Friday, February 20, 2015

Silicon Valley Is Already Dead

Waterloo's tech boom went bust, revealing the rise of the intangible economy.

Theme: Economic restructuring

Subject Article: "The Battle of Waterloo: The life, death, and rebirth of BlackBerry’s hometown."

Other Links: 1. "Software Stepping In Where Steel Left Off."
2. "Rust Belt of Silicon Valley: San Jose Is Dying."
3. "The Rise of the Intangible Economy: U.S. GDP Counts R&D, Artistic Creation."
4. "An introduction to the economy of the knowledge society."

Postscript: From "An Introduction to the Economy of the Knowledge Society":

A related characteristic of economic growth, that became increasingly evident from the early twentieth century onwards, is the growing relative importance of intangible capital in total productive wealth, and the rising relative share of GDP attributable to intangible capital (Abramovitz and David, 1996; Abramovitz and David, 2000). Intangible capital largely falls into two main categories: on the one hand, investment geared to the production and dissemination of knowledge (i.e. in training, education, R&D, information and coordination); on the other, investment geared to sustaining the physical state of human capital (health expenditure). In the United States, the current value of the stock of intangible capital(devoted to knowledge creation and human capital) began to outweigh that of tangible capital (physical infrastructure and equipment, inventories, natural resources) at the end of the 1960s.

The two main categories of intangible capital aptly describe the two pillars of the legacy economy, eds and meds. In Pittsburgh, the production and dissemination of knowledge underwrites the current economic boom. In Cleveland, the sustaining the physical state of human capital is propelling Northeast Ohio down the same path Pittsburgh has tread. In Boston, the global center of the legacy economy, both categories of intangible capital thrive in world class institutions.

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