Silicon Valley - Is The Sky Falling?

I just finished reading an informative article over at the NY Times in which it states that Silicon Valley is suffering from a lack of innovation. According to the source, it is doom and gloom since companies are no longer living on the edge and innovation is being stifled. The opinion of the writer goes on to state that the venture capitalists are sometimes reluctant to take a chance on the new kids on the block and that older companies would rather buy a start up rather than innovate. In the article it states:

Ms. Estrin traces Silicon Valley’s troubles to the tech boom. She said that’s when entrepreneurs and venture capitalists started focusing more on starting companies to turn around and sell them and less on building successful companies for the long term.

“Starting in 1998, there was such a shift in Silicon Valley toward chasing money and short-term returns,” she said.

Ms. Estrin acknowledged that innovative ideas still appear all over Silicon Valley. But, she said, the technologies at the root of new products like Apple’s iPod or the Facebook social networking service were actually developed several decades ago. If entrepreneurs do not continue to develop groundbreaking technology, she said, the valley will be in dire straits in another decade. She compared the situation to a tree that appears to be growing well, but whose roots are rotting underground.

Well I am no insider, but it appears to me that innovation is alive and well in Silicon Valley. Using the 1998 date cited by Ms. Estrin, it seems to me that just in the hardware field alone, great strides have been made. Ten years ago the toys that we have today were only a dream.

A few days ago I wrote about the next two months in which we shall see more netbooks, a phone from  Google along with Android software, Apple revamping iPods and a host of other new toys. How about quad processors, cloud computing and virtualization? These seem very innovative to me.

So what do you think? Is Silicon Valley in a slide?

Comments welcome.

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