The Hot New Tech Cities

In many countries outside the United States, building at least one tech city is, economically speaking, a matter of national security. Failure to do so is a snub to the future itself--and the future is a guy you don't want to tick off. While a few heavy-handed attempts to create foreign versions of Silicon Valley by fiat have so far fallen short, some nations have plenty to boast about. England's hopes lie in Cambridge. Ireland has seen Dublin go wired. Finland's Helsinki is hot, at least as far as cutting-edge tech goes. Thousands of programmers churn out code in India's Bangalore. And some say that the Silicon Valley's most serious global competitor is the mini-sprawl around Tel Aviv. ""High-tech start-ups are the new Zionism,'' says Yossi Sela, head of a $150 million venture-capital fund in the suburb of Herzliya.

The self-proclaimed Medicis of the new Florence south of San Francisco might object to the characterization, but these localities are all bona fide tech cities--places poised to exploit the digital revolution by spawning new companies, creating wealth and ditching the prewired business practices of the 20th century in favor of the rocking-and-rolling, go-for-gold ethos that has taken root in northern California. According to a recent American Electronics Association (AEA) study, in fact, the upstart tech cities are already scooping up the bulk of the country's new computer jobs: since 1990, Texas has added six times more high-tech workers than California, which was also dwarfed by the likes of Washington and Utah. Silicon Valley may still be the Big Daddy, but it's far from the only game in town.

HOW DO YOU GO ABOUT building a tech city? It's not easy. ""Silicon Valley is a set of networks and social relationships--simply plopping a science park down isn't going to work, '' says AnnaLee Saxenian, a University of California, Berkeley, associate professor in city and regional planning. The main technique of aspirants is to reverse-engineer Silicon Valley. Sometimes the attempts to clone the California phenomenon are almost comically literal (a developmental plan on the future of Cambridge, England, actually superimposed a geographical outline of the Valley over a map of East Anglia). Still, you don't need an engineering degree to isolate the elements of a high-tech hotbed:

1. A major research institution. In 1934 Stanford professor Frederick Terman persuaded recent grads Bill Hewlett and Dave Packard to start a firm in the area, kick-starting the Valley. To this day, according to the university's James Gibbons, half of Silicon Valley's revenues come from Stanford-seeded companies. But Terman himself was imitating the practices of the Massachusetts Institute of Technology, which over the years has spawned 4,000 companies employing more than a million people, according to a 1997 BankBoston study. MIT spinoffs include Cambridge success stories like Lotus (now owned by IBM) and Firefly (purchased by Microsoft). If this MIT archipelago were a nation, it would be the world's 24th largest economy, between South Africa's and Thailand's.

An ocean away, Cambridge University, after 800 years of perching above the commercial fray, is now actively leading an effort to Valley-ize its surroundings. Graduates, and even faculty members, are encouraged to go into business, and two of its colleges have opened science parks to incubate start-ups.

But even the most ambitious university can't build a tech city alone. That's why a lot of town-and-gown communities wind up hosting only a few high-tech hopefuls, led by entrepreneurs whose choice of location is determined by postgrad inertia more than anything else. Trying to defy those odds is Champaign-Urbana. The University of Illinois, and particularly its supercomputing center, lures brilliant young minds. The town just oozes with technology: even local criminals get arraigned electronically via a T1 hookup from jail to courthouse. Nonetheless, the locally based makers of the revolutionary Mosaic software--which single-handedly catapulted the World Wide Web to the center of the high-tech universe--had to go to Silicon Valley to take their dream to the marketplace. (They helped found a little company called Netscape.)