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    View from the Inside

    Influential bloggers calls for downturn in Silicon Valley

    Web 2.0, as the recent surge in Internet ventures has been termed, is re-igniting the innovation engines in Silicon Valley. But not everyone is happy with that.

    Utilizing a new, flexible but powerful compilation of software programs, termed AJAX, new companies began popping up a few years ago. Michael Arrington, created a blog in 2005 called TechCrunch.com, to cover the then burgeoning trend. With insider insights and interesting companies to write about, TechCrunch became a massive hit and can claim close to 500,000 visitors a day.

    On May 22, however, Arrington wrote that he missed the old days, circa 2004, where burgers, beer and backyard parties offered the setting for entrepreneurs to network. No longer is that the case. Easy capital has changed everything, he intones. Put another way, Web 2.0 has jumped the shark. [Money quote: "Times are good, money is flowing, and Silicon Valley sucks.” ]

    He suggests Silicon Valley needs a good downturn to set things right again. Strangely, another blog superstar Robert Scoble, followed up with his own similarly-themed post "Why I'm in a malaise ..." [Money quote: "I too look wistfully back at the days when we had almost the entire Social Software industry in one little coffee shop back in 2002 — none of whom were talking about making billions of dollars. "] It's a strange call to arms, to be sure, but the insights they provide offer an insider's look into a boom as ownership is transferred from the innovators to the exploiters. GEO

    Capitals of Clean

    Regions vie for clean tech crown

    Several months after The New York Times ran its piece , on May 24th, the Wall Street Journal offered its own take on Silicon Valley's drive to become the clean technology capital.

    Although not news anymore, WSJ writers Pui-Wing Tam and Jim Carlton authored a more balanced piece on the subject.

    NYT slanted its piece as if Silicon Valley's dominance is a foregone conclusion, but WSJ clearly spelled out the Valley has plenty of competition: particularly from Austin, Texas. Even citing a study by an independent research firm, SustainLane, in San Francisco ranking Silicon Valley, gasp, #2 behind Austin. (Click here for Google Map.)

    The story was also more detailed, honing in on San Jose (the 1M person capital of Silicon Valley) and its efforts to lure a start-up solar power company called Nanosolar, Inc. Salient points: San Jose city officials scouted sites for a 647,000 s.f. building to save Nanosolar on real estate broker fees, offered expedited permits, and provided a $1.5 million grant to be used to retrain local workers. All of that to attract a facility that will create 200 jobs, which will hopefully grow.

    Still, the article points out that San Jose is an expensive place to startup a business: average salaries are twice the national average ($66,200 v. $37,870) and other items, such as electricity costs, are high. However, there's plenty of money thanks to VC-extraordinaire John Doerr of KleinerPerkins, who's pushing clean tech. (Check out the excellent new Portfolio magazine for a profile of Doerr's efforts. Money quote: “When you get into energy, you’re going up against Exxon and Chevron and cattlemen and corn.”) And local techies like Google co-founders Sergey Brin and Larry Page are putting their own money into outfits, such as Nanosolar (which has raised $100M to date).

    So far, reports the article, San Jose has 22 firms involved in researching and producing clean tech, an 83% jump from last year. One of which, SunPower Corp., has 300 employees and plans to double that workforce by the end of 2007. Austin, however, claims 50 such companies.

    Other top spots for clean tech, according to SustainLane, include: Berkely, CA; Pasadena, CA; Boston, MA; and runners-up San Francisco, New York, Seattle, San Diego, and Houston. GEO


    A Place of Solace?

    Kurdistan's most valuable natural resource is peace

    The WSJ wrote on May 16 how the Kurdish-governed section of Iraq, the northern part, hopes to emulate the success of Dubai, and Adu Dhabi. Although observers familiar with the region readily point out, "It's no Dubai,"the semi-autonomous Kurdish government is pursuing an aggressive strategy to develop housing for the impending wave of foreign workers attracted by the region's oil reserves.

    Developers are offering homes in housing complexes with names like English Village. Already English Village has sold out its stock of 410 houses, costing from $130k to $160k, and move in is still a year away. Another more tony development called "Dream City" in Erbil, and has 1,200 units, costing as much as three-quarters of a million dollars.

    To lure companies, Kurdistan is offering a 10-year tax holiday, 100% land ownership, and international arbitration for settling contract disputes. But it's greatest asset is the relative peace of several of the region's large cities. Although volatile places like Mosul are just 50 miles away, cities like Erbil have seen dramatically less violence. But that's not to say none.

    All these dynamics are adding up to drive up home prices, and home rental prices, 100% to 200% over the last few years. The problem is wages for local Kurds is not increasing at the same rate and they're being priced out of the market. (Sort of sounds like what happened in Silicon Valley during the tech boom when local schools couldn't pay teachers enough to live in the areas where they taught.) GEO

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