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Comment by hwstar | Hacker News Reader

Silicon valley doesn't produce much hardware like it did in the past. Instead it creates businesses with questionable customer value such as social networking, personal assistant services, short term house rental services, and other software-as-a-service businesses. There will be an implosion of these SAAS businesses at some point. After the dust clears, it will be interesting to see if Silicon Valley still is able to produce goods which customers want, or if some other area of the world will take over (e.g. Bangalore, Shenzhen).

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There are so many faulty premises here

* silicon valley doesn't produce much hardware (evidence for this being true? obviously we hear a ton about software, but what about tesla, intel, nest, apple, google, etc?)

* businesses such as social networking, personal assistance services, short-term house rental services, and other saas have questionable customer value (why?)

* there will be an implosion of these saas businesses (why?)

>silicon valley doesn't produce much hardware (evidence for this being true? obviously we hear a ton about software, but what about tesla, intel, nest, apple, google, etc?)

Consider the amount of hardware that a modern smart phone replaces such as the calculator, phone, video camera, television, radio, clock...

They are producing less hardware because hardware is becoming increasingly integrated as software:

>The hardware world tends to move into software form at the speed of light.

-Marshall McLuhan

I do partly agree with you, but there are still some fundamental things going on in Silicon Valley. On-line education, I think, has the potential to be very transformative. Self-driving electric cars could also have a very positive effect on the world as well (including solving the "last mile" problem with train travel). There's also a lot going on of course with bioengineering, and while I wouldn't necessarily equate this with silicon valley, Stanford, Berkeley, and UCSF are of course highly relevant research institutions. And let's not discount the advances in distributed computing in making all of the above possible, some of which did come from silicon valley companies.

Of course, just because these things may greatly improve the quality of life doesn't mean that they'll create jobs. They may destroy them, and while so far people have found new industries and jobs to replace the ones that become obsolete, I suppose there's no guarantee this will continue to be the case in the future.

I was referring to a time when Silicon Valley was all semiconductors, electronics, and computer hardware. There are probably 10 SAAS business for every one producing something tangible. This is the problem.

> There will be an implosion of these SAAS businesses at some point.

Why?

Nothing is ever done for free by businesses (Even though it appears like it is free, you do pay for it indirectly) At some point the profit motive will drive businesses to take things too far and threshold will be crossed. This will either result in customer defections, or increased government regulation. A shakeout will ensue, and only businesses strong enough be profitable will remain.

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