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Margaret O’Mara’s book “The Code” brings hidden Silicon Valley history to light
Jul 11, 2019

Margaret O’Mara’s book “The Code” brings hidden Silicon Valley history to light

Immigration reform in 1965 paved the way for more immigrants to work in nascent Silicon Valley firms.

In part two of our Marketplace Tech conversation with “The Code” author Margaret O’Mara, we got more historical insights on how Silicon Valley came to be the business and tech phenomenon it is today. Think of it as a biography of the place. (And if you missed part one, here it is.)

A big part of Silicon Valley’s origin story is people: engineers, tech geeks, politicians, venture capitalists. And a big number of those people were immigrants. O’Mara said a global talent pool was critical to Silicon Valley’s success. Marketplace Tech guest host Jed Kim had O’Mara share a key moment from the book, when former President Lyndon B. Johnson signed immigration reform into law. The following is an edited transcript of their conversation.

Margaret O’Mara: I knew that the 1965 immigration reform act was going to be sort of a “character” in the book because I think that’s one of the single most important economic policy moves of the last 60 years. It creates this new basis on which waves of immigration — including people who come from Asia, East Asia, South Asia, refugees from the former Soviet Union, from all around the world — end up in Silicon Valley and other high-tech regions. They and their children become not only the technological backbone of the Valley, but they, in disproportionate numbers, found companies.

Jed Kim: You make the point that a lot of nations have tried to make their own Silicon Valley success story, and it’s difficult. But despite that, there is a lot more overseas competition. I’m talking about China. They have a lot of successes right now and may be leading in a lot of areas.

O’Mara: The Chinese have looked carefully at the Silicon Valley example, and they have replicated maybe some of the same moves, including really broad-based government investment in advanced technologies, whether it be autonomous vehicles or [artificial intelligence] or higher education. These are things that the U.S. as a state is not doing in the way it used to.

Kim: You make the point at the end of your book that current and maybe future generations of tech workers may be walking away from the goals that drew a lot of people to the Bay Area. Can Silicon Valley last?

I’m made optimistic by the new generation of technologists who are saying, ‘OK, there’s more than just making money.’

Margaret O’Mara

O’Mara: That’s a question that’s been asked about Silicon Valley again and again. There have been obituaries written for it in 1969, ’79, ’89, ’99. It’s always on the nine. So here we are in 2019 — it’s kind of appropriate. We’re wondering, “Is it over?” I’m made optimistic by the new generation of technologists who are saying, “OK, there’s more than just making money.” Think about how technology can truly make lives around the world better, how it can be exported to other places in a way that doesn’t disrupt and destroy institutions but strengthens them.

And they’re also wanting a different quality of life. The Bay Area and my hometown of Seattle have become very expensive places. They’re places that already had affordable housing shortages and transportation problems, and the current tech boom has just exacerbated all of them by several orders of magnitude. We are at an inflection point where the places that are tech hubs are really going to need to do something to figure out how to accommodate growth in a way that is more inclusive and that is going to be more resilient over the long term.

Kim: How do you see the threat of regulation when it comes to Silicon Valley? Is this something that will change the industry? Will this story look different in 10 years?

O’Mara: Regulation doesn’t have to be a threat. And I think that’s one thing that the history can really help us better understand. There are many, many examples of regulation, antitrust enforcement that have proved very beneficial and generative to tech.

AT&T has basically been in an antitrust action most of its existence. In the mid-1950s, AT&T had been trying to inch into the nascent computer industry and was swatted away by the Department of Justice. And in 1956, there was a consent decree that AT&T was put under that required it to license the technologies that came out of its industrial research lab, the legendary Bell Laboratories. It had to license transistor technology for free. Gordon Moore, a founder of Intel, later said, “We would have not had a silicon semiconductor industry in the Valley had it not been for this consent decree.” It allowed these new companies in the Valley and elsewhere to start using transistor technology and building their own products. It was transformative. So I think there is a middle way — how you can both have a vibrant tech industry and allow people to be entrepreneurial, to make money, but also to allow for competition and innovation.

Related links: more insight from Jed Kim

A ready and willing immigrant task force helped make Silicon Valley. Now more of those workers are migrating farther north instead. Business Standard looked at the increase of Indian tech workers getting permanent residency in Canada. Last year, nearly 40,000 gained residencies, which is an increase of 51% over the previous year.

In the United States, there’s been a lot of uncertainty over H-1B work visas for workers with specific tech skills. Meanwhile, the Business Standard reports Canada is reducing how long it takes to process Global Talent visa applications, from six months to just 10 business days.

The United States and China have a firm grip on tech dominance. The Korea Times reported on one person’s hopes to challenge that. A former French culture minister turned startup incubator founder wants to link Korean startups with European investors. The aim is to make sure the world of tomorrow doesn’t reflect only American or Chinese values.

Business Insider (pay wall) looked at Victor Santos, a startup CEO whose app Airfox helps low-income people in Brazil access credit. While he’s attracted angel investment, he said raising capital has been tough. One factor: He’s an undocumented recipient of the Deferred Action for Childhood Arrivals program. And he said potential investors weren’t sure how that would impact the company’s future. The venture capital world was not interested in lower-income customers without bank accounts. He said more diversity in the investing world is needed for ideas like his to take off.

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