AnnaLee Saxenian

Why is it that in the ’90s, business in California’s Silicon Valley flourished, while along Route 128 in Massachusetts it declined? The answer, Annalee Saxenian suggests, has to do with the fact that despite similar histories and technologies, Silicon Valley developed a decentralized but cooperative industrial system while Route 128 came to be dominated by independent, self-sufficient corporations. The result of more than one hundred interviews, this compelling analysis highlights the importance of local sources of competitive advantage in a volatile world economy.

Like the Greeks who sailed with Jason in search of the Golden Fleece, the new Argonauts--foreign-born, technically skilled entrepreneurs who travel back and forth between Silicon Valley and their home countries--seek their fortune in distant lands by launching companies far from established centers of skill and technology. Their story illuminates profound transformations in the global economy. Economic geographer AnnaLee Saxenian has followed this transformation, exploring one of its great how the "brain drain" has become "brain circulation," a powerful economic force for development of formerly peripheral regions. The new Argonauts--armed with Silicon Valley experience and relationships and the ability to operate in two countries simultaneously--quickly identify market opportunities, locate foreign partners, and manage cross-border business operations. The New Argonauts extends Saxenian's pioneering research into the dynamics of competition in Silicon Valley. The book brings a fresh perspective to the way that technology entrepreneurs build regional advantage in order to compete in global markets. Scholars, policymakers, and business leaders will benefit from Saxenian's firsthand research into the investors and entrepreneurs who return home to start new companies while remaining tied to powerful economic and professional communities in the United States. For Americans accustomed to unchallenged economic domination, the fast-growing capabilities of China and India may seem threatening. But as Saxenian convincingly displays in this pathbreaking book, the Argonauts have made America richer, not poorer.

Immigration has always been an important policy issue for California, However, researchers and policymakers have focused most of their attention on low-skilled immigrants. This study focuses, instead, on the highly skilled immigrant entrepreneurs who are managing high-tech firms in Silicon Valley. Chinese and Indian computer scientists and engineers were running one-quarter of the region's high-tech firms in 1998. In that year alone, these firms accounted for nearly $17 billion in sales and over 58,000 jobs.

Foreign-born entrepreneurs in Silicon Valley are becoming agents of global economic change, and their increased mobility is fueling the emergence of entrepreneurial networks in distant locations. In this report, AnnaLee Saxenian investigates this development by drawing on the first large-scale survey of foreign-born professionals in Silicon Valley. Focusing on first-generation Indian and Chinese immigrants, the report compares their participation in local and global networks both to one another and to that of native-born professionals. The results indicate that local institutions and social networks within ethnic communities are more important than national or individual characteristics in explaining entrepreneurial behavior. The report also suggests that the so-called brain drain from India and China has been transformed into a more complex, two-way process of "brain circulation" linking Silicon Valley to urban centers in those countries.