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Ask HN: Why is the US the center of the tech industry?

61 points by mastrsushi 7y ago

Is it the historic innovation, American culture in general? There are so many other countries with brilliant minds, we live over the internet. Yet foreign companies are ignored for Google, Apple, and Amazon, Microsoft, and Oracle. I dont hear anything elsewhere, China being the only exception. And they're feared, to the point where Huawei's banned. Do you think another country will take its place? Will growing internet adoption lead to growing patterns of geographic decentralization in the industry? Is it possible cryptocurrencies will cause a rise in an internet centered tech industry?

tlb 7y ago
Such broad questions don't usually lead to high-quality discussions. It's better to submit articles presenting a point of view on the topic.
- deleted 7y ago
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josho 7y ago
Read Steve Blank’s blog. He has several articles outlining how Silicon Valley started, why it continues, and why it isn’t easily replicated elsewhere.
djohnston 7y ago
We made the tech industry
- mastrsushi 7y ago
  We made the first tech industry
  - thundergolfer 7y ago
    That's basically what "made the [X] industry" tends to mean.
    - mastrsushi 7y ago
      But someone could read that and think "the one and only". By stating the first shows there's more potential.
      - djohnston 7y ago
        By that logic your question should have been " Why is the US the center of this/a tech industry" :)
  - perilunar 7y ago
    Which 'tech' industry would that be? Textiles? Steam power? Railways? Steel? Shipping? Industrial chemistry? Automobiles? Aircraft? Kind of amusing that what you think of as the "first tech industry" is only one of a very long list.
donatj 7y ago
My 2¢ in taking to people from other countries, it's the American attitude. Americans for better or worse think we can do anything, and they will try incessantly. They will start a business with far less experience and qualifications than others, pull themselves up by the bootstraps and potentially fail spectacularly - just to get right back up and do it again. I do not get this sense taking to people from other countries at all, largely in part Canada and the UK. They aren't trying to change the world.
- ageek123 7y ago
  Also, critically, the US government (mostly) allows this. Many other countries have laws or regulations that impede the dynamicity of the economy and disincentivize entrepreneurship (or at least incentivize it less).
  - nikanj 7y ago
    This might be true globally, but all across the western world you are pretty much free to start a software company
  - return1 7y ago
    Laws would change if the culture changes. I think it s cultural, first
  - badpun 7y ago
    I think it's largely in the past now. There's a crapton of regulation, licencing etc. in the US now, maybe a little less than in some other developed places, but it's far from "the land of the free".
- TACIXAT 7y ago
  I agree. My biggest fear is that we're getting a little too heavy on protectionism and regulation. We have giants in a lot of industries with regulatory capture. I think China's loose approach to IP may allow them to eat our lunch.
  - 7y ago
takanori 7y ago
Government spending on infrastructure including defense. Defense has historically been the largest funder/purchaser of tech. Yes, we’re in a period where consumer tech is driving innovation, but that hasn’t historically been true.
cgrealy 7y ago
The same reason it's the current largest economy.... a happy accident of history and geography. Every other major economic power was devastated after WW2. Because the US was geographically isolated from the major theatres of war, it was in a good position to capitalise on the investment in technology at the dawn of the transistor age.
- blago 7y ago
  I've heard this argument many times but it never rang true to me. Here is why: Every nation has gone true adversity and many had bounced off in a matter of years. The US economy has been dominating (measured by % of world GDP) since long before WW2. Ref: https://infogram.com/share-of-world-gdp-throughout-history-1gjk92e6yjwqm16 https://infogram.com/share-of-world-gdp-throughout-history-1... Also worth noting is that the US has faced its own headwinds including a civil war just a few decades before its ascent to global domination.
  - mixmastamyk 7y ago
    Civil war was eighty years earlier and didn’t result in complete destruction due to lack of technology. In other threads mention the British tech giveaway, German scientists, and booming infrastructure compared to Europe and Asia in ruins. The can-do attitude was a multiplier. WWII was a hundred year boost.
    - blago 7y ago
      > Civil war was eighty years earlier Earlier than what, the Great Depression? The civil war resulted in > 500,000 deaths and hardly made a dent in the upward trend that was already underway. > didn’t result in complete destruction due to lack of technology. Europe was rebuilt 60 years ago (infrastructure, industry, and all) > WWII was a hundred year boost. Not sure where you get this information but looking at the data I linked, WW2 provided a gentle touch before the US started to slide down and has been ever since.
