The Silicon Valley is an area in the state of California, USA. It is widely known as the center for technological innovation and progress in the world. Upon its inception, it was restricted to the Santa Clara Valley in the Santa Clara county. However., due to a rapid expansion of the various industries housed within the area its borders have expanded to include the nearby San Mateo County as well. The major city included in Silicon Valley in San Jose, which is the tenth-largest city in the USA. It is the city with the third-highest GDP per capita income in the entire world.
The origin of the name was due to a large number of silicon-based transistors and circuits being produced in the area. This led to the appending of the name ‘Silicon’ to Santa Clara Valley. Eventually, it was just shortened to Silicon Valley. This adage may be outdated now, as the area serves as the headquarters for a great magnitude of tech companies, offering a variety of services. These companies include but are not limited to Google, Facebook, HP, Apple, and Netflix.
Owing to the personal connection that a lot of people have to their technology company of choice, the area has become a huge tourist hotspot, with as much as 11% of all income coming from tourism-related activities. Here we take a look into some amazing associated with the global leader in technology.
Quick facts
Life in Silicon Valley is known to be extremely fast-paced, with long work-days and even longer parties. Let’s take a page from their book and quickly get astounded by some metrics of this fascinating location.
- Thirty of the fortune 1000 companies are headquartered in Silicon Valley.
- The name Silicon Valley was coined in January 1971 by Don Hefler.
- There is a show named Silicon Valley, following a new tech start-up set in Pao Alto.
- More than half the people in the Silicon Valley hold a bachelor’s degree.
- Per capita, It has highest percentages of households with over $200,000 income in the country.
It’s all about the location
As the popular adage goes, ‘Location is Everything.’ The Silicon Valley has been THE location to be in the past few years. Ever since the large boom of major corporations in the area, more and more people have flocked to the Valley in hopes of being the next Steve Jobs. Here we will take a look at the location of Silicon Valley, the people living in to and how it all just work.
1. HP created Silicon Valley in 1938 in a garage: Bill Hewlett and David Packard were the founders of the famous tech company HP. They were the first people to innovate in Silicon Valley when they created their audio oscillator in 1938. It was created in true Silicon Valley fashion, in their garage! This led to the founding of HP and the beginning of the Silicon Valley, dominating the tech world for the next century.
(Source: Silicon Valley Guide)
2. Silicon Valley is not just in one city. Its 30 cities and five universities: Upon hearing the name, one might easily assume that Silicon Valley is just one localized plot of land between two mountains. That is very far away from the truth. They are under Silicon Valley consists of 12 major cities, 18 smaller cities, and five huge universities, including the world-renowned Stanford University.
(Source: Visit Silicon Valley)
3. It was once nicknamed ‘The Valley of Death’ and also ‘The Valley of Heart’s Desire’: Silicon Valley wasn’t always called that. It has had many names since it was founded in the early 1800s. It began as being called ‘The Valley of Heart’s Desire.’ This was mainly due to the prevalence of fruit orchards in the valley. These orchards were placed alongside massive fields of flowers and were paired with a mild pleasant climate almost year-round.
Following the tech revolution, and the growing prominence of the Silicon Valley in the country, it was given a much more sinister nickname. It began being known as ‘The Valley of Death.’ This was because the people working in the various factories around the country believed that the computers and automation that was coming out of this valley would lead to all of them losing their jobs.
(Source: Britannica)
4. The USA Department of Defense has a facility in The Silicon Valley: The USA Department of Defense is the government’s department to research new technology to aid the armed forces in various ways. Their newest facility, called the ‘Defense Innovation Unit,’ is based in Silicon Valley, right next to all the giant tech companies. This department was created to invent high tech communication devices for the US Armed forces, and as a result, benefits from being stationed in the heart of the world’s tech center.
(Source: Defense Innovation Unit)
5. Silicon Valley was originally a US Naval Base: The US Navy had a long-standing base, called Moffet Field, situated in Silicon Valley long before HP was founded. In fact, the audio oscillator that was HP’s first product was created for the naval forces. The naval base financed the early growth of a lot of the Silicon Valley companies to benefit from their innovation that much quicker. This continued until around 1990 when the Navy decided that the impending exploding growth of the area was making it unsuitable to operate a military base. The base lay unused till 2014 when the US Navy leased the giant swathe of land to Google for 60 years. Google has announced its new expansion on the naval land.
