Germany’s Silicon Valley

By focusing on the site of “The Factory,” future archeologists digging in Berlin could learn a great deal about how technological changes in the previous three centuries transformed the world.

This 130,000 square foot building was a brewery in the 19th century and an air raid shelter in the 20th century. Now, in the early 21st century, it is mecca for Europe’s entrepreneurs and high tech workers. The Factory is also a testament to the late 20th century political winds that swept through eastern Germany and East Berlin. It overlooks an area where, during the Cold War, East German watchtower guards shot at people trying to escape to West Berlin.

Today, the retrofitted factory “is packed with all the perks of a Silicon Valley campus: nap rooms, scooters, 3D printing stations,” reports Bloomberg Businessweek. “It’s a social club for startups,” the Factory’s co-founder told the magazine. But it’s not all fun and games. “A decade ago there were a few dozen tech startups in Berlin. Now there are 2,500, and the Investitionsbank Berlin, the government’s regional economic development agency, says there are 70 percent more digital jobs there than there were in 2008,” Bloomberg Businessweek reports.

And these startups are giving German’s big high tech companies a run for their money when it comes to attracting hardware and software developers. A 27-year old code writer who moved from Austria to Berlin told the magazine, “I really want to work for a startup. You have more responsibilities. It’s not just 9-to-5. You actually change something and your opinion matters.”

Connecticut’s newly established CTNext hopes to give The Factory, Silicon Valley, South Boston and other innovation centers a run for their money. The legislature gave this Connecticut Innovations, Inc. subsidiary the resources to help grass roots organizations make it easier for innovators and entrepreneurs to hook up and launch new businesses. (See the OLR bill analysis for SB 502, May Special Session, sections 1-9.)

Apps for Homeless People

Small, low-cost changes can often yield significant results. Here’s what we mean: according to a recent Governing article, homelessness has been declining in several major cities, excluding Washington D.C., where it has grown by nearly 13%. The problem seems intractable, but those who work directly with homeless people are tackling the problem by using technologies many of us take for granted.


For example, the New York Times recently reported how some Silicon Valley tech companies have begun providing cell phones with internet access to nonprofits who distribute them to people likely to benefit from having them, including the homeless.  In some cases, the people receiving the phones pay for the phone service by performing tasks, like picking up trash, for the nonprofit providers.


The internet is the way we now do business, and without it, as the Times reports, it can be “difficult to find a home, apply for a job, sign up for classes, make homeless shelter reservations or find soup kitchens.”


Serving the information needs of low-income people is also stimulating economic development. For example, “Twitter is building a $3 million computer lab for low-income people, across the street from its Tenderloin headquarters,” according to the article.

Avoiding the "Failure Loop"

In previous blogs, we discussed what the experts were saying about how to nurture and sustain people and groups that concentrate on inventing new products, processes, and services. Some mentioned unique cultural factors. Others focused on how universities like Stanford encourage professors and students to interact with people in business, government, and nonprofit organizations. Still others attributed innovation to concentrations of diverse people living in relatively small areas, like Boulder, Colorado. One theme running through these observations is that quitting isn’t an option, despite what W.C. Fields had to say about trying and failing.

Source:

http://www.gypsynester.com/fields.jpg

And that’s a good thing, because innovation and failure go hand-in-hand, according to NPR’s “Planet Money” founder Adam Davidson. People and organizations that innovate risk failure. Their ideas may not work or, if they do, others may come along and exploit them to their advantage. Davidson calls the time between innovation and failure the “failure loop,” and the loop is getting shorter and shorter as innovation keeps accelerating. The loop’s fallout can be seen in the buildings that dot Silicon Valley.  “These squat buildings have thick outer walls that allow for a minimal number of internal support beams, creating versatile open-floor plans for any kind of company,” Davidson wrote. The companies that occupy these buildings “expand quickly or go out of business, and the office has to be ready for the next tenant.”

The failure loop started to shrink in the late 1800s when innovative people developed the legal, financial, and organizational means to spread the risk involved with innovating. The business corporation, for example, “acts as a giant risk-sharing machine, amassing millions of investors’ capital and spreading it among large number of projects, then sharing the returns broadly too,” Davidson stated. But new organizational forms are nipping at the corporations’ heels.  Thanks to computers, the iconic corporate pyramid is giving way to loose, decentralized networks of individuals and small groups.


The shrinking failure loop also disrupts how we live and work. “Rather than undertake one career for our entire working lives, with minimal failure allowed, many of us will be forced to experiment with several careers, frequently changing course as the market demands—and not always succeeding in our efforts.” How do we cope with these seismic disruptions? By building “a new set of institutions, something like the societal equivalent of those office parks in Sunnyvale (California), that help us stay flexible in the midst of turbulent lives,” according to MIT economist Daron Acemoglu, whom Davidson discusses in his article. Specifically, “we’ll need modern insurance and financial products that encourage us to pursue entrepreneurial ideas or the education needed for a career change. And we’ll need incentives that encourage us to take these risks; we won’t take them if we fear paying the full cost of failure.”


Click here to read more in a New York Times Magazine article. 

