The Silicon Valley Challenge (eBook)

The reluctant capital

Silicon Valley is a powerhouse that controls the world’s knowledge, but those at the center of the Internet prefer to deny their own importance. The most powerful valley in the world looks like provincial suburbia.

We want to find out how the Valley, which could not be more inconspicuous, is changing our lives. It is February 12, 2013, and we’ve been sitting on the airplane from Berlin via Zurich to San Francisco for 13 hours. As the children sleep with their heads on our knees, Silicon Valley emerges into view. I am gazing out the window as we dive into the thick cumulus clouds over the Golden Gate Bridge. I have been here half a dozen times in the past decade, but the suburban character of this area never ceases to amaze me. I do not mean that the landscape is dull. In fact, it is grandiose. Spectacular even. Few places on Earth are more beautiful, but the buildings are uninspiring. Nothing has changed since my last visit. Boring. Yawn! The Valley is a world power on Valium, a power center hiding under an invisibility cloak.

There is no sign of global corporations, factories or research labs. You would think that the Valley would look totally different than it does. The home of Google should appear powerful, important and influential; but that is not the case. There are no high-rise buildings, industrial zones or villas with gigantic gardens. The tightly run Internet corporations, respected for their power to transform the rest of the world into defenseless digital colonies, are sitting in cardboard boxes made of concrete. Billions of people are being led into electronic dependence by these corporations, but why is it being done in such impersonal office parks? Don’t they get bored in there? If this is supposed to be the Rome of the Internet age, why doesn’t anyone build a capital? People say that building high rises in earthquake country is foolish, but San Francisco has done it, so why is the tallest building in Palo Alto only twelve stories high? That’s how high the entry halls in New York are for companies that don’t earn a thousandth of what Silicon Valley companies bring in. There are as many millionaires and billionaires in this tiny area of California than anywhere else in the United States, so why don’t they build pools in their backyards? To be fair, some do, but most choose not to. Why can’t the city planners come up with a better street grid than the ubiquitous checkerboard given the astounding spirit and genius that flows into the design of Apple’s products? On the way to San Francisco, our Airbus makes a 180-degree curve over Palo Alto, just as every other airplane does. The plane veers steeply on my side, and outside the window, there is this strange flat little town. Architecture students do not need to come here, but media managers do.

Silicon Valley is not even a real valley. The name itself is misleading. The Pacific lies to the west, and there are surprisingly few beaches along the coastline, but the Valley more than makes up for this in steep cliffs and a wooded ridge that slopes upwards, which is considered the western boundary of the »valley.« Placed under protection as a nature conservancy, it is sparsely populated. Half of Silicon Valley is more or less a jungle. There is no elevation east of the Valley. The flank of the hill slopes gently downward to San Francisco Bay. The mountains reappear 20 miles behind it, far beyond the other side of the bay. »Valley« sounds better than »hill flank«, which is what it actually is. The alleged Valley is 50 miles long and 20 miles wide. Ten miles of it are forest and grasslands, and only ten miles can be considered civilization. The whole area is barely larger than Berlin.

The poet Durs Grünbein once described California as the last speck of the West before the East begins. Airplane pilots must pay attention to their steering wheel if they don’t want to fly past Silicon Valley. One minute too long, and the plane will have already passed over. Our Swiss plane lowers its landing gear and rumbles above the small homes and flat office quarters of Menlo Park, a little town north of Palo Alto. In 2014, 26 billion dollars of venture capital will be invested here in the epicenter of the Venture Capital industry. Facebook even has its headquarters here.