(Source: Military Museum)
6. The term ‘Silicon’ has been appended to multiple locations around the world: Silicon Valley has become a model for tech centers around the world. So, a lot of these hubs have started to take the name of ‘Silicon’ for themselves. Some of these examples are India’s ‘Silicon City,’ i.e., Bangalore, Israel has ‘Silicon Wadi,’ Japan has ‘Silicon Islands,’ i.e., Kyushu, etc. There are literally hundreds more locations with the name ‘Silicon’ around the world, with over 100 in the USA alone.
(Source: State Tech Magazine)
7. Silicon Valley has one of the most diverse workforces in the world: Silicon Valley is a place for talented and skilled individuals to succeed. A lot of these individuals are not white males, and that is a very good thing. Silicon Valle has some of the most diverse workforces in the world. Only around 35% of the people working in this area are white males, the rest being divided into different ethnicities and races.
(Source: Reveal News)
8. Silicon Valley families tend to have fewer children, later in life: Whether it is due to the large cost of living or the nature of the job culture in the Valley, families tend to have a smaller number of children. The average age of the women having a child is 30 in the valley. There are also only 1.88 children in each family, as compared to 2.12 in the rest of the country.
(Source: Joint Venture)
9. Silicon Valley is currently looking into immortality: Thinking of Silicon Valley, one pictures giant tech campuses with gleaming machines, pumping out extremely high tech equipment for every which purpose. However, one outlandish emerging field of interest for the tech-hub is the research into immortality. Yes, you read that right, the engineers and scientists in Silicon Valley are trying to achieve the same thing that Voldemort wanted. There are currently three major paths to immortality that are being researched. The first one is gene therapy to reduce the length of telomeres on human DNA, the second one is to upload a human brain into an artificial body using quantum computers, and the final one involves trying to slow down the aging process.
(Source: The Guardian)
10. 52.5% of the immigrants are from Asian countries, with a majority of them from China: The largest chunk of the immigrants living in Silicon Valley come from Asian countries, especially the southeastern side. China leads the pack with 17% of the immigrants, India comes in second with 14%. Vietnam makes up 10.5%, and the other 11% of Asian immigrants are from a variety of countries.
(Source: Silicon Valley Indicators)
11. Indian and Chinese individuals run one-quarter of all tech firms in Silicon Valley: The image of Asian people as being the smart kind, only focusing on work and success holds true when it comes to the Silicon Valley. Indian or Chinese individuals run more than 25% of the companies in the Silicon Valley.
(Source: Silicon Valley Indicators)
12. The number of Indian engineers in Silicon Valley is 1.5 times more than American engineers: The figures of the companies being led by Indians and Chinese are also mirrored in the number of people working in these companies. As many as 27% of all tech-based workers in Silicon Valley are Indians, while the number of USA citizens working in Silicon Valley is 16%.
(Source: Joint Venture)
Money, the final goal of every company
Making a profit is arguably the goal of every company in the world. Almost no one else understands that as much as the multitudes of companies in the Silicon Valley. The Valley is one of the highest-earning areas in the world, with the cost of living to match.
Here are some fascinating monetary statistics about the Silicon Valley.
13. Pao Alto is one of the richest cities in the USA due to the Silicon Valley: Pao Alto used to be a small cannery and farming town before HP was founded. Since then, a whole host of major tech companies have made the city and the surrounding area their headquarters. This has led to Pao Alto being the fourth richest city (by per capita wealth) in the USA.
(Source: Patch)
14. 2nd Highest Per Capita income in the world as a nation: If Silicone Valley becomes an independent nation, it can be a second richest country in the world by per capita income. The per capita income beats that of Singapore, Luxumberg or Brunei. Only Qatar has higher per capita income that Silicon Valley.
