Innovation Tribune eng

Can you clone the Silicon Valley elsewhere?

Last Thursday, there was a seminar organized by the Ecole de Paris du Management, hosted by Daniel Rouach, who is a professor at the ESCP-EAP business school and at the Technion, Israël. Rouach is a specialist of industrial clusters and the co-author of Creating Regional Wealth in the Innovation Economy: Models, Perspectives and Best Practices, a book based on the extensive worldwide reseach he has done on the topic.

According to Rouach, there is no unique model to reproduce, but a series of success factors that ensure the success and the longevity of the cluster. Those factors are: a university, a leading company, availability of venture capital, effective governmental action, entrepreneurial spirit, as well as good competitive intelligence and networking among people, the quality of infrastructure, in particular for the transport, and the quality of the environment. If one looks at Bangalore, one of the most vibrant clusters nowadays, one can notice that the city has weaknesses one three of these factors, namely: the quality of the infrastructure and of the environment, and poor governmental action (see the excellent article about Bangalore in The Economist from April 23rd called The Bangalore Paradox). These weaknesses undermine the long term prospects of Bangalore, not so much as an IT center, but as an entrepreneurial cluster. The importance of networking is very high, and using the diaspora is something Indian and Israelis have done very well.

The end of journalism as we know it

In a speech to the American Society of Newspaper Editors, Rupert Murdoch warned recently that newpapers as we know them would soon be a thing of the past. It's not the first time such a prediction is made (see our post on Dec. 5th at http://portail-innovation.typepad.com/eng/2004/12/under_internet_.html), but when you know Murdoch is one of the largest "traditional" media moguls, such a warning is stunning. It's a bit like the Pope declaring that the catholic Church has run its course.

So dinosaurs know they are in danger, at least one of them. Murdoch's reason for such a prediction is no surprise for many of us: the explosion of blogs, social changes that make it less likely for people to accept the moral reference that journalists could claim to be, the emergence of new players (Google of course), as well as collaborative projects inspired by the open source software development movement, the disruption is in full force.
The reaction of traditional media, who dismiss these new "providers" as a source for superficial, if not plain wrong information, is not surprising. How can you trust information that is not verified by professionnals? That can only be for fun; serious people will stay with us! This is certainly plain wrong. First because nobody will argue against the fact that traditional media often carries information that is biased, wrong, opinionated, when it's not plainly propaganda. Second, because Linux has proved that a decentralized approach could produce a very high quality result. If you can build something as complex as an operating system like this, you can definitely build a "newspaper" as well. Amazon showed long ago how efficient such a system can be in promoting or discarding non reliable contribution from the network. One can even argue that such a distributed approach, if well managed, is far more efficient and effective than the work of an editor in his office. Traditional media existed only because of the scarcity of the "raw material" and of the cost of processing that only a large and well financed organization could afford. That's now over when everybody can contribute.
The disruption is in progress, and the analysis of Prof. Clayton Christensen applies here once again: the world of information is being completely transformed following this disruption; incumbents are complacent and refuse to admit it, and as a result they are now gradually being displaced by aggressive new entrants.
It is less than certain that Murdoch's message will register with newspaper editors. It's anathema for them: they are the fourth Estate, after all. Well, they used to be: to the rest of the world, it's becoming obvious now.

If you want a taste of things to come, take a few minutes to visit the following site: EPIC