9 ms·

It's very worth remembering that the abundance of Silicon Valley is fragile, and temporary. But I think many articles surmising that the peak is now have the t

It's very worth remembering that the abundance of Silicon Valley is fragile, and temporary. But I think many articles surmising that the peak is now have the timescale wrong. I'd compare Silicon Valley to Detroit with a century time lag. The American automotive industry started in the 1890s, just like the Internet industry started in the 1990s. Like the Internet, it built off a constellation of related technologies that had been under development for 30-40 years. The automobile industry was built on the iron mines in Duluth, coal mines in Appalachia, petroleum industry in Ohio, steelworks in Pennsylvania, and Great Lakes transportation infrastructure that had been setup throughout the 19th century. The Internet was built on software from Boston; microcomputers from Albuquerque, Austin, and Houston; an OS from Redmond; semiconductors from Oregon; and so on. In 1910, the population of Detroit was 465,000. It had nearly doubled from 285,000 in the previous decade, fueled both by international migrants looking for then-high wages and Black migration fleeing persecution in the rest of the U.S. (sound familiar?). The auto industry was well established, with Model-T production in its heyday. Supplier networks were already starting to grow up around the big-3 automakers. But Detroit's population didn't peak until 1950, at quadruple its 1910 population. In between, Detroit would be key to winning two World Wars, and the automobile would fundamentally reshape society. Most of the growth happened between 1932-1960, and only after key government & societal infrastructure changed to be built around the automobile rather than the automobile serving as a luxury novelty for Gilded Age technorati. Eventually Silicon Valley will end up like Detroit, with abandoned 4-over-1 condo complexes and empty office parks where the software industry once stood. But we've got a while to go. We haven't had our war yet, and the basic infrastructure of society - transportation, legal, military, government, etc - is still based on pre-electronic conceptions.