(Source: Fox News)
15. Among top 45 countries by Nominal GDP: According to BEA(Bureau of Economic Analysis) numbers, Silicon Valley’s annual GDP is $275 billion, which is higher than that of Finland. Finland ranks among top 45 countries by nominal GDP. So, if Silicon Valley is a nation, it would rank among top 45 nations by total GDP! Obviously, High revenues don’t always translate into a high income due to the operating costs of a company. However, owing to the fact that a significant chunk of the Fortune 1000 resides in Silicon Valley, this small area of the world contributes nearly $250 billion in GDP every year.
(Source: MSN, The Guardian)
16. Owing to Silicon Valley, San Francisco has the highest average salary in the world: The executives working in Silicon Valley are ostensibly leading the world into a new era of technology, using their skills and hard work. They are handsomely compensated for their work, with San Francisco having the highest average salary in the world. An average individual working as an engineer in a tech company gets paid a salary of $112,390 per annum.
(Source: CNBC)
17. An empty dirt lot in Silicon Valley costs more than $110 million: The real estate prices in Silicon Valley are among the highest in the world. This is, of course, because of the higher rate of income for the people living in the area. Nothing demonstrates this fact better than the recent purchase of a 10.5-acre plot by Google. This small plot of dirt was bought by the tech giant for a jaw-dropping amount of $110 million! They plan on developing a small extension to their campus on this land, reportedly having contracted a construction company for nearly $1 billion for doing so.
(Source: Biz Journal)
18. The most expensive house in Silicon Valley costs over $100 million: While the previous fact showcased how expensive it is to buy a piece of land in the Silicon Valley, the sky-high real estate prices are also reflected in the cost of the houses in the surrounding area. The most expensive house in this area belongs to Sun Microsystem’s co-founder, Scott McNealy. He purchased the land in the mid-80s and built the gargantuan 20 bedroom house upon it. The house is now on sale for a sum of $100 million.
(Source: Business Insider)
19. Silicon Valley has a population of over three million: Silicon Valley, representing up to 30 cities, has a population of 3.1 million people. This places it firmly in the upper side of the middle of the most populous cities in the world. This is also one of the most diverse places in the world, with even distributing between Asian, Americans, and African-American populations. The Silicon Valley gets one international immigrant every 26 minutes, and loses a domestic migrant every 24 minutes, further increasing the diversity.
(Source: Silicon Valley Indicators)
20. Silicon Valley and the San Francisco Bay count for 13.5% of all startups in the world: While the formation of new startups has slowed down considerably in the Silicon Valley area, it still counts for almost 13.5% of new startups globally. Many other tech centers around the world are climbing the pack to compete with the Silicon Valley, including Shenzhen, China (counting for 11% of global startups) and Tokyo, Japan (counting for 8.7% of global startups).
(Source: Center for American Entrepreneurship)
21. Silicon Valley has one of the highest percentages of households with over $200,000 income in the country: According to the data collected by the national census, about 6.9% of all the households in the USA earn more than $@00,000 in a year. This percentage is much higher for Silicon Valley since it is the highest earning locale in the entire world. Approximately 26.1% of the households in Silicon Valley earn more than $200,000 annually, which is the highest percentage according to a location in the world.
(Source: US Government Census Bureau)
22. $81.81 billion were invested in the Silicon Valley in 2015 – 2017: Readily available venture capital has played a huge role in the success of the Silicon Valley. While this venture capital may be very slowly moving to other locations, Silicon Valley is still a very lucrative location for venture capitalists. In the financial year of 2016, the Valley received nearly $81.81 billion in Venture Capital being invested into it.
(Source: Center for American Entrepreneurship)
23. The growth of the venture capital invested in Silicon Valley rises at an average rate of 16% per year: As we saw, the amount of capital that flows into the valley is very high. This is mirrored in the percentage that the venture capital rises at. In the past four years, it has risen at an average rate of 16%. This figure may be falling over the years, but still represents a positive image for the growth of the Valley.
(Source: startupsusa.org)
24. The USA is the global leader in the amount of venture capital invested per capita due to the Silicon Valley and its contemporaries: Silicon Valley brings in a large amount of money in the form of investment to the USA. A lot of venture capitalists want to invest in the location, along with other cities in the country that are following Silicon Valley’s success. This puts the USA ahead of every other country when it comes to the money being invested.