Nature Versus Nurture and Innovation Districts

In an earlier posting, we asked if state governments could replicate Silicon Valley, a region bubbling with innovative and entrepreneurial people, businesses, and research universities. We looked at Deborah Perry Piscione’s The Secrets of Silicon Valley: What Everyone Else Can Learn From the Innovation Capital of the World, which outlines many unique and intangible things that stimulate and sustain innovation in the Silicon Valley region.

image: Rocky Mountain Institute

The Brookings Institute’s Bruce Katz asked a similar question about the federal government’s role in supporting “innovation districts,” relatively dense urban areas where research institutions, R&D intensive companies, entrepreneurial firms, and business incubators cluster together, feeding off each other’s ideas and concepts. Sustaining this feeding frenzy are land use practices that make these areas “livable, walkable, bike-able, and transit connected.”

Innovations districts tend to spring up from the “collaborative efforts of local institutions and leaders and organic market dynamics,” Katz stated. Consequently, there’s no need for the federal government to play a leading role. After all, “emerging districts around the country differ markedly in their leadership structure, sector orientation, and existing economic, physical and networking assets—obviating any ‘one size fits all’ response.”

What the federal government should do, according to Katz, is:

1. keep funding basic and applied research at the major research institutions in the heart of the districts;
2. “encourage a more robust school-to-work pipeline for sub baccalaureate workers in science, technology, engineering, and math fields”; and
3. fund mass transit, affordable housing, and mixed use development projects in the districts.

In short, the federal government should act as a catalyst, spurring the initiatives that are already happening in these districts. But it “should do so in a humble way—doing what cities and metro areas can’t (e.g., providing a strong national platform for research and innovation) and providing support that is respectful of local variation and supportive of local networks and ecosystems,” Katz opined.

Cloning Silicon Valley

If biologists can clone sheep, then policy makers should be able to clone Silicon Valley, right? Well, it might be easier to copy an organism’s DNA than to replicate a region’s culture, including one like Silicon Valley’s, the region south of San Francisco. After all, culture boils down to the beliefs and values people share and reveal in their words and actions.  

Deborah Perry Piscione focused on Silicon Valley’s culture in her new book, The Secrets of Silicon Valley: What Everyone Else Can Learn From the Innovation Capital of the World. “There is a shared set of attitudes, values, goals, and practices that characterizes Silicon Valley that is different from any place in which I have lived or spent considerable time, including Miami, London, Washington, or New York,” Piscione observed.

She went on to describe the culture—the ecosystem—that emerged over time that set Silicon Valley apart from those other places. “The secret to this type of economy is the right mix of people, those who are risk tolerant, constantly adapting, and don’t enjoy being sedentary. A collaborative culture where people trust one another to cross pollinate and strengthen an idea’s commercial viability is crucial.  And most importantly, an acceptance of failure must be in place.” 

She also described the ingredients nurturing the culture, including:

• Stanford University and its long-standing relationships with business and government leaders and focus on research with real world applications;
• immigrants and other newcomers who “didn’t bother wasting energy trying to ingratiate themselves within established organizations, instead starting their own social networks, investment clubs, and alliances with strategy partners”;
• entrepreneurs who weren’t afraid of failure or looking at things in unusual ways; and
• farsighted venture capitalists who want to coach budding entrepreneurs, not milk them for a quick return on investment.

The other things that mark Silicon Valley’s culture include intangible factors like restaurants and coffeehouses where innovators, entrepreneurs, and investors can strategize in a relaxed, casual atmosphere; a quality of life that balances work and family and promotes healthy lifestyles; and family lifestyles and schools that teach children to think and act like entrepreneurs.

 

Can you replicate Silicon Valley? No, but, as Piscione wrote, you can learn from its commitment to “continuous innovation and a culture of creativity.” After all, “there is nothing inherently special about the people in Silicon Valley—it’s the way they interact and collaborate that makes the magic.”

 

Click here for more from Deborah Piscione about Silicon Valley’s secrets.

Click here for the recent PBS special on Silicon Valley.

Super Efficient Solar Power

The May/June edition of Technology Review lists super efficient solar power as one of its ten breakthrough technologies. Solar panels on the market today consist of cells made from a single semiconducting material, usually silicon. Since the material absorbs only a narrow band of the solar spectrum, much of sunlight’s energy is lost as heat: these panels typically convert less than 20% of that energy into electricity.

In contrast, a technology being developed by Harry Atwater and his colleagues at CalTech would have an efficiency of at least 50%. It would use a design that efficiently splits sunlight, as a prism does, into six to eight component wavelengths—each one of which produces a different color of light. Each color would then be dispersed to a cell made of a semiconductor that can absorb it. Another design would employ nanoscale optical filters that could filter light coming from all angles. And a third would use a hologram instead of filters to split the spectrum. While the designs are different, the basic idea is the same: combine conventionally designed cells with optical techniques to efficiently harness sunlight’s broad spectrum and waste much less of its energy.

Atwater argues that achieving ultrahigh efficient designs should be a primary goal of the solar industry, as it is “the best lever we have” for reducing the cost of solar power.

Lessons from the Evergreen Solar Bankruptcy

According to CNET.com’s Martin LaMonica, the recent bankruptcy of solar panel manufacturer Evergreen Solar offers an important lesson for those in rapidly developing green industries: don’t try to do everything yourself. The company, which in 2008 had a patent on making silicon solar wafers more cheaply than anyone else, eventually found that its own proprietary processes kept it from being able to outsource steps in the manufacturing process to other manufacturers (particularly in China) who could perform them at less cost. With costs in solar manufacturing rapidly decreasing over the past three years, eventually Evergreen simply couldn’t compete.