BusinessWeek - Whatever Happened to Silicon Valley Innovation?
http://www.bloomberg.com/bw/stories/2008-12-30/whatever-happened-to-silicon-valley-innovation
Silicon valley used to be (and still is) the leader of innovation in the US and still ranks very competitively in the world. Japan, China, India, and Europe however are all growing at rates much higher than they valley is. The model for tech and software startups has become corrupted, with a focus on short term success, taking the company public (or being purchased by an established firm) and getting a big payday, and then finally an 'exit strategy' for the leaders and original investors (usually venture capital firms). Venture capital firms have been slow to throw much money into startups, or at least much money beyond $100mil. Another sore spot: new innovative software and growth like Digg, Facebook, etc. aren't groundbreaking-- they are modifying and 'riding the wave' of previous innovations. IBM, Microsoft, Google and the other big companies are all still working on innovative designs and technologies, and recently there have been a number of personally funded companies started with the money of well-paid former innovators. Congress passed a 2007 'America Competes Act' which was never funded: the article concludes by recommending it.
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