Silicon Valley is still a great place to start a company in any of the information technology, biotechnology areas. Everybody is available locally. In Silicon Valley the biggest disadvantage is that it’s expensive, especially the houses. It’s hard to move young people in. Even with the recessions we’ve had, the price of housing has continued to increase. I don’t understand how it can continue to go up. The area’s uniqueness is not as great as it was in the beginning. Now there’s a lot of other places competing technologically. As far as my view of U.S. competitiveness, I think it’s a real challenge. Our educational system is not what it ought to be, particularly when you are talking about K through 12. The universities are still great. We (face) very formidable competition in the world–I think the impact of China in particular is just beginning to be felt; 1.1 or 1.2 billion people are going to have a dramatic impact. In the next 20 years, we’re going to see how that plays out, I’m expecting the U.S. will still be a successful player, but I don’t think it’ll enjoy the position it had in, say, the past 20 years. We’ll have to work hard at it. China is training 10 times as many engineers. Increasingly, they are a big consumer of the world’s resources. Their technology is catching up very rapidly. It’s a very entrepreneurial society.
That’s Gordon Moore, famous for Moore’s Law and for being one of Silicon Valley’s founding fathers. He’s the latest tech big shot to worry publicly about our faltering school system. (Here’s Bill Gates’ take.) Poor education is a key component of outforcing, as is falling housing affordability. In fact, in a recent report on offshoring, the consulting firm A.T. Kearney had this to say about the Bay Area:
The region has the highest cost of living in the nation, well above the other cities and regions it competes with and nearly 50% above the national average. High housing costs driven by inadequate supply, are the main culprit, raising the amount that companies must pay to attract and retain their workforce.
The report finds that outforcing is likely a much bigger deal than offshore outsourcing.