      - mixmastamyk 7y ago
xvilka 7y ago
You narrow tech down to the software. If you add electronics and engineering, well, you will see also a bunch of European and Japanese companies.
tomnipotent 7y ago
Since the big Intel cash out, it's been venture capital. Europe & Asia is private equity territory, which is a fundamentally different attitude and approach to high-risk, high-growth business (as in they rarely do it). VC firms expect to make their money on IPOs & exits which encourages innovation and experimentation, while PE firms expect to make money from operations and interests on obliged loans which favors smart operations and good margins.
- holdenc 7y ago
  Completely agree. But, I think this begs another question -- why does venture capital thrive in the USA so well as opposed to Asia? Is it a cultural thing? or a fundraising thing?
village-idiot 7y ago
Accident of history and sheer momentum. We had the cash and research institutions during the beginning of the digital age, and as a result we have the brain trust for both programming and hardware design. Remember that a huge percentage of programming languages, documentation, and surrounding culture (blogs, etc.) are not only in English, but culturally American. That’s a huge advantage for America in the tech space.
toasterlovin 7y ago
Lots of human capital because A) we have a large population, B) we have the highest level of economic development in the world, and C) we've done a great job of importing talent. We were the main beneficiaries of the Europeans driving out their Jewish population. As a group, European Jews are responsible for something like 25% of our intellectual output over the last century, but only make up 2% of our population. Lately we've been importing an intellectual class of similar caliber from the Indian subcontinent. Kinda hard to lose the race when you have a huge proportion of the world's intellectual talent.
- mateo411 7y ago
  How do you measure 25% of the world's intellectual output? I'm a fan of Judea Pearl and Woody Allen, but I think that's a pretty strong statement to make
  - coryrc 7y ago
    He/she's talking Albert Einstein, et al: https://news.stanford.edu/news/2014/august/german-jewish-inventors-081114.html https://news.stanford.edu/news/2014/august/german-jewish-inv...
    - csdreamer7 7y ago
      Also, Sergey Brin (Google co-Founder). His father's tale of anti-semitism in Russia is now quite famous. https://www.cnet.com/news/googles-brin-anti-semitism-forced-my-family-out-of-russia/ https://www.cnet.com/news/googles-brin-anti-semitism-forced-...
  - deleted 7y ago
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  - vishnugupta 7y ago
    > How do you measure 25% of the world's intellectual output? Neil deGrasse Tyson used Nobel prize winners as a measure (~30% of them are Jews). While I agree that it's hard to measure it is representative of the underlying picture.
chapium 7y ago
These companies were built on the shoulders of giants in silicon valley which had a ton of cold war era science foundation grants helping to prime the emerging industry.
est31 7y ago
First of all, the technology industry itself is not just exclusive to the US. Samsung is south Korean, Nintendo is from Japan, Siemens is from Germany, ASML is from the Netherlands. All of these are highly technological companies, with Nintendo having been at the frontiers of technology since decades. But of course, Silicon Valley is unique with its high concentration of hightech companies. This has multiple reasons: * The US federal government provided massive amounts of funding, especially in earlier years. Oracle for example was jumpstarted by the CIA, an US federal agency. * Economically, the US is highly developed, and has a gigantic market with over 200 million people who all speak one language. The EU didn't even have the unified market since a few years ago, and there is still inconsistency regarding the language. China does have both a more or less consistent legal regime as well as a consistent language due to their past efforts to teach their population a common language (this is non-zero effort as Chinese dialects are so different to each other, probably if it weren't for political influence you'd classify them as several languages). * California in specific has at-will employment laws meaning a start up can be wrapped up quickly without having to pay large sums of money to employees. * The US federal government maintains a large spying apparatus which has been increased massively after the 2001 terror attacks. They don't just use it for evil terrorists. It has been confirmed multiple times that they perform industrial espionage against companies in western countries, supposed allies of the US. The US government then gives the results of the espionage to industrial partners. * Nowadays there are of course massive network effects.
