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Around the globe, new 'Silicon Valleys' emerge

As software jobs move to India and beyond, California could lose its footing as tech startup capital of the world.

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Every so often, Walter Wilson wonders if he should become a plumber.

It's not that he is repressing a deep affection for S-traps or porcelain fixtures. Rather, it's the fact that, to him, the Silicon Valley of old is dead.

Just a few years ago, he was a star of the silicon revolution. As a software developer, Mr. Wilson was such a precious commodity that tech companies pleaded for Congress to let in more of his foreign colleagues to meet what seemed a bottomless demand. Now, however, Wilson can't find a steady job.

The collapse of the tech economy hurt, to be sure. But that's not what has him daydreaming of sink snakes. He's been pushed to his financial edge because, increasingly, jobs like his are being sent to India.

For years, companies from carmakers to telemarketers have cut costs by replacing American workers with cheaper employees based abroad - and tech companies have been no different. But Silicon Valley had always stopped short of sending its high-skill research and design jobs abroad.

Now that it, too, has joined the trend toward outsourcing, Silicon Valley's future as the lodestar of the tech universe is at stake. For the moment it means that many workers will need to reinvent themselves or relocate.

More deeply, though, it points toward a new kaleidoscope of "Silicon Valleys" worldwide, as foreign engineers now doing the work of Silicon Valley corporations spin off to form their own startups.

It is the same pattern that helped create Silicon Valley's unique startup culture, as young designers at firms such as Hewlett-Packard and IBM broke away to set up their own businesses. Now, the tech industry's desire for cheaper labor is sowing these seeds around the globe.

"We're seeing a fundamental shift," says Jim Koch, director of the Center for Science, Technology, and Society at Santa Clara University. "Innovation is becoming a truly global phenomenon."

That is partly the result of economic necessity. The legendary excess of the late 1990s has been followed by a new frugality in which investors and venture capitalists actually expect a profit.


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