skill plus capital. whether or not you’re constructing an organization, a city or a national economic system, these are the uncooked supplies that make it imaginable to do things that others can’t.
Silicon Valley is the arena’s most magical mixing chamber for these two easy components, home to probably the most thrilling, ingenious and valuable corporations in the world. each city in the U.S. — and all over the world — desires to be the “Silicon Valley for X,” as a result of by some means that simple recipe of talent plus capital produces such radically completely different results there than any place else.
money flows to possibility; if that you could flip singles into twenties, anyone will write you a test irrespective of the place you’re. however people have a stickier relationship to geography: they’ve pals and families, spouses with careers, mortgages and kids at school. ability flows to places the place the opportunities are greatest and the risk of getting caught is lowest over the long term, so if issues don’t work out in one job, you could move on to the next giant factor without altering places.
How did Silicon Valley become the sector’s top innovation financial system? the reasons are many, however probably the most least celebrated and most fundamental drivers of that success is an imprecise-however-highly effective legal provision handed into legislation back in 1872. In that year, the California Civil Code was amended to incorporate the next language:
“except for as provided in this chapter, every contract wherein any person is restrained from engaging in a lawful career, exchange, or industry of any variety is to that extent void.”
In different phrases, human capital — talent — working within the State of California can’t be contractually certain to any company for any reason (excepting a very slender and smartly-defined set of part circumstances). this is very different from many different states in the U.S., including a few that aspire to compete with Silicon Valley for leadership in the innovation economic system.
Human capital in California does regardless of the hell it needs.
by using writing that simple human freedom into legislation, California ensured the free float of talent to the very best and most promising opportunities, whether or not that’s what their earlier organisation had in mind. From the “traitorous eight” that created Fairchild Semiconductor to the current day, human capital in California does regardless of the hell it desires, and that free drift of skill makes the Bay space what it’s.
Washington and Massachusetts aspire to greatness in innovation. each have solid observe information of success in nurturing world-class technology corporations. each are house to nice cities, with prominent analysis universities that entice talent from around the globe. but each are also home to “champion” corporations which have used lobbying energy to dam the passage of rules just like California’s that may outlaw using non-compete agreements.
robust Federal statutes exist to protect mental property (via patents) and block the sharing of change secrets and techniques (thru enforceable non-disclosure agreements). Non-compete agreements don’t exist to protect trade secrets — as their defenders claim — however relatively to prevent workers from pursuing goals that may conflict with these of their company.
Legislators in each Washington and Massachusetts have known the harm that non-compete agreements do to their innovation economies and introduced legislation to compare California’s skill-centric policy. but in each circumstances, incumbent corporations with powerful lobbyists — specifically, EMC in Massachusetts and Microsoft in Washington — have used their economic power to block any change to state non-compete laws.
So in Washington, a Microsoft employee who spots a extra attention-grabbing career possibility at Amazon is prone to be sued only for taking a greater job. And an Amazon worker who wants to go away to create a startup is equally prone to be sued for “competing” with their ($ 250 billion market cap) supplier. the answer in both instances isn’t to stay put, but relatively to — you guessed it — transfer to California the place Washington non-compete claims can’t be enforced.
Seattle and Boston are both incredible locations to construct corporations, and a few founders will at all times opt to pursue their goals in those cities as an alternative of pulling up stakes for the Bay area. but so long as legislators in Washington and Massachusetts maintain paying attention to lobbyists as an alternative of founders and entrepreneurs, California will handle its unfair benefit within the international battle for talent.
Featured image: Ollyy/Shutterstock
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