(Source: startupsusa.org)
It’s not all good
While life in Silicon Valley may sound perfectly ideal, this is far from the truth. Having a large amount of money flowing into the area has brought with it a unique set of problems. There are some major issues with The Silicon Valley, some of which are listed here:
25. Silicon Valley is no longer the leader in filing new patents: For the longest time in its history, Silicon Valley led the pack when it came to filing patents for new and innovative technologies. This trend has shifted slowly but surely towards the East Asian countries. Silicon Valley has fallen to the third position on the list for the highest number of patent filings. Tokyo, the capital of Japan, is the current world leader, followed closely by Shenzhen, China.
(Source: Tech.co)
26. The wealth disparity in Silicon Valley is getting higher, like the rest of the country: As the money being invested into the area keeps increasing, so does the income gap between the different members of society. The number of wealthy individuals (with an income above $150,000) keeps increasing from year to year, as does the amount of people living below the poverty line. This is exasperated by the cities in the valley, not charging the companies sufficient taxes to maintain the status of their cities as being business-friendly.
(Source: Silicon Valley Institute for Regional Studies)
27. Silicon Valley has some of the highest gender-based wage gap: While the poverty and wealth disparity in Silicon Valley is increasing, one aspect of the wage gap that is increasing the fastest is the gender-based wage gap. Silicon Valley has one of the highest wage gaps, with some women earning as little as 70% of what their male colleagues earn. The one company that is an exception to this is Google, who found out in an internal study that they were actually paying their male workers less, possibly due to a conscious effort to prevent paying women less.
(Source: US Government Census Bureau)
28. They’re just playing a large game of Monopoly: The game of monopoly was created to be a critique of capitalism and consumer policies of the time. Soon in a grand twist of irony, it was turned into praising capitalism. Hence, it also the name for the top five companies of Silicon Valley. These companies have managed to create a virtual monopoly in terms of global business. This is mainly down the state of California not having and strong and enforceable anti-trust laws to break up the monopoly.
(Source: CNN)
29. The cost of living makes starting a family almost impossible: Due to the rapidly rising cost of living in the Silicon Valley, it is slowly becoming a place to shun for people looking to start a family. The average cost of a two-bedroom house in Silicon Valley is nearly $1 million. The schools are among the most expensive in the country.
(Source: Business Insider)
30. There is a growing divide in the wealthy and the poor on the issue of community development in the area: Even as the valley’s big businesses get larger and larger, the poorest members of the valley get even more destitute. The homeless rates in the area are among the highest in the country, with the numbers growing. The city of San Francisco has tried to pass laws to aid the homeless but has met with heavy resistance from the big corporations based there.
(Source: The Financial Times)
31. The Silicon Valley has an obesity rate of 58% in their residents, mainly due to stress: Stress is a huge side effect of the high paced life in the Silicon Valley. As many as 78% of the residents of the Valley report being ‘stressed.’ This high amount of stress has caused a large rate of obesity in the population of the Valley. As many as 1.025 in 2 people in the Valley are obese, with 37% of them being morbidly obese.
(Source: Joint Venture)
32. The population of the Valley is aging rapidly: The percentage of adults above the age of 65 has increased to an all time high of 33.7%. This is at a time when the number of people under the age of 18 has actually decreased. This presents a worrying prospect as this means that the workforce is due for shrinking soon.
(Source: Joint Venture)
Data Source & References
- Silicon Valley Guide
- Visit Silicon Valley
- Britannica
- Defense Innovation Unit
- Military Museum
- State Tech Magazine
- Reveal News
- Joint Venture
- The Guardian
- Silicon Valley Indicators
- Silicon Valley Indicators
- Joint Venture
- Patch
- Fox News
- The Guardian, MSN
- CNBC
- Biz Journal
- Business Insider
- Silicon Valley Indicators
- Center for American Entrepreneurship
- US Government Census Bureau
- Center for American Entrepreneurship
- startupsusa.org
- startupsusa.org
- Tech.co
- Silicon Valley Institute for Regional Studies
- US Government Census Bureau
- CNN
- Business Insider
- The Financial Times
- Joint Venture
- Joint Venture