The Silicon Valley’s four crises

Here you can read this article in German.

The famous mantras “Move fast and break things” and “Ask for forgiveness, not for permission” aren’t sexy anymore. Nowadays they stand as symbols for the Silicon Valley’s multiple crises.

The Silicon Valley is going through its biggest crisis since the Dotcom crash. In fact, it’s engulfed in four different crises at once.

Loss of domestic political support

Some of the Silicon Valley’s biggest firms such as Facebook, Google and Twitter are being used for systematic political manipulation. There is no doubt about that anymore. Only the extend remains unclear. Investigations are ongoing. Meanwhile, tech firms are facing harsh criticism for being both too generous with censorship and restrictions of speech, or too negligent with doing so. Additionally, more people are asking themselves to which extend the tech industry contributes to the increasing wealth inequality in the region. There perhaps is no other place in an economically developed country in which so many millionaires walk or drive by so many homeless people every day, than San Francisco. The consequence of all this: Both the political right as well as the political left are becoming skeptical of the Valley’s biggest players. Without political support or at least leeway, disruption will be a lot harder.

Polarizing cultural transformation

Since its emergence, the Silicon Valley’s technology industry has been dominated by males and has shown a lack of ethnic diversity. Criticism of this structural homogeneity and calls for change have become pretty loud lately. The stereotypical-male mono culture is being confronted with a new reality, in which sexual harassment, unequal treatment and decisions based on homogeneous life experiences and world views are being called out instead of swept under the carpet. This is necessary and important. As these debates easily become heated, emotional and ideological, and as a rapid cultural transformation seldom happens without severe internal tension (Google Memo anyone), the Valley’s focus is now on itself. Instead of disrupting markets, the Silicon Valley is forced to disrupt itself.

Global regulation

The European Union has been trying to limit the tech firm’s tax avoidance practices for a long time. Now the pressure is increasing. Signs of election meddling, monopolist tendencies and systematic rule breaking involving companies such as Google, Facebook and Uber, offer additional motives for regulators in Europe and elsewhere to tighten the screws on the Californian giants (as well as on their competitors from up North the Pacific coast, such as Amazon and Microsoft). The famous Valley mantras “Move fast and break things” and “Ask for forgiveness, not for permission” have lost their positive-rebellious tone. They now rather represent the arrogance and ignorance of the Silicon Valley ideology.

Anti-technology backlash

Every euphoria is succeeded by a period of disillusionment and disappointment. The technology sector has just entered such a period. Critical reports about the negative impact of gadget’s and digital networks’ ubiquity in daily lives aren’t longer being produced by and celebrated among technophobes, but rather by former internet evangelists and early adopters who have been trying out any new device, app and service imaginable, but who are now starting to discover the costs of the digital revolution for their own well-being and for humanity at large. This process is probably a healthy and normal one. First the pendulum swings to one side, then to the opposite one. Eventually, it reaches an equilibrium position. But the fading enthusiasm for a never-ending flood of digital consumer innovation will, at least in the short term, hurt Silicon Valley, as the Valley juggernauts have perfected the creation of this very digital consumer innovation and turned it into a vast and possibly historically unique source of profit.

It’s unclear where this all ends, but it’s clear that the Silicon Valley’s culture and companies are about to change dramatically.

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