If you live in the silicon valley like me, you should read this mercury news article.
Tucked into the annual Mercury News data-palooza known as the Silicon Valley 150, there’s one nugget of information that I think tells us more than all the other lists and numbers about the profound changes in store for this region:
The number of public companies in Silicon Valley fell for the eighth consecutive year in 2008. Forget the inflated dot-com peak. That’s below the 315 the valley had in 1994, when the Mercury News started keeping track.
This is no longer a simple correction following a period of excess. This is now an unmistakable trend that represents the end of an era defined by a grand partnership between Silicon Valley and Wall Street. That alliance fueled a model for funding innovation that became the envy of the world. And now we have to come up with a new one.
“This is not just a change in the weather,” said Tim Walker, an editor at Hoover’s, an Austin, Texas-based business research firm that’s been tracking this trend, “this is a change in the landscape.”
The impact of this evolution will be felt by those who work in the tech sector. This means big consolidation in the number of venture capital firms followed by changes in how entrepreneurs raise money, how they get rewarded for innovation.
But it will also ripple out to those of us who don’t work in tech but have felt in recent years the impact of higher costs of living and housing prices driven by the IPO and stock options riches that are unevenly distributed by the innovation economy.