Silicon Valley: grey matter rules the world

These students are no doubt dreaming of a future as glorious as that of their elders, the founders of Google, Yahoo or Cisco who wiped the benches of Stanford before them...

At rush hour, on the State Route 85 towards San Jose or on the Freeway 101 between San Francisco and Palo AltoTraffic is slow. Bumper to bumper, bumper to bumper... Which leaves you plenty of time to decipher the slightly esoteric advertising hoardings overhanging the motorway, which you won't find anywhere else. "Y u no use hipchat?", "Find the hottest tech talent", "Creativity has no rules"... Allusions to the hottest start-up of the moment or the latest trendy mobile app.

Since Silicon Valley has been generating a steady stream of a thousand and one new jobs - never paying less than 125,000 dollars a year, even for a first job straight out of university - property prices have continued to rise. There's not a house for less than three or four million dollars between Palo Alto, Redwood City and Mountain View. As a result, even at 125,000 dollars a year, you live elsewhere, on the other side of the bay, where rents are still more or less affordable, or to the south, past Santa Clara. So there's really nothing exceptional about spending three, four or five hours a day in your car. That's the price of success: the Bay Areawith its 400,000 high-tech employeesis currently the region with the highest concentration of millionaires and billionaires in the United States.

Today, California accounts for almost 15 % of US GDP and the Bay Area can be compared to a major global economy. The cost of living here is around 50 % higher than in the rest of the US. Unemployment is virtually non-existent, with employment growing by a further 4.6 % in 2014. The American dream of the 21st century? It certainly is. But at a high price: in the space of just a few years, San Francisco and Silicon Valley have become the most expensive regions in the United States in terms of property prices, overtaking New York hands down.

However, up until the 1950s, nothing could have led us to imagine that what was not yet known as Silicon Valley, a name that came into its own with the rise of computer technology made possible by the use of semi-conductors such as silicon, would become the object of so much covetousness. The founding in 1885 by Senator Leland Stanford of the Stanford University in Palo Alto laid the foundations for this success. More than a century later, the institution is still ranked among the top universities in the world, extending its influence on global knowledge. Its 300-hectare campus is so vast that some parts of it are still unused by the 17,000 students in 2014.

In the beginning was HP

"Many Silicon Valley companies grew out of research carried out by Stanford professors or students, explains Brad Haywarduniversity spokesperson. A study carried out in 2012 revealed that, since the 1930s, almost 39,900 companies worldwide had been set up by professors and former students of the university, in order to 5.4 million jobs generated."Because, even if Stanford remains first and foremost a major research centre, where the humanities and the arts are just as important as science and technology, the fact remains that the university attracts all the high-tech talent. Let's not forget that Hewlett and Packard who set up the first software company in a garage in 1939 were... Stanford graduates. Pioneers who paved the way for other IT companies such as IBM and its first hard disks in the 50s, then Intel, Xerox, Atari and Apple in the 1970s, followed by Oracle and all the others.

Among its most recent and brilliant alumni, the university also counts the founders of Google, Yahoo, Cisco, YouTube, Linkedin, Instagram. Among other things... Stéphane AlisseThe Director of Business France San Francisco, points out that this ecosystem was by no means a planned model.Silicon Valley has grown organically over several decades. In fact, major universities such as Stanfordbut also Berkeley or UCSF (Editor's note: University of California, San Francisco) are still expanding. This attracts venture capitalists who hope to earn dozens of times their investment by taking the companies they invest in public.". Mergers and acquisitions are commonplace in Silicon Valley, where major groups buy technologies rather than develop them themselves. "Google buys out at least one company every month and has assets worth $45 billion since it was founded in 1998", continues the director.

Google... At the entrance to the Mountain View headquartersA huge green plastic android greets the 18,000 employees on a campus that illustrates the concept of the driverless Google Car. a new "art of living together described by Michel Lallement in his book The Age of Making. A real utopian city where everyone is young and goes around in Google BikesThese multicoloured bicycles can be picked up and dropped off anywhere, without even being tied down. Who would think of stealing them?

But it's not just Google in Silicon Valley. There's also Apple, in Cupertinowhich is planning a new futuristic headquarters in the shape of a flying saucer... There are Facebook which has also just opened new offices in Menlo Park where, since last October, the company has been organising Farmers Markets open to all...

As a result of this flurry of activity, the word "tech" is now multifunctional, encompassing information technology as well as clean tech and bio tech. "It's important to remember this, because there are different ways of defining Silicon Valley"says Stéphane Alisse. Geographically, the boundaries are almost blurred. Activities extend beyond the valley stricto sensu, towards the East Bay and Berkeley and as far as Sacramento where there is another major university, that of UC Davis, specialising in biomass and biofuels. In the north-east, the wine region, where many technologies linked to the agricultural sector are created, is also part of this flourishing area. All the way to San Francisco, now an integral part of Silicon Valley.

Back to town

"Recently, a kind of biotech cluster was set up in the former docks in the district of Soma (Editor's note: South of Market Street), where UCSF has set up a research centre."continues Stéphane Alisse. The establishment of the digital industry at the heart of the Golden Gate City is explained by the fact that today it is no longer necessary to host servers. It's all in the cloud!

However, the real attraction of San Francisco for high-tech companies lies elsewhere: new talent, often young people, are looking for an urban rather than a suburban lifestyle. And the major groups, still short of qualified engineers, have a vested interest in attracting and retaining their employees. As a result, free bus services have been introduced between the valley and the city, and it is not uncommon to see a Paypal, YouTube or Google bus its steep streets.

it is becoming increasingly difficult to differentiate the San Franciscan economy from that of Silicon Valley

When you're not opening offices right in the heart of San Francisco...".The job market is more favourable to employees than employers, because it is difficult to find enough engineers, explains Laurence FabreDeputy Director of the French Chamber of Commerce in San Francisco. With companies moving into the city, it is becoming increasingly difficult to differentiate the San Franciscan economy from that of Silicon Valley."So while the oldest companies, such as eBay and PayPal, are based at the bottom of the valley, the most recent ones - eBay and PayPal - are at the top. Twitter, Airbnb, Uber - have opted for former urban warehouses.

In coworking mode

For the past decade, the city of San Francisco has spared no effort to attract start-ups and major companies to its long-abandoned city centre. As a result, the number of tech companies in the city has risen steadily since 2000. As for the others, they often allow their employees to commute to Silicon Valley only a few times a week. Hence the flowering of numerous coworking spacesof From WeWork to Shared, from NextSpace to Makeshift SocietyAnd if you keep your ear to the ground, it's not uncommon to hear major deals being struck.

"It would be difficult to count the number of start-ups in San Francisco, as new ones are being created every day. The flow of newcomers to the city is quite remarkable."says Laurence Fabre, pointing out that Some 60,000 French people live in the Bay AreaMore than 10,000 work in the tech sector. "It's crucial to come here if you're a tech company, but you need to be aware that the market is highly competitive. "remarks Jerem Febvrefounder of Sublim Skinza company specialising in digital advertising, selected by Business France and bpifrance to receive assistance in setting up in the United States. "We've just set up in San Francisco, because it's impossible to infiltrate the American market without going there. But we had to raise five million dollars to get started in the United States."says the young entrepreneur. In other words, you need to have a keen sense of business... and a love of risk.