bcrosby95 6y ago
You're ignoring over half of Silicon Valley's history in your narrative, including the population boom that gave the region its name and the vast majority of its growth. Silicon Valley has been getting transplants since the 60s. The region has grown around 15-20% in the last 20 years. From 1960 to 1980 region roughly tripled its population. There's a reason why prop 13 came about in the 70s. I'm not saying it will always be a tech mecca. But ignoring a majority of its history with tech just so you can compare it to Detroit seems disingenuous.
- rcpt 6y ago
  > There's a reason why prop 13 came about in the 70s. Because vengeful homeowners wanted a "revolt" to punish the government for taxing them. It wasn't because of home prices, 1978 Prop 8 would have solved that, they wanted revenge. It's greed and hate right down to the roots. https://teachingmalinche.com/2018/08/26/the-summer-that-elvis-died-and-proposition-13-was-born/ https://teachingmalinche.com/2018/08/26/the-summer-that-elvi...
  - deleted 6y ago
    [deleted]
  - deleted 6y ago
    [deleted]
  - deleted 6y ago
    [deleted]
- nostrademons 6y ago
  Silicon Valley's been getting transplants since the 1860s. There's plenty of waves of immigrants before tech - the Gold Rush, Okies in the 1930s, WW2 GIs, the defense boom around Lockheed (which brought my father-in-law to the area; my wife is a Bay Area native), desktop software, and then finally the Internet. Just as Detroit had waves of migration from the 1700s - fur trading, Great Lakes trade, iron manufacturing, and then finally automobiles. I'm specifically picking Detroit from ~1895-1970 vs. Silicon Valley from ~1995-future because there's a similar dynamic at root. A single globally-relevant industry that's remaking society, and everybody pouring in to capitalize on this. Given similar root causes, it seems likely that their futures will be similar as well.
Swizec 6y ago
Or to use a popular phrasing: Economists have accurately predicted 5 of the last 3 recessions. On the way up, it always looks like last year was peak. Then this year does even better. Continue for decades until one year, suddenly, the music stops.
michae2 6y ago
To drive the analogy even further, web browsers could be considered the automobiles of the information superhighway.
- jakeinspace 6y ago
  I think the analogy just drove off a cliff, or maybe into a firewall.
  - heavyarms 6y ago
    I disagree. I think we need to put the paddle to the metal and take this baby for a spin. I do think the analogy needs a tune up. Web browsers are not the "automobiles of the information superhighway" because while they let you go forward or go back, they don't let you turn left or right. So clearly, web browsers must be the trains of the industrial revolution, riding on the coast-to-coast rail network which was built in Dot Com Boom and Bust fashion [1]. So I think Silicon Valley will chug along for many years to come. Of course, there's a chance this gravy train could be derailed. Owning all of the train stations has something to do with Monopoly. I'm running out of steam... need more analogies and puns to shovel into the furnace.. [1] https://en.wikipedia.org/wiki/Railway_Mania https://en.wikipedia.org/wiki/Railway_Mania
  - joejerryronnie 6y ago
    It autonomously drove into a firewall.
lotsofpulp 6y ago
> Eventually Silicon Valley will end up like Detroit, with abandoned 4-over-1 condo complexes and empty office parks where the software industry once stood. What if the secular demand for living in Silicon Valley is higher than Detroit? What if Detroit was desirable due to the economics and infrastructure constraints of that time, but what if people like the other aspects, such as location and weather,of living somewhere? Not that it’s not possible for that to change either, but my point is different pieces of land may be more or less desirable than others outside of economic conditions.
- retrac 6y ago
  Detroit was once one of America's finest cities, basically the embodiment of the American dream. Once the economy that floated all that ended, it ended too.
  - lotsofpulp 6y ago
    My point is what if that was due to the inertia of the eastern US having more population, being close to necessary waterways for transportation, and certain natural resource stores. We have the internet and cheap transportation now, so people (with resources) can more easily move to where they want to live. I can conceive a future where even if tech were somehow displaced, then other people with money would come to silicon valley, simply because they want to and they're not tied to another location, like richer people may have been during Detroit's heyday.
    - _sillymarketing 6y ago
      Totally. I relocated to Colorado a decade ago, swallowing the cost of living salary decreases, but I'm coming out better in terms of quality of life. If California, for a split second, achieved even close to the affordability for quality of life as CO, I would move back.
- RandallBrown 6y ago
  I haven't lived in Silicon Valley, but I've visited enough times to know the weather is a hell of a lot better than Detroit. Its access to natural beauty like the ocean and mountains is also considerably better. If Detroit and San Francisco were equivelant cities (culturally, cost of living, etc.) I can't see why anyone would pick Detroit.
joejerryronnie 6y ago
Silicon Valley goes much further back than the Internet Industry.
- slumpt_ 6y ago
  A lot of folks new to the area don't appear very familiar with its history, but make strong proclamations of its fate all the same.
- deleted 6y ago
  [deleted]
seattle_spring 6y ago
> Eventually Silicon Valley will end up like Detroit, with abandoned 4-over-1 condo complexes and empty office parks where the software industry once stood. This happened to Detroit because jobs were literally the only reason to live there. The Bay Area has amazing weather, unbelievable scenery, world-class recreation, and tons of music and culture. If the jobs of today leave, the jobs of tomorrow will replace them simply because the area itself is one of the best in the country. Detroit is a flatland nowhere in frozen tundra flyover state. "A bunch of lakes" is only going to keep an extremely small subset of people interested.