According to a study, if the Internet were a country, within four years, it would economically outstrip every other nation in the world except for four countries. However, it cannot finance a real capital city, even though five of the six most visited websites in the world are based there: Facebook, Google, YouTube (owned by Google), Yahoo! and Wikipedia. The sixth website is based in China. Nevertheless, you will search in vain for any sign of grandeur. When you fly to New York, the skyline alone tells you how rich and powerful Manhattan is. New Yorkers flaunt what they have, and take pride in their self-confidence. Any city that has taller skyscrapers is a thorn in New York’s side. Los Angeles is also not known for its modesty. From an airplane window over LA, visitors behold wealth and luxury in the form of thousands of swimming pools stretching as far as the eye can see. By contrast, radical humility is the name of the game in Silicon Valley. From the sky, it reminds me of a small garden colony. Nothing stands out, and everything is in hiding, but the 21st century is being driven from here. Massive streams of money and data flow here from the digital economy. Never before have there been so few people who have owned so much information about everyone else in the world. And yet, Silicon Valley makes itself small. Coincidence or method?

San Francisco, located at the tip of a peninsula lying between the Pacific Ocean and the San Francico Bay, is a respectable metropolis, but in terms of population and surface area, it is smaller than Munich. The city also does not belong to Silicon Valley. The Valley, strictly speaking, consists of charming little towns with Spanish or dreamy-sounding names like San Carlos, Palo Alto, Mountain View and Cupertino, along with an ugly, tattered city named San José. With the exception of San José, the towns are of little importance. They would have remained insignificant were it not for the high-tech industry, which has come to be a godsend. These towns are tiny specks that have become home to world powers, including Oracle, Apple, Google, Intel and Stanford. In a way, these towns are delivering the dream of every ambitious mayor on the planet.

German companies like BMW, Audi, Volkswagen, Mercedes, Bosch, BASF and Lufthansa fear this area. Some of them have even set up major research centers here as a precaution. Angela Merkel, the German Chancellor, warned that Germany’s proud industries would soon be made obsolete by this former fruit orchard, which is all that Silicon Valley was until after the Second World War. Is this sounding of the alarm an exaggerated response or a legitimate concern? The heart of the Internet began beating in sleepy suburbs. Hewlett-Packard, Google and Apple were founded in places that are decidedly boring. Idyllic surroundings, yes, but they are utterly banal in terms of urban planning.

Our three children – aged eight, six and three – will attend the German school in Mountain View. German International School of Silicon Valley, GISSV, is located right beside the Google headquarters and the NASA Research Center. The parents of their classmates work for tech companies whose logos are recognized by every child in the country. Soon, our six-year-old son will think I work for Apple, as Apple is the brand of all my computers and phones. None of the other dads work for a publisher, namely because publishing companies are considered obsolete. They are seen as dinosaurs that never truly grasped the Internet. The big money is in platforms, not with the services themselves. Silicon Valley sees itself as a modern answer to the Industrial Age: production is out, information is in.

»A journey in search of the future,« wrote the media as we departed from Berlin. The media took interest, as it was unusual for a publishing company to investigate technology in Silicon Valley. Most other publishers tend to ignore technology as much as possible. What the media described as a »search for the future«, we prefer to see as a journey that will help get Europe back up to speed. For every General Electric, there was a Siemens in Germany; for every IBM, a Nixdorf; for every Kodak, an Agfa; for every Pfizer, a Hoechst; for every Sony and Samsung, a Telefunken, Grundig or Loewe. However, since the rise of digitalization, Germany has fallen behind, despite being a model country for decades. The Germans are ill at ease with the Internet. »Uncharted territory,« Angela Merkel somewhat clumsily dubbed the Internet, but she was spot on. The Internet is now roughly 30 years old, but the Germans have yet to discover a deep love for it.

SAP, Germany’s most recent international computer success story, was founded in the 1970s. With the exception of the network service provider United Internet, no major success in the Internet era has been based in Germany, and even United Internet has remained a mostly regional phenomenon. Germany was years late in recognizing the leading technology trends, from the search engine and social networking to the smartphone revolution. What are Californians doing better than Germans? Why are they able to attract so much talent? How did they get so innovative? Why are they so fast? For publishers, this is a vital question. Although they launched their websites in 1994, or...