Nothing is more convincing as

by francine Hardaway on October 22, 2003

Nothing is more convincing as an indicator of how the high tech industry has changed than last week�s 60th Anniversary Gala for the American Electronic Association, its premier trade association.

I traveled to California from Arizona to attend, and when I arrived at the Fairmont I was completely alone. So during the reception, I wandered over to an exhibit put up by The Computer Museum. There was an Apple 2, an IBM PC, a TRS-80, a Commodore Pet. Most of those machines came out in the seventies, over twenty-five years ago. But they represented a mid-point, rather than a beginning�of the industry, which gave its first achievement awards in 1943 and counts among its awardees Robert Galvin of Motorola and several others known primarily for their work with radios and transistors. In fact, the invention of the transistor seemed to mark the actual beginning of �high technology.�

But rather than triumphant, this celebration seemed a little sad. One of the original founders of Fairchild was wheeled in by a nurse, his tuxedoed legs stretched uselessly out in front of him. �Look, these are your friends,� his female companioned said brightly. �This is your party. �

I�m not sure he recognized anyone, or even took in the occasion.

The room seemed divided into two camps: aging veterans, among them Regis McKenna, Andy Grove and former Secretary of Defense Bill Perry, who remembered the former glory days of innovation, invention and discovery, and younger people primarily involved in sales. For all the sense of discovery or innovation in the room, I might as well have been at a trade association for meat packers.

High tech is clearly a mature industry, and Silicon Valley is feeling the pain of people with a chronic disease.

While I was in the Valley, I also visited with a friend of mine who recently relocated to the Bay Area from Lake Tahoe. He recently attended the all-star �Silicon Valley 4.0� Conference co-sponsored by my old friends at Garage Technology Partners. Greg said that while there was a great cast of characters in attendance and at the podium, the consensus was that no one knew yet what version 4.0 of Silicon Valley would offer.

Some obvious changes:

There will no longer be companies hiring large teams of local engineers to develop software. Some jobs in our economy are gone, never to return. One partner in a large consulting firm has recently been re-assigned to outsource 4,000 of that company�s support jobs.

We will have to figure out what role we play in a distributed, global universe. Silicon Valley might provide the capital or the management for companies that actually produce products in other states where the cost of living is less expensive � or even in other countries. The Valley will still exist as a center of innovation because of the concentration of talent and capital � but it may no longer generate local employment as is did in the past.

Some very fine minds are at work on these problems. My common little mind says this represents opportunity for other states, regions, and countries. The aging of the electronics pioneers and the companies they founded is not unpredictable. It has happened in the food industry, the clothing industry, and the automobile industry, where maturing markets bring about consolidation and more predictable growth.

Which brings me right back to the book I am still reading: �The Gifts of Athena.� I�ve now finished a chapter on health, in which the author shows how knowledge � in this case the germ theory of disease � produced �recipes� � techniques and practices of cleaning house � that actually lowered mortality rates and extended life. Some of these techniques were high tech, such as pasteurizing milk, but others were not (cleaning the toilets and bathing the children).. The whole area of domestic science has probably done as much to advance society economically and improve quality of life as any invention of the Industrial Revolution.

So what�s the takeaway from the AEA Gala and its surrounding events? Knowledge is broad, discovery sometimes random. Economic development can come from anywhere. Even if semiconductor products are being manufactured in Malaysia and software is being developed in Pakistan, America can still be an economic powerhouse.

The most important thing we have is not our factories, which are perhaps unresponsive to changing conditions, but our minds and our educations. If we don’t nourish those, we may truly lose our position of world leadership.

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