- Apocryphon 6y ago
  Yeah, it's like if LA was to lose the entertainment industry, the Mediterranean climate alone ensures it a highly desirable place to live. And both SF and LA are major ports.
- ardy42 6y ago
  > The Bay Area has amazing weather, unbelievable scenery, world-class recreation, and tons of music and culture. If the jobs of today leave, the jobs of tomorrow will replace them simply because the area itself is one of the best in the country. That's not necessarily true. Maybe the jobs go and never return, but the recreational desirability leads it more in the direction of an Aspen: more of a place for recreation than business.
- OkGoDoIt 6y ago
  My job is the main reason I live in San Francisco. In my opinion Colorado is much more beautiful, Boulder has a lot of the advantages of living in a big city but also so many fewer disadvantages. Personally I’m not a big fan of the kind of nature of the bay area has to offer. I grew up in the Northeast and the southeast, and I miss the huge deciduous trees and the fall-time colors. The Bay Area is pretty, but doesn’t hold a candle to the beauty of Michigan or Colorado or Tahoe in my opinion. Obviously different people have different preferences, but for every person who believes the bay area is the perfect place to live regardless of their career, there’s at least another person who doesn’t particularly like it and has their own idea of a perfect place to live.
pydry 6y ago
1950 was also the point when: * Auto manufacturers consolidated to 3 big companies and started to more consistently put smaller startup automakers out of business. * They got into protracted fights with unionizing workers. * They stopped building manufacturing plants in detroit itself and built them further afield to cut labor and land costs. I think we can see these trends being mirrored in the tech industry right now.
- redisman 6y ago
  Maybe 1.5 or 2 out of 3, but > unionizing workers does not sound like SV today. You're also missing the main reason, superior products from Japan and Germany. We don't really see that as of now. China and EU have a handful of competitive companies.
  - option 6y ago
    please, what kind of competitive advantage EU has in tech? Sure, China has some advantages but it also has huge disadvantages as well.
    - jdminhbg 6y ago
      I think you misread the parent. They're saying the EU and China only have a handful of companies competitive with the SV giants.
  - deleted 6y ago
    [deleted]
  - inglor_cz 6y ago
    Today no, but the gig economy is probably not sustainable without some pushback. So, not core tech workers, but the worker bees at Amazon ... ?
  - normaljoe 6y ago
    It's not that SV is union workers but that union workers have a higher labor cost. Kind of goes to why GM started Saturn in TN and why Saturn cars where cheap in the late 80s, no unions thus cheaper labor. SV labor is expensive compared to other markets (see below). I have worked in SV and elsewhere and mostly elsewhere is 1/2 the pay as SV and without the things like free lunch / coffee bar / shuttle service. SV doesn't need unions because the turnover rate is so high that the companies are basically providing what unions would negotiate just to compete (free lunch / coffee bar / shuttle service). It's still a buyers market from the employee standpoint. I do think SV is not quite at the inflection point just yet, but it is moving in that direction. The irony in this is actually that the cost of labor is high because the cost of living is high. The cost of living is high because of the NIMBY folks preventing multiunit housing. If the ballon collapses those NIMBY folks would see their precious house values decline. Finally as to superior products most Japanese and German cars sold in the US are still built in the US, just not Detroit because of.... Wait for it.... Union Workers.
maxerickson 6y ago
Much of Detroit moved next door to Oakland County. ~400,000 in 1950. ~700,000 in 1960. ~1.2 million today.
- Apocryphon 6y ago
  Funny how that's nearly a possibility for SF as well.
  - bcrosby95 6y ago
    SF's population has been fairly stable since the 50's. And it didn't really take part in the tech scene until the 00's. The population of SF isn't going anywhere. If tech transplants move out, there's plenty of people that will want to move back. They won't be as rich though so prices will probably drop a bit.
    - Apocryphon 6y ago
      I was referring to both cities' proximity to places named Oakland.
- pydry 6y ago
  Much of this was driven by white flight.
heimatau 6y ago
> I'd compare Silicon Valley to Detroit with a century time lag. I had this perspective for a brief moment but as Charlie Munger said "Show me the incentives and I'll know the outcome". I think what many people are missing is that SV is heavily incentivized to be a place of big money. The real estate. The commercial climate. Etc.
silicon2401 6y ago
Based on this, what would be the best way to poise oneself to profit off of future changes in the tech industry?
- shuntress 6y ago
  Use you pre-existing fortune to buy assets that will increase in value.
deleted 6y ago
[deleted]
birdyrooster 6y ago
Detroit is flipping miserable to live in and the Bay Area has a natural air conditioner in the Pacific Ocean. Why do people keep overlooking this? I lived in a boom and bust steel and auto town in the midwest, people left because the only thing keeping us there was a paycheck and family. The Bay has much more to offer than Detroit. Not even comparable.
- majormajor 6y ago
  But that doesn't mean you're gonna have a great economy forever. That means property will be expensive forever, because there will always be rich people looking to move or retire there, but will that turn into innovative or well-paying jobs for people?
  - birdyrooster 6y ago
    It actually does because in Detroit the only reason to be there no longer exists in a meaningful capacity whereas The Bay Area will for the foreseeable future.
