. This is because Silicon Valley is a region that was not only build through innovation but also through Americans taxes. This means that any shift in the economy directly affects working/operations of the Silicon Valley.
According to the Economist Silicon Valley is in search of economists for the sole reason of helping them solve business problems ranging from pricing to product development. Amazon and Uber are the leading employers of economists currently in 2022.
Economic alterations ranging from purposeful inflation emerging from wars, pandemics, rising interest rates and recessions all affect operations of the Silicon Valley. Such economic worries affect major tech companies like Google, Facebook, Twitter and Snapchat leading to drop in sales. This in turn leads to laying off of employees, crashing cryptocurrency, and altering tech stocks.
In fact, according to Davis et al., (2020), Silicon Valley is sensitive to economic shifts compared to other industries. This is because many tech companies in the Silicon Valley rely on easily accessible funding from the general economy in a bid to pursue their ambitions of generating revenue and profit.
In conclusion, it can be stated that Silicon Valley is not an isolated region, with factors like social, political and economic ideas affecting its culture. With surge of unicorns, super-unicorns and black-swans, there is increasing competition in upcoming startups to acquire such titles. This paper has discussed social ideas such as corporate social responsibility, online shopping/delivery, and need for an eco-business model that produces sustainable products/services. Political ideas that affect Silicon Valley’s culture include the technocracy existing among tech leaders that have them divided between republican and democrat ideologies concerning free trade, immigration, diversification and globalization of the Silicon Valley. With such division in the tech space, different tech companies thus side with their preferred political party and run their companies based on beliefs/culture of their political party. Lastly, economic ideas affecting Silicon Valley’s culture include the fact that Silicon Valley is dependent on the national economy, which includes issues like bank’s interest rate, fluctuation rate or unseen disasters like pandemics or wars that could lead to a recession. These economic ideas can either be natural disasters or man-made fluctuations that generally create an imbalance in the economy.
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