Is Silicon Valley really losing its crown?

Where is the heart of the technology industry?

The simple answer is “Silicon Valley,” a term that now generally means the San Francisco-San Jose-Oakland area of California. There are other options: The two largest public cloud providers, Microsoft and Amazon, are based in the state of Washington. Europe’s tech scene has been busy in recent years, meaning that it can’t be ignored in any such conversation. And the combined tech industries of China and India form a bloc that carries material heft.

So there are contenders. But Silicon Valley has historical centrality in the tech industry — it’s a hub of startup and major corporate technology activity stretching back decades, one that has been able to create a venture capital flywheel of investment and reinvestment that other markets work to mimic. Now, the question is perhaps better phrased as not “where is the new center of tech,” but has the technology industry become so broad-based that it has no real gravitic nexus?

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To answer that question, we have to understand how Silicon Valley compares to the larger United States venture capital and startup market; if Silicon Valley is truly losing its dominance domestically, it certainly cannot claim an international title. But if Silicon Valley is still the top dog in the U.S., itself the leading recipient of venture capital dollars, then perhaps we leave the Valley in the top slot for a while yet.

The question isn’t idle. Well-known investor and former SPAC booster Chamath Palihapitiya stirred the pot recently with the following:

In time, I do anticipate that a more global tech industry will dilute Silicon Valley’s former hegemony as the spawning point for what’s next, and it will become more figurehead than anything else. But has that happened?

We decided to find out: What’s the current ratio of dollars invested in the Valley compared to the rest of the nation, and how rapidly is that figure changing?

We’ve pulled data, parsed external definitions, and come up with an answer of sorts. Let’s have some fun!

Is Silicon Valley really losing its crown? by Alex Wilhelm originally published on TechCrunch