    - majormajor 6y ago
      There are a LOT of rich towns full of money in Europe - where this sort of thing has been going on for a LOT longer than the 100 years or so of California-in-the-US history - where the rich folks live that don't feature booming innovation economies. When even the current crop of tech workers get priced out of California by the continual influx of wealthy folks seeking out the climate you won't see SF turn into Detroit, but it's not gonna be the SF of the nineties->now.
      - Apocryphon 6y ago
        The San Francisco Bay is one of the largest natural harbors in the world. The tech industry might become like Detroit, the cities themselves will be fine purely because of logistical importance alone.
- 6y ago
keithwhor 6y ago
I really enjoyed the history of Detroit but; > Eventually Silicon Valley will end up like Detroit, with abandoned 4-over-1 condo complexes and empty office parks where the software industry once stood. This implies that there's a glut of housing that's been created to home Silicon Valley technologists, which couldn't be further from the truth.
- sroussey 6y ago
  Yeah, I think the worst case is that Victorian houses divided into 4 condos revert to being a single house again.
- nostrademons 6y ago
  The housing glut hasn't been constructed yet. Most of Detroit housing stock dates from 1925-1945, which puts it at least 5 years out.
  - burlesona 6y ago
    There is absolutely zero chance of a housing glut in California. The regulatory environment is so violently opposed to housing that the vast majority of people who live there could never afford to move. When the end comes, I think it is more likely to be because some thing finally tips such that people leave the area and (because houses are priced at the margins) prices begin to actually drop. Once that happens there could easily be a rush for the exits, as nobody wants to be upside down on a $2 million loan.
    - nostrademons 6y ago
      That scenario has happened repeatedly - 91-94, 01-02, 08-11, and now from 2018-present. It usually plays out as a ~10-25% drop in housing prices over a few years as the market exhausts itself, followed by a resurgence as wages & demand starts catching up again. https://havengroupsf.com/wp-content/uploads/2017/12/30-years-of-san-francisco-bay-area-real-estate-cycles.jpg https://havengroupsf.com/wp-content/uploads/2017/12/30-years... The way I think a glut could arise is when a tipping point is reached and pro-housing renters outnumber NIMBY owners on city councils. This has happened already in Mountain View (which was notoriously anti-development until a group of young pro-housing Googlers packed the city council and voted out all the NIMBYs in 2014, and now green-lights nearly any housing development), Sunnyvale, Redwood City, and San Mateo, and may make its way down to San Jose and up the rest of the peninsula. At present a lot of Bay Area communities are starting to look more like Paris: dense ~4 story apartment buildings, public squares, outdoor dining on pedestrian thoroughfares, etc.
apengwin 6y ago
> Eventually Silicon Valley will end up like Detroit, with abandoned 4-over-1 condo complexes and empty office parks where the software industry once stood. I'm certain this will never happen simply due to the superiority of California's climate.
- dougmwne 6y ago
  I'm certain there are many pleasant and warm places the globe over that are poor and isolated. People go where the jobs are. Nice weather is secondary. If we all start working in VR and location becomes irrelevant, then all bets are off. But why even have cities then?
  - vinceguidry 6y ago
    Nice weather really isn't secondary. It's the entire reason Southern California is what it is. Anywhere the weather's nice, people flock. If location becomes irrelevant, that will just make people flock even faster. Everywhere the weather sucks, ask around and you'll find the cheap place people go all the time for vacation, and wish they could live, if they could but afford it. For Atlanta where I live, it's nearby Destin, or Savannah. Nice weather is a primary determinant of where people choose to retire. It pumps land values up 10x or more. I'll turn your argument around and say that the only truly location-dependent industries are extraction based. Everything else moves where the people are. And people will pay through the nose to live where it's nice.
    - shuntress 6y ago
      > I'll turn your argument around and say that the only truly location-dependent industries are extraction based. Everything else moves where the people are. I don't think I would call the transportation industry (as in: ports, trains, planes, and related infrastructure) "extraction based". But that is an example of something very clearly location-dependent.
    - inglor_cz 6y ago
      "Anywhere the weather's nice, people flock" Well, yeah, prior to Covid, Andalusia in Spain was a favorite tourist destination. It really is lovely sitting at 10pm with a sangria in hand on a historic staircase of a palace and watching the nightlife milling around. But all this flocking is temporary. People do not move there to start businesses. (They do to Gibraltar, but that is a tax haven.) They just enjoy they stay, spend some money on recreation and fly back to gloomy-but-rich Amsterdam, London or Hamburg.
x87678r 6y ago
SV will probably end up like NJ, still one of the most advanced and prosperous places in the USA.
icedistilled 6y ago
There's a big difference between Detroit and SF (or California in general). Weatherwise it's one of the best places to live in the USA. The smoke issue is new but it's unlikely to be this bad most years. Detroit is unfriendly a much greater portion of the year It's likely the craziness in the Bay will subside but I would be extremely shocked if it began to resemble Ddetroit. Some of the more remote suburbs that haven't historically been places people would commute from might fare badly though.
chrismcb 6y ago
Silicon valley predates the internet era. Going all the way back to the 60s

