[My colleague Al Lunsford recently pointed us to The New Argonauts because of the impact of Saxenian's 1994 book, Regional Advantage. DW]

AnnaLee Saxenian has a clear vision of how the global economy is being transformed and she has revealed it in The New Argonauts. Like Jason’s mythic quest for the Golden Fleece, the new economic landscape is being conquered less by policy makers, global investors, and multinational corporate behemoths than by legions of modern day Argonauts – technically skilled entrepreneurs from many nations who “sail” back and forth between their home countries and their other home in Silicon Valley.

Traditional economic worldviews assumed that the success of companies and countries from peripheral 20th century economies – Taiwan, China, India, Israel – were destined to build on the successes and advancements of leading edge G8 economies (U.S., Japan, Germany, France, UK, Italy, Russia). These worldviews anticipated a constant brain drain from the trailing economies to the leading economies, assuming talent would aggregate and then remain where the opportunity was. And, until recently, there was plenty of evidence for this view.

Not anymore.

Today’s global economic reality has turned this worldview on its ear – or at the very least forced a serious revision. The percentage of talent who come to the U.S. to be educated and then remain here to work has reversed – to spell it out: More people are returning to their homes to seek opportunity, even after many years in the U.S.

One current worry is that the U.S. now faces a brain drain as these technologically astute entrepreneurs exit our economy. Saxenian discovered that what we’re experiencing is not a brain drain but a “brain circulation.” Many, often two or more from the same country, are founding companies that think globally from day one. Rather than just competing on low cost – the traditional assumption of competitive advantage – they have mainly pursued strategic, innovative, value added trajectories all the while maintaining close ties to Silicon Valley relationships, technology and markets. Instead of attempting to reproduce Silicon Valley back home, these Argonauts are establishing complementary versions of Silicon Valley, each with its specialization. This has effectively given rise to a global technology business ecosystem. Within this system, the Argonauts are able to locate foreign partners as needed, manage complex organizations across cultures and languages, circulate know-how, and attract talent and capital. On top of which they make significant contributions to world-class education and research.

Saxenian shows how this transformation has occurred, moving individuals and collectives from the periphery into strategic positions in the global economy. She traces the development of informal social networks and formal organizations that tied together countrymen in Silicon Valley: Silicon Valley University created to serve the immediate local needs of Chinese in the area, the development of a network of service providers (attorneys, venture capitalists, accountants, headhunters, and consultants) who serve expatriate entrepreneurs. Back in their home countries, these entrepreneurs have been developing strategic systems of education and business that give each region a distinct localized competitive advantage that complements the advantages of Silicon Valley. The outcome is that these Argonauts have created a global ecosystem of cross-regional communities.

The Argonauts have created a global ecosystem of cross-regional communities.

Implications

There is much concern that outsourcing and global competition are causing U.S. domestic economic problems. Saxenian’s research shows that these Argonauts are pursuing alternative value added paths that complement what is being done in Silicon Valley. The productivity output per employee in Silicon Valley and the San Francisco Bay Area is double that of the rest of the U.S. in key technology sectors. The area attracts one-third of the venture capital invested in the U.S. while enjoying one of the most highly educated workforces in the world. The real danger to the U.S. economy is not the presence of foreign entrepreneurs. The real danger is our failure to match their preparation. As our nation becomes less and less committed to high quality education and research (despite rhetoric to the contrary), producing fewer and fewer scientists and engineers, Silicon Valley and the U.S. could lose its strategic position in this global ecosystem. The Argonauts will stop coming to Silicon Valley the minute it no longer creates value in the new global technology ecosystem. What’s more, if push comes to shove, we’ll find ourselves inadvertently launching a cohort of American Argonauts in search of the Golden Fleece, further depleting our human resources.

At the risk of being too obvious, the brain circulation Dr. Saxenian documents carries considerably more promise than threat. This is critical at a moment when current immigration concerns could lead to severely restricting this positive brain circulation if the argument prevails that there are too many nonnatives in the U.S. During the period of this research, one-third of the scientists and engineers in Silicon Valley were foreign born, compared to 15% in the rest of the country. It would be a grave mistake to miss the fact that the ethnic entrepreneurs among this group of scientists and engineers collectively accounted for $25 billion in sales and the creation of nearly 100,000 jobs for U.S. companies during the period of this study.

Other Lessons

• For businesspeople working on a biblical worldview, the research demonstrates the enduring power of cultural groupings over nation states. It also underscores the concept of oikos, the Greek word for household and the root word for economics. Economic activity has historically been rooted in the extended family. These new Argonauts are leading their households, that is, their relational networks over a global landscape, seeking to improve their future socially, educationally, and financially.
• For entrepreneurs and business leaders, Saxenian’s research provides a vivid new map of where and how the global economy is working. The disciplines and patterns of the Argonauts are a vital model for success.
• For community leaders, this book is a wake up call: Regardless of economic leadership in the past, your city can become irrelevant in the global economy and you can find yourself pushed to the periphery once occupied by Taipei, Bangalore and Beijing.
• For politicians, The New Argonauts demands a more insightful consideration of strategic immigration issues.
• For educators, this book is a call to raise our commitment to elevate the quality of education posthaste.
• For students and young workers entering the work world, think globally, now.

Economic geographer, AnnaLee Saxenian is Dean of U.C. Berkley School of Information. She is also the author of the groundbreaking, Regional Advantage: Culture and Competition in Silicon Valley and Route 128.