Another back in the good old days article.
Paying people $100,000 (and even more!) a year just up write “apps” or games —- may be justifiable and sometimes quite profitable for a small number of extra- successful such “products” — but it is a patently unsustainable business model when it is attempted to apply to hundreds or thousands of venture firms.
Any fool can see that the “winnowing out” stage Is now underway.
And the large successful corporations are realizing that they don’t need thousands and thousands of highly paid personnel to do the work of a couple hundred good programmers.
The issues have been accumulating for a number of years. Highly speculative ventures, bloated salaries and bloated staffing.
Markets always get around to correcting … whether we enjoy it or not
hp,Intel,Fab 1,2,3, Ultratech
Don’t know why it’s still called Silicon Valley.
The heart of the change -—
“The start of this decline has coincided with a shift from the physical to the virtual. The Valley’s roots were in the old engineer-driven economy, one connected to the rest of the country, and to working-class America — somebody, it’s easy to forget, has to make the hardware. Today tech is dominated by a cognitive elite of Ivy Leaguers, management consultants and MBAs. “We used to build the future,” Leslie Parks, who formerly directed redevelopment efforts in San Jose, once told me. “Then we designed it, now we just think about it.”
But the Valley has slowly left the industrial battlefield — it has lost over 160,000 manufacturing positions over the past two decades. It bought into the idea that the unique genius of its financial and corporate culture would be enough for it to thrive and profit as production headed first to Japan, then China and, more recently, to other parts of North America.
This is a familiar story. Consider, for example, how British industry lost its edge: the Industrial Revolution created a new class of tycoons; then the tycoons’ sons sought a return to the aristocratic past, eschewing dirty factories for elegant postings in the City or a relaxed life in their country estates. More recently, Detroit’s world-beating automotive industry squandered its technological and manufacturing advantages in a rush, pushed by Wall Street and its own financial managers, to earn easy profits from inferior products.”
In the beginning, it was engineers and physical scientists. Now it is programmers and social scientists.
They are a bunch of what are called ‘rent seekers’.
Find a large economic sector and figure out how to get a cut by computer.