Yes there is a disconnect in the analogy. The point I was trying to drive home to local municipalities is that luring in an established company isn’t the way to build an economy. Helping start new companies is way to really establish your identity as a city.

I think what worked for Silicon Valley in the 70′s and 80′s probably wont work in Phoenix, but I think investing in your current residents is always a recipe for win. Look at something as simple as “Fast Trac” put on by stealthmode, where a minimal investment (under $1000) might produce a company that employees 25 people and launches 3 more companies.

Don’t get me wrong infrastructure is not bad, it is necessary. I just think especially here in Phoenix we have such an inferiority complex that we think we have to do what all the other cities are doing, instead of finding our own identity and making our own culture and economies.

I plan another post on ARPA, PARC and such that will help explain somethings as well. The government actually did fund at one time most of the masterminds that created the first wave at Silicon Valley. They worked as researchers building their theories and then left to start companies based on this research. What the government did correct was allow them to leave to start these companies. This first wave of companies funded the next wave and thus began the economy of technology in the area.

See: The Silicon Valley Edge

See: Garage or Government Lab

But I have trouble with the analogy. Are you addressing other local businesses in Phoenix or the state government? Your analogy to Pay Pal and Silicon Valley don’t precisely piece together in my mind yet. Did the California government invest in companies like Pay Pal? What was the governments role in creating a tech mecha in the bay area other from tech workers generally earning a high income and the bay area being a desirable area to live in for those who could afford to?

In some of my other projects, I am beginning to encounter the old thinking in government (and business) that just does not fit anymore. It’s not a change, it’s a sea change. It’s big and good and will leave towns, cities and companies that don’t adjust wondering why they are still in the doldrums.

Thanks for the post Derek.

Phoenix is just way slow to move and so old school in their thinking… (exp: (aside from this post) look at the highways and how they add another 2 lanes every 2 years, and then build a SUPER expensive tiny train that does no good to 95% of the community)