bcrosby95 6y ago

You're ignoring over half of Silicon Valley's history in your narrative, including the population boom that gave the region its name and the vast majority of its growth. Silicon Valley has been getting transplants since the 60s. The region has grown around 15-20% in the last 20 years. From 1960 to 1980 region roughly tripled its population. There's a reason why prop 13 came about in the 70s. I'm not saying it will always be a tech mecca. But ignoring a majority of its history with tech just so you can compare it to Detroit seems disingenuous.

rcpt 6y ago
> There's a reason why prop 13 came about in the 70s. Because vengeful homeowners wanted a "revolt" to punish the government for taxing them. It wasn't because of home prices, 1978 Prop 8 would have solved that, they wanted revenge. It's greed and hate right down to the roots. https://teachingmalinche.com/2018/08/26/the-summer-that-elvis-died-and-proposition-13-was-born/ https://teachingmalinche.com/2018/08/26/the-summer-that-elvi...
- deleted 6y ago
  [deleted]
- deleted 6y ago
  [deleted]
- deleted 6y ago
  [deleted]
nostrademons 6y ago
Silicon Valley's been getting transplants since the 1860s. There's plenty of waves of immigrants before tech - the Gold Rush, Okies in the 1930s, WW2 GIs, the defense boom around Lockheed (which brought my father-in-law to the area; my wife is a Bay Area native), desktop software, and then finally the Internet. Just as Detroit had waves of migration from the 1700s - fur trading, Great Lakes trade, iron manufacturing, and then finally automobiles. I'm specifically picking Detroit from ~1895-1970 vs. Silicon Valley from ~1995-future because there's a similar dynamic at root. A single globally-relevant industry that's remaking society, and everybody pouring in to capitalize on this. Given similar root causes, it seems likely that their futures will be similar as well.

Swizec 6y ago

Or to use a popular phrasing: Economists have accurately predicted 5 of the last 3 recessions. On the way up, it always looks like last year was peak. Then this year does even better. Continue for decades until one year, suddenly, the music stops.

michae2 6y ago

To drive the analogy even further, web browsers could be considered the automobiles of the information superhighway.

jakeinspace 6y ago
I think the analogy just drove off a cliff, or maybe into a firewall.
- heavyarms 6y ago
  I disagree. I think we need to put the paddle to the metal and take this baby for a spin. I do think the analogy needs a tune up. Web browsers are not the "automobiles of the information superhighway" because while they let you go forward or go back, they don't let you turn left or right. So clearly, web browsers must be the trains of the industrial revolution, riding on the coast-to-coast rail network which was built in Dot Com Boom and Bust fashion [1]. So I think Silicon Valley will chug along for many years to come. Of course, there's a chance this gravy train could be derailed. Owning all of the train stations has something to do with Monopoly. I'm running out of steam... need more analogies and puns to shovel into the furnace.. [1] https://en.wikipedia.org/wiki/Railway_Mania https://en.wikipedia.org/wiki/Railway_Mania
- joejerryronnie 6y ago
  It autonomously drove into a firewall.