- creato 7y ago
  > The US federal government maintains a large spying apparatus which has been increased massively after the 2001 terror attacks. They don't just use it for evil terrorists. It has been confirmed multiple times that they perform industrial espionage against companies in western countries, supposed to be allies of the US. The US government then gives the results of the espionage to industrial partners. Specifically which company has benefited from industrial espionage in a way that can even begin to answer the question posed by the OP?
  - est31 7y ago
    Of course, this is not the sole reason why the US industry is where it is today. It's rather one of many reasons. The effect is much smaller than, say, soviet espionage on US technology was. But here you have some links on US industrial espionage on German companies: https://www.windpowermonthly.com/article/960011/trans-atlantic-espionage-claimed-german-wind-company https://www.windpowermonthly.com/article/960011/trans-atlant... https://www.spiegel.de/international/germany/german-firms-fear-industrial-espionage-after-snowden-leaks-a-912624.html https://www.spiegel.de/international/germany/german-firms-fe...
DeonPenny 7y ago
Its pretty much culture. The US is open to ambitious people from across the world unlike a lot of countries, the US is big un deregulation unlike Europe which stifles a lot of their companies, there's one language, there's a culture of acceptable failure, willingness to try despite lacking experience, and slow-moving governments. Its probably more but this is what I've seen.
cltsang 7y ago
Freedom and democracy are vital to open and honest discussion, which in turn drives innovation. Sense of safety and security on all fronts let people concentrate on ideas and execution, rather than things.
kstenerud 7y ago
A few things: 1. America's early expansion was designed to gain control over the entirety of the Mississippi river, which has the largest lockless waterway system serving the longest "useful" land area in the world with cheap boat transportation. This cheap transportation is the primary reason for American early development success, and continues to benefit America immensely to this day. 2. Every other developed country suffered massive losses in the world wars. America suffered no damage to her land or infrastructure, and was able to use her superior position at the end of the war to gain even more economic advantage over allies and foes alike. 3. America binged importing top scientific talent at the end of the second world war, most notably from Germany by offering them amnesty from war crimes (which massively boosted their rocketry, medical, and electronics industries). The rest is largely snowball effect.
- TACIXAT 7y ago
  Any reading on 1? I was thinking about how America gained ground in the world, from early colonial, to the industrial revolution, to the internet giants. I haven't read much about the Mississippi in relation to that era of our industry.
  - kstenerud 7y ago
    Encyclopedia Britannica has a decent introduction [1]. There are a number of books that cover the early development of nations, but the name of the book that dealt with waterways in depth escapes me at the moment. Possibly something by Marvin Harris or Jared Diamond? [1] https://www.britannica.com/place/Mississippi-River/History-and-economy https://www.britannica.com/place/Mississippi-River/History-a...
    - jcranmer 7y ago
      I think saying that American expansion was designed to control the Mississippi River is a stretch. The main expansion that occasioned it was the Louisiana Purchase, which was completely unintentional: the Americans went to France to ask for New Orleans, and were willing to pay up to $10 million for it, but Napoleon opened with an offer of all of Louisiana (doubling the size) for the bargain price of $15 million. Louisiana wasn't a primary focus of the US foreign policy, particularly in the early 1800s. Instead, the US was more concerned with staying out of the deteriorating situation in Europe (during the Napoleonic Wars), and the main expansion targets would have been Canada and Florida.
stretchwithme 7y ago
“It always seemed like when there was cool technology or things happening, it was kinda of in the United States. So, my goal as a kid was to get to America basically.” Elon Musk
baroffoos 7y ago
Large population also the fact that it is because it is. Lots of skilled people in tech move to the US to work so more companies start there which means more people move.
