Silicon Valley is becoming the next Detroit — and that’s a good thing
by Mike Cassidy
Mercury News Columnist
Back in the bleak days of the dot-com bust, a number of naysayers would sum up Silicon Valley’s sorry state by wondering whether the region was on its way to becoming the next Detroit.
Now a decade later, you could argue it’s come to pass — that the valley has more in common with Detroit than it ever has. But the funny thing? This is good news.
“Silicon Valley is the next Detroit, ” says Paul Saffo, a futurist who’s long studied the valley, “but not in the way that everybody thought.”
It’s true. You can hardly walk down the street without bumping into the West Coast offices of a major car company. Volkswagen, GM, BMW, Renault-Nissan and most recently Ford. Then, of course, there is the Tesla factory in Fremont and the work that Stanford and Google are doing on cars that will drive themselves.
True, we can’t quite swipe the “MotorCity” moniker from our friends in Michigan. Telsa aside, you’re not going to see enormous plants in the valley rolling out long lines of vehicles headed for the showroom. Instead, think of the valley operations as the electronic outposts of 21st century automakers.
These outposts are increasingly important to car companies, who are scrambling for new ways to differentiate their offerings. In an era when the quality gap is closing fast, one way to make Car A look better than Car B is to add bells and whistles — and iPod ports, and Bluetooth connectivity and Internet access, and GPS and blind-spot detection and on and on.
Saffo likes to joke that we no longer drive cars. We drive computers. And if you’re going to build rolling computers? “You’ve got to be close to the people doing the development, ” he says, “and this is where the silicon is designed.”
Jim Buczkowski agrees with Saffo’s point. Buczkowski is a career Ford man, the guy in charge of seeing the future, Ford’s uber geek, as he’s known. He was in town recently from Michigan (no, he didn’t drive) to meet with Ford partners Microsoft and Sony and to check in on the modest research office that the company is launching in Palo Alto.
“Silicon Valley has the reputation, but also the resources, that support rapid innovation, ” he told me. “Having some folks on the ground that can, on a day-to-day basis, tap into networks and tap into what’s being talked about at coffeehouses, we feel is really important.”
It is important to be where the ideas are, not to mention where the talent is. Buczkowski said he could see the day when Ford would recruit Stanford students who would walk or ride bikes (yes, walk and bike!) to the Ford office to work on prototypes of the company’s next cool thing.
Just how much are cars becoming like computers? Buczkowski explained that Ford’s strategy is not to install gizmos like music players, tablet computers, phones and the like in cars. Rather, Ford is working on ways for consumers to better integrate gizmos they already have into their cars.
Think of it this way: If Ford installs the latest MP3 player in a car and you keep your car for 10 years, you’re very quickly stuck with an obsolete MP3 player. But if Ford builds in the ports and provides the right communication technology, you can use your own iPhone, for instance, which you’re free to replace with a newer model. And when automotive software inevitably leaps forward? You upgrade your aging vehicle’s operating system. (“Hey, check the oil and give me a boost to version 2.0.”)
The company just mailed out an upgrade aimed at fixing bugs that have plagued its entertainment and communications system called MyFord Touch.
My talk with Buczkowski served as a reminder that what happens in Silicon Valley still matters; and that being here to see it happen is still important for all sorts of enterprises. In fact, the local presence of Ford and the other automakers is an encouraging sign that the valley is likely to be a key player across a broad swath of industries well into the future. Think about it: smartphones, smart cars, smart homes, smart classrooms and smart factories. As the world becomes ever-more digitally dependent, the valley’s brains and companies will have an opportunity to supply the smarts that run the world.
“There is a chance that the next big wave in technology, which really is smarter devices, might actually break here, ” says San Jose technology analyst Rob Enderle.
And though it’s not a lock that the valley is going to dominate the smarter world, Enderle says, it’s at least good news that car companies and others recognize the role the valley might play in their future success. It fact, he says, it’s something of an insurance policy against Silicon Valley becoming the next Detroit — in a bad sort of way.
Contact Mike Cassidy at email@example.com or 408-920-5536. Follow him at Twitter.com/mikecassidy.