lotsofpulp 6y ago

> Eventually Silicon Valley will end up like Detroit, with abandoned 4-over-1 condo complexes and empty office parks where the software industry once stood. What if the secular demand for living in Silicon Valley is higher than Detroit? What if Detroit was desirable due to the economics and infrastructure constraints of that time, but what if people like the other aspects, such as location and weather,of living somewhere? Not that it’s not possible for that to change either, but my point is different pieces of land may be more or less desirable than others outside of economic conditions.

retrac 6y ago
Detroit was once one of America's finest cities, basically the embodiment of the American dream. Once the economy that floated all that ended, it ended too.
- lotsofpulp 6y ago
  My point is what if that was due to the inertia of the eastern US having more population, being close to necessary waterways for transportation, and certain natural resource stores. We have the internet and cheap transportation now, so people (with resources) can more easily move to where they want to live. I can conceive a future where even if tech were somehow displaced, then other people with money would come to silicon valley, simply because they want to and they're not tied to another location, like richer people may have been during Detroit's heyday.
  - _sillymarketing 6y ago
    Totally. I relocated to Colorado a decade ago, swallowing the cost of living salary decreases, but I'm coming out better in terms of quality of life. If California, for a split second, achieved even close to the affordability for quality of life as CO, I would move back.
RandallBrown 6y ago
I haven't lived in Silicon Valley, but I've visited enough times to know the weather is a hell of a lot better than Detroit. Its access to natural beauty like the ocean and mountains is also considerably better. If Detroit and San Francisco were equivelant cities (culturally, cost of living, etc.) I can't see why anyone would pick Detroit.

joejerryronnie 6y ago

Silicon Valley goes much further back than the Internet Industry.

slumpt_ 6y ago
A lot of folks new to the area don't appear very familiar with its history, but make strong proclamations of its fate all the same.
deleted 6y ago
[deleted]

seattle_spring 6y ago

> Eventually Silicon Valley will end up like Detroit, with abandoned 4-over-1 condo complexes and empty office parks where the software industry once stood. This happened to Detroit because jobs were literally the only reason to live there. The Bay Area has amazing weather, unbelievable scenery, world-class recreation, and tons of music and culture. If the jobs of today leave, the jobs of tomorrow will replace them simply because the area itself is one of the best in the country. Detroit is a flatland nowhere in frozen tundra flyover state. "A bunch of lakes" is only going to keep an extremely small subset of people interested.

Apocryphon 6y ago
Yeah, it's like if LA was to lose the entertainment industry, the Mediterranean climate alone ensures it a highly desirable place to live. And both SF and LA are major ports.
ardy42 6y ago
> The Bay Area has amazing weather, unbelievable scenery, world-class recreation, and tons of music and culture. If the jobs of today leave, the jobs of tomorrow will replace them simply because the area itself is one of the best in the country. That's not necessarily true. Maybe the jobs go and never return, but the recreational desirability leads it more in the direction of an Aspen: more of a place for recreation than business.
OkGoDoIt 6y ago
My job is the main reason I live in San Francisco. In my opinion Colorado is much more beautiful, Boulder has a lot of the advantages of living in a big city but also so many fewer disadvantages. Personally I’m not a big fan of the kind of nature of the bay area has to offer. I grew up in the Northeast and the southeast, and I miss the huge deciduous trees and the fall-time colors. The Bay Area is pretty, but doesn’t hold a candle to the beauty of Michigan or Colorado or Tahoe in my opinion. Obviously different people have different preferences, but for every person who believes the bay area is the perfect place to live regardless of their career, there’s at least another person who doesn’t particularly like it and has their own idea of a perfect place to live.

pydry 6y ago

1950 was also the point when: * Auto manufacturers consolidated to 3 big companies and started to more consistently put smaller startup automakers out of business. * They got into protracted fights with unionizing workers. * They stopped building manufacturing plants in detroit itself and built them further afield to cut labor and land costs. I think we can see these trends being mirrored in the tech industry right now.

