Why Silicon Valley is only part of California’s innovative success

California seems to be on a constant roller-coaster of events – technological, economic and social. Strangely enough, the state keeps moving on as the American epicentre of high-tech industry.

To technological entrepreneurs, California is synonymous with Silicon Valley, a place where brain-rich can become money-rich. To movie lovers, California is synonymous with Hollywood, where real life can become fantasy.

In the 1980s, Silicon Valley defined California’s economy in particular and America in general. It was the first time in the history of capitalism when the best brains made the most money. Inheritance was frowned upon as wealth based on sexual encounter was not very ‘cool’ unless one was from a royal family where snobbery and wealth function together as one. The emergence of Silicon Valley was the beginning of globalisation era. It was the place where scientific knowledge emerged as a critical factor in global economy.

Historically, California has produced microchips, freeways, blue jeans, extreme sports, smart-grids, Google search engines, iPhones, iPads and thousands of other gadgets. The state translates the Hollywood vision of success into reality. In fact, Californians boast that they are the leading investors in America’s future – economically, technologically and culturally. It is also known as the greenest and the most futuristic state in the United States.

The undisputed fact is that California is the heart of technological innovation in America – the Mecca of the high-tech, biotech and clean tech (green tech) industries. Global industrial experts tend to agree that California is the most dynamic place for industrial change on earth. From history their line of reasoning holds, but the future remains open to those who are ready to invent it.

According to the 2 November 2009 Time Magazine, in 2008 California attracted more venture capital than other states combined. It has nurtured Google, Apple, Hewlett-Packard, Facebook, Twitter, Disney, Cisco, Intel, eBay, YouTube, MySpace and countless companies that define how we do business and live.

Californians boast that if the state was a country, it would be a member of the G8 with a 38-million population and $1.8-trillion economy. What is amazing is that, despite being known for high-tech, it is also leading the country in agricultural production.

In the global economy, California comes strongly as a source of change and innovation, both incremental and radical. It is a place where status quo is on a constant challenge. Today, California is the source of new things: electric-vehicle start-up Tesla, organic food ventures, and other ventures like spaceX – the private rocket launching company. Simply put, California is the state of new ideas. Some ideas work and others do not. Technologically, it is the home of early adopters.

The California investors have the guts to invest in new technologies – perhaps because they have brainy geeks and smarter knowledge workers. Even politics is comparatively progressive in California. Its voters approved funds for stem-cell research, high-speed rail and state politicians adopted the nation’s green house-gas regulations, standards for automobile emission which have redefined the American energy debate.

California is where things that matter in technology and science are happening. It hosts one of the largest genomic laboratories of the world – where researchers are studying methods to convert algae into oil, coal into natural gas, and human waste water into electricity.

As a state, California has died and lived many times. As early as 1855, it was condemned as the land of gold and lawlessness. Even Time Magazine had published an issue on California called ‘the endangered dream’ in 1991 after the boom generated by aerospace and computer industries temporarily fizzled out in the early 1990s.

The solar business is not an eco-fantasy in California — solar roof-top installations having already reached 50 000. The state target is one million roof-top installations by 2017. Carbon emissions in California per capita are less than half the US average, and between 2006 and 2008, the state attracted $3 of every $5 invested in American clean tech industry. It is by far the national leader in green jobs, green patents and energy efficiency savings.

California has been envisioning the global energy problem for a long-time. Starting with the energy crisis in the 1970s, California revamped its electricity markets so that the utilities companies could make money by assisting their customers to use less electrical power. The state also started enacting ground-breaking efficiency standards for buildings, electric appliances, pool heaters and almost anything that uses electricity. More recently, it has proposed the standards for flat-screen TVs.

The efforts towards energy saving have been rewarded well, saving Californians an estimated $56-billion and avoiding the need for 24 hour gas-fired power plants. On the supply side of the energy equation, California State has demanded that utility companies provide one-fifth of their power from renewable sources by 2010, which will increase to one-third by 2020.

One factor that stimulated California’s economic growth is the public-sector foresight and futuristic economic governance. The public-sector has created alluring opportunities for most high-tech firms. The venture capitalist and technological entrepreneurs behind the high-tech and biotech business see ‘clean tech’ as the next big-thing.

What makes cutting-edge technology business exciting in California is that the human capital required for the business are already there – the engineers, scientists, accountants, lawyers, marketers and workshop floor knowledge workers. Californian knowledge workers score high on both creativity and productivity compared to most of the other states.

Critical industry observers see new industrial trends in California. The line between sectors is blurring fast, software and chip industries are converging into renewable energy components manufacturers. There is more to green technologies than saving the planet and gaining energy efficiency. Technological innovations in California are too rich to ignore. Industrial experts are seeing the chips industry moving into renewable energy industry, especially in the manufacturing of solar panels.

Other changing industrial trends are seen in San Diego’s cluster of more than 500 biotech companies, which are now the capital of algae-to-fuel experiments, including a new $600-million joint venture between Exxon Mobil and Venter’s synthetics Genomics.

As California is becoming more technologically advanced and greener simultaneously, the imbedded business message from the high-tech community is that inventing a better gadget is not enough anymore. Technological advancement must add value to people’s lives and how they live. Advanced technology should lead to economic empowerment and social enrichment of the people.

California is a state in progress; and everything it produces is a work-in-progress. It has a welcoming attitude to new ideas and ideas define the future. In California’s high-tech industry, one sees a powerful convergence of brain capital and guts. Failure is appreciated, not stigmatised and a technological entrepreneur without a few failures on the curriculum Vitae (CV) is viewed with suspicion. Status quo is more of a historical factor rather than a roadblock into the future.

Going beyond the known into the unknown is the roadmap to progress. Where the future does not exist – the best thing to do is to invent it, create it and manufacture it.

Products and services define the future. So many technological innovations happen in California because so much talent resides in California. California is a dream state where Hollywood represents the future and Silicon Valley manufactures the future.