Silicon Valley is known for Both Unicorns and Black swans. What Political, Social, and Economic Ideas Shape the Culture of Silicon Valley Today?
Silicon Valley is known for both unicorns and black swans. Businesses with a projected market cap of USD 1 billion or more that have been private, have gotten at least one investment round from institutional capital, and are not a segmental buyout of a listed corporation is referred to as “unicorns” (Brown & Wiles 2015). A well-functioning ecosystem, such as that of Silicon Valley, promotes its prosperity by helping businesses find seasoned VC investors to raise enough capital to become unicorns, which feeds a vicious cycle (Bock & Hackober, 2020). Additionally, it appears that while evaluating the assistance capability of a group, the scale of the startup and its maturity level are critical factors (Bock & Hackober, 2020). Unicorns are startup companies that have achieved a billion-dollar valuation, while black swans are companies that have achieved massive success despite being considered high-risk. Silicon Valley’s culture is shaped by many political, social, and economic ideas. Firstly, the area is known for its libertarianism, reflected in its laissez-faire attitude to business (Coren, 2019). Secondly, the Valley is home to many world-renowned universities, which helps attract top talent. Finally, the area has a history of risk-taking, which has led to a culture of innovation.
The “startup nation” concept is among the most significant political concepts influencing Silicon Valley culture. It is the idea that Silicon Valley is the ideal location for business startups worldwide.
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Politics and governmental organizations began to study unicorns’ evolution and movement patterns due to their recognition of the significance of this disruptive potential (Bock & Hackober, 2020). An atmosphere or ecosystem for startups that is thriving is driven by a plethora of fresh ideas (Audretsch, 2019). Web 2.0’s openness and networking capabilities can help rapid expansion, with repercussions for its operations on a global scale. Restrictions on its connections, particularly in policy discourses, the disparity between each geography, and failure to tailor various strategies to the circumstances of each nation. Silicon Valley has succeeded in alienating both political parties. “Today’s major internet giants have too much influence—too much authority over our economy, our society, and our democracy,” a democratic senator said on Medium about her plan to break up firms like Google, Facebook, and Apple.
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Invoking the new conservative battle cry, these two corporations, Google and Facebook, have been charged with “practising censorship and political partiality” most often when filtering threats and hate speech on their platforms). The Bayh-Dole Act was passed, and it not only fundamentally changed the function of universities but also allowed knowledge from academic research to go widely, spurring the creation of new businesses (Audretsch, 2019). The Bayh-Dole Act of 1980 was arguably the most creative law passed in America over the past 50 years (Audretsch, 2019; Mowery, 2005). This uncovered all the discoveries and inventions performed in laboratories across the United States using taxpayer funds, along with modifications in 1984 and augmentation in 1986. (Mowery, 2005). Above all, this one change in policy was crucial in halting America’s rapid decline into industrial obsolescence. Universities frequently made useful “inventions” in the technological and industrial domains, but most economically significant creations came from non-academic research. Industrial research, problem-solving, and development generally emphasized enterprises’ R&D activities in these industries, which were mostly concerned with gradual advancements (Mowery, 2005). University research improved our knowledge of basic physics, chemistry, experimentations, instrumentation, and innovative products that underlie manufacturing development and product development (Mowery, 2005). This opinion is reinforced by countless elements, including the obtainability of funding, the caliber of the labor force, and the innovation-friendly setting. Another political idea that shapes the culture of Silicon Valley is the idea of a ‘tech utopia.’ This is the belief that technology can create a utopia or a perfect society. This belief is based on the idea that technology can be used to solve problems traditionally seen as unsolvable, such as poverty, hunger, and disease. The idealist nature of the internet’s architects, who designed it to be free, transparent protocols, portable, expandable, and interoperable software and data, as well as to scale as it developed, is reflected in the open internet of Silicon Valley (O’Hara & Hall, 2018).