jcranmer 7y ago
There are several things that contributed to the rise of the dominance of American tech industry. In no particular order: * World War II. In WWII, the only country that had the means to meaningfully fund longer-term military research projects was the US; in other countries such as Germany and the UK, these projects were defunded or reduced in scope to let the money and resources be allocated to things that would help prevent the collapse of the country. Furthermore, the US was the only large country to escape significant infrastructure destruction, which would preoccupy most of the rest of the world for another decade or so. * The development of a strong education and research system. This is in and of itself a more complex topic, but one thing I'd call out is that the American wealthy have had a stronger tradition of philanthropy than their European counterparts, and a lot of that philanthropy was geared towards making sure that the US was well-stocked with universities, libraries, museums, and the like. * Clustering effects. Companies tend to want to be near other companies that do similar things--it's why there's a lot a tech companies in Silicon Valley, even if they could do their job equally well from Illinois. Early computer research ended up being in the US, so the computer technology clusters have ended up being very US-centric. * Market size. The US has historically been the largest market for tech, and arguably still is for certain segments of the market. Europe has been (and generally remains) too fragmented to be a single market, China and India historically too poor, and the USSR hampered itself with internal controls. Furthermore, the size of the US market also means that it tends to be harder for foreign entrants to break into the market than it is for US entrants to break into foreign markets. > Do you think another country will take its place? Eventually, yes. On what time scale, I can't say. > Will growing internet adoption lead to growing patterns of geographic decentralization in the industry? No. The internet has not reversed the trend for businesses to cluster together, and I see no reason to expect that should change. > Is it possible cryptocurrencies will cause a rise in an internet centered tech industry? I don't see how they could...
- kartan 7y ago
  > World War II. In WWII, the only country that had the means to meaningfully fund longer-term military research projects was the US This is true not only for tech but also for everything else. Being poor in the USA was better than to be middle class anywhere else. Also, European scientists left to the USA. > The development of a strong education and research system. Yes. Education is the base for the knowledge economy. > Market size. Sweden is a good example of a country in a similar situation to the one in the USA. But, it is very small. Sweden has been very successful in IT but its impact is very small. I completely agree with you.
Teracotage 7y ago
The eco system thing is one, the second is: Geopolitics, which plays a big role in that, I mean with the huge US influence the Silicon Valley companies can be global trendsetters, think of the FCC standing in the global,telecom sector.US allies could not ban UBER although they hate it, but they have to play the American (open market) rules. There were many superior products by non-American companies, Creative Technology got the first portable audio player, years ahead of Apple, yet they underestimated the value of the American market and spearheaded MP3 with total disregard for copyright issues (Napster days), Russian companies produce good stuff-Kaspersky et al- but they do not have the full "Eco system".
adamzhou 7y ago
US companies give much higher pay than Europe and China. A beyond-average elementary programmer gets $40K/yr in China with 9-9-6 life. But the same person in the United States may get $120K or even more with a 9-6-5 life. So many Chinese programmers are moving to the US for higher pay.
- adamzhou 7y ago
  * I dont hear anything elsewhere, China being the only exception. And they're feared, to the point where Huawei's banned. Not every Chinese developer could get out of China to get higher pay because of tight competition, family, and traditions. It should be mentioned that: 1. US companies in China (like Google, Microsoft, etc.) do not give higher pay than Chinese companies (like BAT, Toutiao, Pinduoduo). 2. Apartment price in China is very high. You can't easily find an apartment inside Beijing's 5th-ring-road having a <$10,000/m2 price. Developers that cannot go aboard can only work hard in Chinese companies to pay the apartment loan.
  - rognjen 7y ago
    Comparing pay directly like that is not very fair. Many other things need to be taken into account including cost of living and services.
bobosha 7y ago
PG's essay from nearly 15 years ago is still very relevant and IMO sums up best why America is so dominant in tech (and ohh btw also in entertainment and a bunch of other areas) http://www.paulgraham.com/america.html http://www.paulgraham.com/america.html
chungleong 7y ago
One word: baseball. Love of the sport is what makes Americans different from other nations. One man facing the opposing team. With one swing of the bat you can win it all, overcoming limits imposed by the playing field itself. Making technological innovations is very much like that.
rognjen 7y ago
I think another big part of it is down to the lack of regulation. Other countries with similar socioeconomic conditions tend to regulate things quicker plus have social programmes (healthcare, workers rights etc) The US does neither. I think this makes it easier to start in the first place. The other part, as others have pointed out, is the extreme development the US achieved on the back of WWII that provided capital which has snowballed since.