redisman 6y ago
Maybe 1.5 or 2 out of 3, but > unionizing workers does not sound like SV today. You're also missing the main reason, superior products from Japan and Germany. We don't really see that as of now. China and EU have a handful of competitive companies.
- option 6y ago
  please, what kind of competitive advantage EU has in tech? Sure, China has some advantages but it also has huge disadvantages as well.
  - jdminhbg 6y ago
    I think you misread the parent. They're saying the EU and China only have a handful of companies competitive with the SV giants.
- deleted 6y ago
  [deleted]
- inglor_cz 6y ago
  Today no, but the gig economy is probably not sustainable without some pushback. So, not core tech workers, but the worker bees at Amazon ... ?
- normaljoe 6y ago
  It's not that SV is union workers but that union workers have a higher labor cost. Kind of goes to why GM started Saturn in TN and why Saturn cars where cheap in the late 80s, no unions thus cheaper labor. SV labor is expensive compared to other markets (see below). I have worked in SV and elsewhere and mostly elsewhere is 1/2 the pay as SV and without the things like free lunch / coffee bar / shuttle service. SV doesn't need unions because the turnover rate is so high that the companies are basically providing what unions would negotiate just to compete (free lunch / coffee bar / shuttle service). It's still a buyers market from the employee standpoint. I do think SV is not quite at the inflection point just yet, but it is moving in that direction. The irony in this is actually that the cost of labor is high because the cost of living is high. The cost of living is high because of the NIMBY folks preventing multiunit housing. If the ballon collapses those NIMBY folks would see their precious house values decline. Finally as to superior products most Japanese and German cars sold in the US are still built in the US, just not Detroit because of.... Wait for it.... Union Workers.

maxerickson 6y ago

Much of Detroit moved next door to Oakland County. ~400,000 in 1950. ~700,000 in 1960. ~1.2 million today.

Apocryphon 6y ago
Funny how that's nearly a possibility for SF as well.
- bcrosby95 6y ago
  SF's population has been fairly stable since the 50's. And it didn't really take part in the tech scene until the 00's. The population of SF isn't going anywhere. If tech transplants move out, there's plenty of people that will want to move back. They won't be as rich though so prices will probably drop a bit.
  - Apocryphon 6y ago
    I was referring to both cities' proximity to places named Oakland.
pydry 6y ago
Much of this was driven by white flight.

heimatau 6y ago

> I'd compare Silicon Valley to Detroit with a century time lag. I had this perspective for a brief moment but as Charlie Munger said "Show me the incentives and I'll know the outcome". I think what many people are missing is that SV is heavily incentivized to be a place of big money. The real estate. The commercial climate. Etc.

silicon2401 6y ago

Based on this, what would be the best way to poise oneself to profit off of future changes in the tech industry?

shuntress 6y ago
Use you pre-existing fortune to buy assets that will increase in value.

deleted 6y ago

[deleted]

birdyrooster 6y ago

Detroit is flipping miserable to live in and the Bay Area has a natural air conditioner in the Pacific Ocean. Why do people keep overlooking this? I lived in a boom and bust steel and auto town in the midwest, people left because the only thing keeping us there was a paycheck and family. The Bay has much more to offer than Detroit. Not even comparable.

majormajor 6y ago
But that doesn't mean you're gonna have a great economy forever. That means property will be expensive forever, because there will always be rich people looking to move or retire there, but will that turn into innovative or well-paying jobs for people?
- birdyrooster 6y ago
  It actually does because in Detroit the only reason to be there no longer exists in a meaningful capacity whereas The Bay Area will for the foreseeable future.
  - majormajor 6y ago
    There are a LOT of rich towns full of money in Europe - where this sort of thing has been going on for a LOT longer than the 100 years or so of California-in-the-US history - where the rich folks live that don't feature booming innovation economies. When even the current crop of tech workers get priced out of California by the continual influx of wealthy folks seeking out the climate you won't see SF turn into Detroit, but it's not gonna be the SF of the nineties->now.
    - Apocryphon 6y ago
      The San Francisco Bay is one of the largest natural harbors in the world. The tech industry might become like Detroit, the cities themselves will be fine purely because of logistical importance alone.
6y ago

keithwhor 6y ago

I really enjoyed the history of Detroit but; > Eventually Silicon Valley will end up like Detroit, with abandoned 4-over-1 condo complexes and empty office parks where the software industry once stood. This implies that there's a glut of housing that's been created to home Silicon Valley technologists, which couldn't be further from the truth.