The culture of Silicon Valley is shaped by numerous social ideas, counting the belief that technology can resolve any problem and that disappointment is merely a stepping stone to success. This culture of risk-taking and innovation has led to development of some of the world’s most disruptive and game-changing technologies. The social ideas that shape the culture of Silicon Valley include the idea of the ‘meritocracy.’ This is the belief that the best and brightest should be rewarded for their talents, regardless of their social or economic background. This belief is based on the idea that merit, rather than social status or connections, should be the primary determinant of success. It is a starting point for research into the speculative materialities of the “innovation economy” and cultural oddities (Tarvainen, 2022). Startups profit meaningfully from a culture that inspires free thought and opinionates letdown as a teaching chance. Only 14% of businesses universally think their corporate strategies and process innovations are carefully coordinated, likened to 54% of Silicon Valley corporations, representing the implication of this alignment. However, in regards to CSR, worried and lonely persons are more inclined to spend hours browsing through their social media feeds, sharing pictures, and seeking approval from a few more “likes” from their “friends”; nevertheless, increased social media use leads to a rise in anxiety and isolation (Roberts, 2017).
The economic ideas that shape the culture of Silicon Valley include the idea of ‘disruptive innovation.’ It is the belief that new technologies and businesses can disrupt existing markets and create new ones. Marc Andreessen, a tech investor, responds to whether Silicon Valley is on the verge of another tech bubble by stating that valuations appear high but still foreseeing an increase in the number of billion-dollar tech firms. The nature valuations, the IT industry, and venture capital operate is such that almost all of it is an effort to find the 15 unicorn businesses each year. They will be the ones to reach $100 million in revenue, go public, and achieve valuations of $1 billion. More than 90% of all venture capital returns come from these businesses.
Significant Venture Capital (VC) investors in the Silicon Valley region are likely another factor influencing the post-money valuation levels (Bock & Hackober, 2020). They can participate in or lead multi-billion investment rounds because of their exceptionally high amounts of committed cash (Bock & Hackober, 2020). The belief is based on the idea that Silicon Valley is the best place in the world for entrepreneurs to create new technologies and businesses. High technology companies that are founded on the premise of a prospective innovation that is more revolutionary than gradual are at the center of the Silicon Valley model of entrepreneurship (Audretsch, 2019). R&D, or broadly, ideas developed in the structural setting of an established company or institution, like a university, provide opportunities to launch a new business (Audretsch, 2019). Since it appears to handle the social and economic problems brought on by globalization—the twin afflictions of economic malaise and rising joblessness brought on by a lack of competitiveness—the Silicon Valley entrepreneurship model is extremely alluring (Audretsch, 2019).
Combining top talent, risk-taking, and innovation has led numerous companies to achieve unprecedented success. Given the region’s reputation for libertarianism and its laissez-faire approach to business. One of the most important political ideas affecting Silicon Valley culture is the idea of a “startup country.” It is the notion that Silicon Valley is the best place in the world for business startups. The concept of “meritocracy” is one of the societal concepts that has influenced Silicon Valley culture.
References
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Brown, K. C., & Wiles, K. W. (2015). In Search of Unicorns: Private IPOs and the Changing Markets for Private Equity Investments and Corporate Control. Journal of Applied Corporate Finance, 27(3), 34–48.
Coren, M. J. (2019, April 29). Silicon Valley is a political force, or five of them. Quartz. https://qz.com/1605753/silicon-valley-politics-are-reshaping-the-democratic-party/
Mowery, D. C. (2005). The Bayh-Dole Act and High-Technology Entrepreneurship in U.S. Universities: Chicken, Egg, or Something Else? University Entrepreneurship and Technology Transfer, 16, 39–68. https://doi.org/10.1016/s1048-4736(05)16002-0
O’Hara, K., & Hall, W. (2018, December 7). Four Internets: The Geopolitics of Digital Governance. Centre for International Governance Innovation. https://www.cigionline.org/publications/four-internets-geopolitics-digital-governance/
Pahnke, A., & Welter, F. (2018). The German Mittelstand: antithesis to Silicon Valley entrepreneurship? Small Business Economics, 52(2), 345–358. https://doi.org/10.1007/s11187-018-0095-4
Roberts, R. (2017, April 18). A CSR agenda for Silicon Valley. Volans. https://medium.com/volans/a-csr-agenda-for-silicon-valley-a0ac56712e57
Startup Kosovo. (2020, November 27). Why Silicon Valley is a model entrepreneurship ecosystem. Startup Kosovo. https://startupkosovo.org/why-silicon-valley-is-a-model-entrepreneurship-ecosystem/
Tarvainen, A. (2022). Margaret O’Mara, The Code. Silicon Valley and the Remaking of America reviewed by Antti Tarvainen. Prometheus, 37(4), 371–381. https://doi.org/10.13169/prometheus.37.4.0371