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Data Sheet—Why Silicon Valley Still Reigns Supreme

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The Economist has published a lucid, well-reasoned, and interesting reported essay on why Silicon Valley, relatively speaking, is finished. Aaron linked to it last week and I, too, encourage you to read it.

I also think it’s wrong. Indeed, though well-argued and backed up both by compelling facts and impassioned quotes, the article is what journalists call an “evergreen” and also a bit of a “thumbsucker.” In short, I’ve read—and heard—it all before. Silicon Valley is too expensive, its people are too obnoxious, the traffic is too horrible, and other regions are hungrier. In its own finely honed words: “The cost of living and operating a firm will drive more people away. The dominance of the companies that have generated its current wealth will change the paths to success for those who stay. And unfavorable governmental policies will further harm the Valley’s dynamism.”

This is all true and then some. For all its phoniness and obsession with money, this region can be tough to take. But these truths may be beside the point. I’m no cheerleader for Silicon Valley. But its unique attributes—the concentration of wealth and talented people, a risk-taking and meritocratic culture, the proximity to great universities, the weather—make it unbeatable, at least in any sustained way, by any other region.

One tell of an argument gone sour was the sheer number of people around my age quoted in the article. These are Silicon Valley veterans, sources of mine for years, that have fewer years in their careers ahead of them than behind them. They have wisdom in spades. But it’s no surprise that they’re tired of the Valley. I’d rather hear what the hungry youngsters think about their prospects here. (One was quoted convincingly, but isolated anecdotes do not a thesis make.)

One person quoted in the article, scholar AnnaLee Saxenian, gave me pause. She wrote the definitive explanation of Silicon Valley’s success, particularly compared with the ossified tech industry in Boston. Her monumental work, Regional Advantage, which I’ve frequently cited to explain Silicon Valley’s staying power, came out in 1994. She believes Silicon Valley has become more like Boston, a damning assertion if ever there was one.

It’s tough, but not impossible, to dethrone the king. Despite its many problems, Silicon Valley still reigns.

***

Chip Bergh, CEO of apparel company Levi Strauss & Co., has a sharply worded essay on Fortune.com today about what his company is doing to stop gun violence. It’s a three-part corporate action plan to live up to the values Levi Strauss stands for. I recommend it, too.

Adam Lashinsky
@adamlashinsky
adam_lashinsky@fortune.com

NEWSWORTHY

Mug shot. The billionaire CEO of the Chinese e-commerce company JD.com, Richard Liu, spent 16 hours in a Minnesota jail after being accused of sexual misconduct. JD.com said Liu had been subject to a false accusation and “local police quickly determined there was no substance to the claim.” However, the case is still active—and Minneapolis Police Department spokesman John Elder told the Wall Street Journal that Liu was “released pending formal complaint.”

Volume, volume, volume. In bigger picture China news, the country is considering merging its second and third-largest wireless carriers to speed up the transition to faster 5G networks, Bloomberg reports. Combining China United Network Communications and China Telecommunications would create a carrier with 590 million customers, still trailing China Mobile’s 900 million, but larger than any other carrier in the world.

Be more flexible. Big phone screens are great for reading emails and browsing the web, but less great for cramming into a tight pocket or purse. Samsung to the rescue? After years of tinkering, the company will deliver a folding screen smartphone this year, head of mobile DJ Koh told CNBC. The touch screen will function in a smaller, folded state or open wider for tasks that require a bigger picture.

Riding the currents. Starting in October, Apple will require that all apps include a link to their developer’s privacy policy (that requirement used to apply only to subscription apps). The new rule could be related to the EU’s General Data Protection Regulation. At the same time, apparently following a different country’s rules, Apple watch users in Russia say that the device’s gay-pride themed watch face is blocked in the country. The Apple watch was the top-selling smartwatch in the world in the second quarter, Counterpoint Research said on Friday, though it’s the cheaper, slower Series 1 leading the way.

Riding the currents–literally. A robotic boat made the first successful unmanned sailing trip across the Atlantic Ocean, completing the journey in under three months. Offshore Sensing’s SB Met left Newfoundland and reached Ireland at the end of August. “We’ve proved that it’s possible to do,” CEO David Peddie said.

Face time. Tech leaders Sheryl Sandberg, COO of Facebook, and Jack Dorsey, CEO of Twitter, will appear at a congressional hearing on Wednesday looking into Russian interference in the 2016 election, but Google CEO Sundar Pichai will not. The Wall Street Journal reported on Monday that Dorsey has sometimes weighed in on decisions about whether or not to ban particular content, like allowing conspiracy theory spreader Alex Jones to remain active on Twitter. The company denied that Dorsey was involved.

FOOD FOR THOUGHT

You may have read that today is the 20th anniversary of the founding of Google. It’s also the 10th anniversary of the introduction of Google’s Chrome browser, which recently hit 60% market share. CNET’s Stephen Shankland explores the implications of one browser capturing the market, for good and ill. Over-concentration could give Google too much influence, he writes:

Web developers naturally concentrate their energy on the technology their website visitors use, and today, that’s mostly Chrome. Fair enough—but tough luck if you’re using another browser. The list of high-profile companies supporting Chrome but not other browsers includes Bank of America, Slack, Groupon, and Airbnb.

“I’m not necessarily worried what Google would do with 60 or 70% market share. I’m more worried about what the web community would do,” by supporting only Chrome, [web developer, author Brad] Frost said.

Google is guilty, too. Offline access to G Suite’s word processor and spreadsheet and Gmail messages requires Chrome if you want to use those tools without a network connection. The Allo messaging service and Google Play Music only worked only on Chrome initially. Google Flights gave Firefox the cold shoulder for a time, and Firefox users went months without full Hangouts chat abilities.

IN CASE YOU MISSED IT

Google’s 20th Anniversary: How the Search Giant Went From a Stanford Dorm to the Top of Tech By Glenn Fleishman

Look Out, Tesla: Luxury German Car Brands Pile Into Electric SUV Market By David Meyer

Google’s New AI Tool to Fight Child Sexual Abuse Will Help Reviewers Scan 700% More Material By Hallie Detrick

British Fintech Platform Funding Circle Wants to Raise $386 Million in a London IPO By David Meyer

Here Are the Tech Stocks That Thrived (and Dived) This Summer By Kevin Kelleher

BlackRock Vote Piles Onto Elon Musk’s Mounting Troubles By Chris Morris

BEFORE YOU GO

Fitness centers and nap pods are growing perks, though available only to a fraction of workers. But the top benefit people would like to have? Access to natural light and views of the outdoors, according to a survey by HR advisory firm Future Workplace. So crack open a window, and enjoy the last days of summer.

This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.