Something big is happening just outside Copenhagen. The Danish government is creating nine islands in the Baltic Sea off the coast of Hvidovre in a development called Holmene. When completed in 2040, the islands will be home to 380 companies providing 30,000 new jobs.
The head of the Danish chamber of commerce, Brian Mikkelsen, told TV2 television in early January that he believes Holmene could become “a sort of European Silicon Valley”.
So, what is Silicon Valley anyway? It’s all these (and more): Stanford University, the Googleplex, Sheryl Sandberg, Menlo Park, venture capital, Larry Page, San Francisco, microprocessors, One Apple Park Way, software, Palo Alto, digital, Peter Thiel, dreams, money, millionaires, billionaires…
At the beginning of February, the technology news site TechCrunch reported that the Chinese giant Tencent was planning to invest in Reddit, which is famous for its discussion forums. Reddit is blocked in China, but money is a global language and with Reddit being valued at $3 billion (€2.6 billion), communism and capitalism are equally happy to speak IPO (initial public offering) and ROI (return on investment).
In a time of trade tension between the US and China, this example of Asian-American cooperation is seen as a positive thing, but we might have to wait a while before China’s president, Xi Jinping, takes part in a Reddit AMA (“ask me anything”) discussion. Back in 2012, when US president Barack Obama did an AMA, he was asked by a Reddit user whether he’d rather fight 100 duck-sized horses or one horse-sized duck. (He chose the latter.)
That’s Silicon Valley. It’s impossible to imagine Reddit existing anywhere else.
Companies, careers and fortunes rise and fall with amazing speed in Silicon Valley. Despite the mobility, however, the Valley has a rigid hierarchy. At the top of the pyramid are the entrepreneurs, the engineers and the venture capitalists. The more you are involved in starting or funding companies, the more respect you command. If you’re in recruiting, marketing or communications, people may not return your calls.
Growing public anger
But the “techlash” — the growing public anger about large Silicon Valley platform technology companies — might soon put an end to the hubris.
“In terms of economic policy, I want to set limits on the markets in which monopoly-class players like Facebook, Google and Amazon can operate. The economy would benefit from breaking them up. A first step would be to prevent acquisitions, as well as cross subsidies and data sharing among products within each platform.”
So writes Roger McNamee in Zucked, his new book about Facebook. McNamee is a well-known venture capitalist and an early investor in Facebook, but now he says that Mark Zuckerberg’s company should be regulated as a way to reduce its “harmful behavior”. If the books that kicked off 2019 are an indication of what’s to come, the techlash is just gathering momentum.
Shoshana Zuboff’s Surveillance Capitalism looks at the economics of the Silicon Valley titans, detailing the longer-term consequences of their form of capitalism for society. By providing free services that billions of people happily use, the platform providers can monitor the lives of those users in astonishing detail.
“Surveillance capitalism,” she writes, “unilaterally claims human experience as free raw material for translation into behavioral data.” In other words, all that data will be turned into products that anticipate what you will do now, soon and later.
For the author and political activist Barbara Ehrenreich, the personification of Silicon Valley hubris is Ray Kurzweil, the inventor and futurist, who since 2012 has been employed by Google, where he is the “director of engineering”.
In Natural Causes, Ehrenreich writes: “The reason why Kurzweil has transformed himself into a walking chemistry lab is to prolong his life just long enough for the next set of biomedical breakthroughs to come along, say in 2040, after which we’ll be able to load our bodies with millions of nanobots programmed to fight disease. One way or another, other tech titans aim to achieve the same thing. As Newsweek reports: Peter Thiel, the billionaire co-founder of PayPal, plans to live to be 120.”
Ehrenreich points out that Larry Ellison, co-founder of Oracle, finds the idea of accepting death “incomprehensible” and Sergey Brin, co-founder of Google, hopes to “cure death” some day.
Tests in Europe
Right now, however, the health of Silicon Valley is being tested in Europe, where the techlash is on the rise. Germany says that it will crack down on the way Facebook collects and combines data on its users. Paris, one of the most popular destinations for Airbnb, is at war with the company. The mayor, Anne Hidalgo, says the city will be suing Airbnb for $14 million (more than €12 million), due to the alleged listing of illegal rentals.
And in 2017 and 2018, the European Commission forced Google to pay a series of fines that amounted to almost $8 billion (about €7 billion).
Because of the techlash, the world’s love affair with Silicon Valley seems to be over. Except when it comes to making money, of course.
It’s raining cash in the Valley these days. Apple is the world’s most valuable publicly traded company again, after briefly losing the title to Amazon in January. Facebook has broken its own records for profit and revenue, despite increasing criticism of its business practices. And a crowd of tech companies is set to join the platform giants in the public market. Slack, the workplace chat app that millions check throughout the day, has filed for its IPO. Slack is now in the queue behind Uber and Lyft for a debut on Wall Street this year, while Airbnb and Pinterest are likely to follow, bringing fresh waves of money to Silicon Valley.
Fictional version?
When New York was drowning in money during the late 1980s, Tom Wolfe wrote a hugely successful satirical novel about class, politics, ambition, racism and greed in the city. It was called The Bonfire of the Vanities. The demand for a similar fictional version of Silicon Valley is growing. In December, Financial Times columnist Janan Ganesh demanded to know why San Francisco didn’t have its own Bonfire of the Vanities.
Kathy Wang has made a start with Family Trust. The novel follows the ups and downs of the Huangs, a Taiwanese-American family. The daughter, Kate, is a director in the secret division of X Corp (Google, basically) who works for Sonny Agarwal, an eccentric visionary whose idea for a total surveillance system gets stolen by an X Corp manager.
Kathy Wang, who grew up in Los Altos, spent six years working at Seagate Technology, after three at Intel. She wrote Family Trust while pregnant with her second child. “For first novels, they say write what you know,” she explains.
One of the most memorable moments in Family Trust happens at the Consumer Electronics Show in Las Vegas, where Kate is sexually harassed by the founder of a bra start-up run by men. So she steals his idea. Kate’s friend Camilla comments: “Everybody steals. It’s the nature of the business.”
In the era of the Fourth Industrial Revolution, when companies win by being the first and fastest to add intelligence to everything they make, many of the smartest and most talented people in the world still dream of Silicon Valley. China wants to attract the best and brightest Indian, Arab, Brazilian, European, Israeli and Korean immigrants, but most still prefer to go to California.
No matter how many islands they build near Copenhagen, it will be difficult for the Danes to reproduce Silicon Valley. Despite the pressure and the techlash, people claim that the feeling they get when driving along Interstate 280, the highway that runs across the San Francisco Bay Area, is heavenly.
As they say in Silicon Valley: “If you’re offered a seat on a rocket ship, you don’t ask what seat. You just get on.”