sroussey 6y ago
Yeah, I think the worst case is that Victorian houses divided into 4 condos revert to being a single house again.
nostrademons 6y ago
The housing glut hasn't been constructed yet. Most of Detroit housing stock dates from 1925-1945, which puts it at least 5 years out.
- burlesona 6y ago
  There is absolutely zero chance of a housing glut in California. The regulatory environment is so violently opposed to housing that the vast majority of people who live there could never afford to move. When the end comes, I think it is more likely to be because some thing finally tips such that people leave the area and (because houses are priced at the margins) prices begin to actually drop. Once that happens there could easily be a rush for the exits, as nobody wants to be upside down on a $2 million loan.
  - nostrademons 6y ago
    That scenario has happened repeatedly - 91-94, 01-02, 08-11, and now from 2018-present. It usually plays out as a ~10-25% drop in housing prices over a few years as the market exhausts itself, followed by a resurgence as wages & demand starts catching up again. https://havengroupsf.com/wp-content/uploads/2017/12/30-years-of-san-francisco-bay-area-real-estate-cycles.jpg https://havengroupsf.com/wp-content/uploads/2017/12/30-years... The way I think a glut could arise is when a tipping point is reached and pro-housing renters outnumber NIMBY owners on city councils. This has happened already in Mountain View (which was notoriously anti-development until a group of young pro-housing Googlers packed the city council and voted out all the NIMBYs in 2014, and now green-lights nearly any housing development), Sunnyvale, Redwood City, and San Mateo, and may make its way down to San Jose and up the rest of the peninsula. At present a lot of Bay Area communities are starting to look more like Paris: dense ~4 story apartment buildings, public squares, outdoor dining on pedestrian thoroughfares, etc.

apengwin 6y ago

> Eventually Silicon Valley will end up like Detroit, with abandoned 4-over-1 condo complexes and empty office parks where the software industry once stood. I'm certain this will never happen simply due to the superiority of California's climate.

dougmwne 6y ago
I'm certain there are many pleasant and warm places the globe over that are poor and isolated. People go where the jobs are. Nice weather is secondary. If we all start working in VR and location becomes irrelevant, then all bets are off. But why even have cities then?
- vinceguidry 6y ago
  Nice weather really isn't secondary. It's the entire reason Southern California is what it is. Anywhere the weather's nice, people flock. If location becomes irrelevant, that will just make people flock even faster. Everywhere the weather sucks, ask around and you'll find the cheap place people go all the time for vacation, and wish they could live, if they could but afford it. For Atlanta where I live, it's nearby Destin, or Savannah. Nice weather is a primary determinant of where people choose to retire. It pumps land values up 10x or more. I'll turn your argument around and say that the only truly location-dependent industries are extraction based. Everything else moves where the people are. And people will pay through the nose to live where it's nice.
  - shuntress 6y ago
    > I'll turn your argument around and say that the only truly location-dependent industries are extraction based. Everything else moves where the people are. I don't think I would call the transportation industry (as in: ports, trains, planes, and related infrastructure) "extraction based". But that is an example of something very clearly location-dependent.
  - inglor_cz 6y ago
    "Anywhere the weather's nice, people flock" Well, yeah, prior to Covid, Andalusia in Spain was a favorite tourist destination. It really is lovely sitting at 10pm with a sangria in hand on a historic staircase of a palace and watching the nightlife milling around. But all this flocking is temporary. People do not move there to start businesses. (They do to Gibraltar, but that is a tax haven.) They just enjoy they stay, spend some money on recreation and fly back to gloomy-but-rich Amsterdam, London or Hamburg.

x87678r 6y ago

SV will probably end up like NJ, still one of the most advanced and prosperous places in the USA.

icedistilled 6y ago

There's a big difference between Detroit and SF (or California in general). Weatherwise it's one of the best places to live in the USA. The smoke issue is new but it's unlikely to be this bad most years. Detroit is unfriendly a much greater portion of the year It's likely the craziness in the Bay will subside but I would be extremely shocked if it began to resemble Ddetroit. Some of the more remote suburbs that haven't historically been places people would commute from might fare badly though.

chrismcb 6y ago

Silicon valley predates the internet era. Going all the way back to the 60s