rramadass 7y ago
The reasons are manifold. Some are nicely summarized (factors leading up to the current Political/Military/Economic domination) in a two-part Stratfor article; 1) The Geopolitics of the United States, Part 1: The Inevitable Empire - https://worldview.stratfor.com/article/geopolitics-united-states-part-1-inevitable-empire https://worldview.stratfor.com/article/geopolitics-united-st... 2) The Geopolitics of the United States, Part 2: American Identity and the Threats of tomorrow. - https://worldview.stratfor.com/article/geopolitics-united-states-part-2-american-identity-and-threats-tomorrow https://worldview.stratfor.com/article/geopolitics-united-st... The way i look at it is (in no particular order); Luck - WW2 decimated almost all developed countries. The US "home" was untouched (no war on their soil) thus leaving them as the sole industrial/military powerhouse with resources intact. This is actually a huge factor and the current state follows directly from here. They also appropriated a lot of Scientists/Technologies from the losers which gave them the needed headstart in many tech areas. People psyche - The country was founded by immigrants who basically had to do whatever to "survive". Since they had no history in the new land, they were not bogged down by crystallized cultural norms and beliefs. Thus the focus on "Capitalism"(euphemism for Greed and "do whatever it takes to win") and "Hustle" (not always driven by Ethics/Morals contrary to what their leaders may claim). This setup their current culture where their desire is to be THE global hegemon by any means necessary. If you think about it, this is a great motivator for just about anything. Geography - Covered well in the above articles. This allowed them to develop independently of detrimental external influences. Control of World Economy - By forcing everybody to use $ as the world's currency. The ramifications of this is all-encompassing. Military/Education/Industrial Complex - This is a crucial nexus which is directly responsible for much of their dominance in the technology domain. The Military funds "Blue Sky" projects in close association with Academia and the Industry. Because of this close-knit setup, the path from Ideation to Realized Implementation is very fast and seamless. No other country does this as well. Because of the "Power Law", progress in Technology is accelerated leading to being the natural front-runner. Finally, it should be clear that "Military Dominance" is used to enforce "Economic Dominance" and vice-versa.
- strikelaserclaw 7y ago
  Not to mention the sheer size and abundance of natural resources in America.
jandrewrogers 7y ago
The most interesting question is why do Americans dominate software technology specifically? It is the most level playing field of all technologies. The skills to develop a state-of-the-art next-generation software technology are readily available and learnable globally while requiring negligible capital. On paper, you would expect this to be an area where Americans have the smallest advantage instead of one of the biggest. Having worked with software engineering teams around the world over the years, and also done a lot of software tech M&A diligence, I've come to appreciate the massive impact that local culture has on being effective at advanced software development. This goes beyond the culture of the company itself; the level of ambition and optimistic self-belief required to be effective at developing very advanced software isn't terribly compatible with environments where Tall Poppy Syndrome/Law of Jante/etc is a real social dynamic, and that is very much the rule rather than the exception.
- amboo7 7y ago
  This. Having worked in the US and Europe, the local culture is ubiquitous. What is best for advanced software development, and engineering in general (IMO), is a low-context culture[1], which is dominant in the US -- so that many immigrants of diverse backgrounds can communicate efficiently. [1] https://en.m.wikipedia.org/wiki/High-context_and_low-context_cultures https://en.m.wikipedia.org/wiki/High-context_and_low-context...
return1 7y ago
From an outside perspective, americans are more willing to try (and to dump) new things, period. It takes an arduous amount of energy to convince europeans to do the same, and you re likely to be rewarded with obnoxious remarks. And you cant grow a product if nobody is using it, thats why US wins. It is also a big homogeneous market, which means niches are sizeable. In europe , niches are divided /28
redsymbol 7y ago
American and moderately successful entrepreneur here. I had to look up the Law of Jante. My reaction: Holeee crap. That's one set of beliefs that is practically guaranteed to block ANYONE from manifesting even a fraction of their innovative potential. (Is it even real? Can anyone from the Nordic region confirm or deny?) Going even further: If someone wants to shape their mindset, etc. into that of someone who is on a path to massive entrepreneurial success, and compelled to create something of lasting impact and value to the world... You could almost take those rules, reword each to their opposite, and then read those opposites to yourself as daily affirmations. That'll start to program your beliefs into something much, much more self-empowering. Rather than massively self-limiting. (Maybe I'm indirectly revealing part of the answer to the OP's question here.) In the USA, we have the metaphor of the crab bucket, and it's a real social effect. I had to escape it myself in my own family (which I basically did through over a decade of sheer grit and tenacity, plus self-programming with techniques like affirmations). [Happy ending: having got to the other side of it, I'm closer to my extended family now than ever before.] But if I got to pick, I'd take the crab bucket over the Law of Jante every day.
