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Comment by meheleventyone

8 years ago

This makes me think the question is better phrased the other way around. Why is SV compensation so high compared with the rest of the world?

4 comments

meheleventyone

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barry-cotter  8 years ago

A virtuous circle of people who make a fortune investing in other people hoping to make a fortune in the hope of making their fortune bigger. Silicon Valley is the place where agglomeration economics kicked in for information technology. That’s not really surprising. It had to be somewhere. Film has Hollywood, Finance has New York and London, Chemistry has the Rhineland, high fashion has Milan, Paris, New York and London.

What’s special about Silicon Valley is that nowhere else comes close, that the minimum efficient scale for a great many software ideas is small, that it’s new, the addressable market is close to the entire global economy, and most importantly, they’re talent constrained, not capital constrained.

  • meheleventyone  8 years ago

    Thanks, to me that is definitely the simple and obvious answer. It’s the one I come to as well viewing things from the outside. I do wonder if it’s too simplistic and appealing because it is so neat though.

swebs  8 years ago

Huge tech industry profits, high demand for skilled programmers, limits on foreign workers who tend to drive wages down.