- ThJ 7y ago
  It was originally meant as satire of small-town Scandinavia. But... You're definitely not encouraged make a big deal out of yourself over here. Maturity means to do your part to help the people around you. Taking up space is somewhat frowned upon and people are generally uncomfortable with accepting compliments. The mindset is collective. But there's a social class of business people and professional athletes who don't think that way. I think you basically have to be in small circles, have special abilities or be born into a family of business people to get exposed to an individualist mindset like that.
  - ThJ 7y ago
    I'm from Norway and the Norwegian ideal of wealth is that you're not supposed to show it off. The richest man in Norway is real estate mogul Olav Thon, and he basically dresses like a tramp.
badpun 7y ago
Culture. America is extremely materialistic, individualistic, competititve and success-oriented. Whereas in many other countries, many people shrug at the thought of becoming a billionaire ("what do I need all this money for?"), in America, the default reaction is "THAT'S AMAZING". This makes Americans take way more risks with entrepreneurship, as, for them, they are chasing the ultimate dream. It may be bad for them on individual level (as most of them fail, sometimes with serious consequences to their lives), but the US society as a whole benefits, because of the value created by the successful minority.
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shmooth 7y ago
US and Israel because we spend all that cash on ‘defense’ as another way to funnel money to the rich.
dangerface 7y ago
> Is it the historic innovation, American culture in general? LOL no. Pretty much all European industry was destroyed by world ward 2, they then had to buy from America and help improve their industry to beat the Nazi. Not trying to belittle American contribution to ww2 which was obviously massive just pointing out that America "lost" one harbour but pretty much every European country lost pretty much every industry they had. After ww2 America had an industry with loads of spending money, they innovated while every one else was rebuilding. The rest of the world has been playing catchup ever since with varying degrees of success. Since Europeans, Americans and China are all as brainy as each other its really hard to catch up unless you can make a sacrifice Americans cant for example sacrifice your peasents as cheap labour. It looks like China will beat America with this attitude, when it does will other countries adopt Chinas "winning" attitude? or be left behind?
cdg7777 7y ago
Govt investment: https://www.youtube.com/watch?v=ZTC_RxWN_xo https://www.youtube.com/watch?v=ZTC_RxWN_xo
codingslave 7y ago
One thing I'm surprised I havent seen here is the respect that programming gets in America. If youre a decent engineer you can basically walk into a job making at minimum 150k a year, at any time. You are paid well, given some level of autonomy, etc. In other countries engineers are at the absolute bottom of the totem pole, there is no respect for the craft, and you are expected to be promoted out of the ASAP. This has all sorts of secondary effects like bad technology, no progress, no risk taking from engineers who can get another well paid job if they fail. I honestly feel like there must be opportunities all over Europe to show up with a much better tech product and steam roll the incumbents. Another clear reason is how fragmented Europe is. All of the different countries have different customs, languages, and cultures. This makes it hard to scale a product. It's the opposite case in the USA, no such barriers, easier to scale across 300M people.
- arduinomancer 7y ago
  Yeah reading what some people say online, it sounds like in some countries programming is seen as more like grunt work or the same as IT work. Whereas America really glorifies the hacker/startup mentality, for example in stuff like The Social Network or HBO’s Silicon Valley.
atmosx 7y ago
My take on this: I believe the 2nd WW is the major historical event that led the most bright scientists of that era to the USA. From that point on, most major technological advancements were made in the USA. Whoever has the most advanced technology wins the war. At the beginning the other equally technologically advanced site was believed to be the USSR. Nowadays is China. Europe relies on the USA for protection and the price to pay is to stay technologically irrelevant, which means irrelevant in every sense.
president 7y ago
The US has been an established and time-tested platform for churning out businesses. All the reasons others have mentioned including culture, deregulation, etc may play a part but to me, it is the post-war head-start and momentum of continued success that has kept other countries from reigning supreme. Countries are constantly losing top talent to the U.S. because we have the money/opportunities to attract them and these countries lose out on any potential successes. Who knows, this could all change if it hasn't already.
ThomPete 7y ago
Because of the dominance of the US millitary coincided with the development of the microchip.