Rash's Judgment: The Industry Stands on Broken Ground
 
Microbytes Daily News Service
Copyright (c) 1989, McGraw-Hill, Inc.
Mixed with the agony and destruction of the earthquake that hit
the San Francisco area last week is a message for the
microcomputer industry. It's a message that many in the industry
would prefer not to think about, but they know it to be true. The
message is that we have managed to arrange it so that the future
of our industry rests in a single neighborhood in California.
It's time we asked ourselves if we dare let it continue that way.
 
For those of us who work closely with the companies that develop
and manufacture the hardware and software that makes the industry
function, it became clear last week just how dependent we have
become on the area of Northern California near San Francisco.
From Wednesday on, calls were unanswered, products were left
unshipped, sources of information disappeared. The heart of the
industry has been stilled, at least for a little while.
 
This is hardly the fault of the people who work in these
companies. After all, they have to drive on the ruined freeways,
they have to care for families who suddenly are cast adrift, and
they may not have a functioning office to report to. On the other
hand, these people and the products they make are needed without
interruption by the rest of the world. The needs elsewhere
continue, regardless of the problems in Northern California.
 
There's no question that the people and products from the San
Francisco area are important to the industry and its customers.
After all, the industry was born there. It's because of the
industry that they refer to that area of California as "Silicon
Valley." The question is, do we depend on it too much, and is
there anything we can do about it if we do?
 
The growth of the microcomputer industry has caused San Jose to
grow beyond San Francisco itself in size. This success has caused
impacts that stem from the growth, as anyone who has dealt with
rush hour in San Jose will tell you. There is a severe labor
shortage in the area, to the point that companies are beginning
to hire staff with minimal qualifications. One executive told me
that he felt that the lack of trained staff in the area is
causing a noticeable slip in product quality.
 
While it's clear that the growth in the Bay area has caused its
problems, many argue that it's vital to the industry because of
the cross-fertilization that takes place between the companies in
the Valley. Clearly, this is also true. The booming industry
there has led to the location of more similar industry in the
same area. Partly this is because of the availability of skilled
workers, but it's also partly due to the fact that the people
starting the new companies already live there.
 
As customers, this concentration carries with it some significant
risks. If the quality of the work is dropping due to the dilution
of skilled personnel, we will see products that aren't as good.
We will also find that products cost more, because the cost of
manufacturing rises in response to the costs of doing business in
the Bay area. More importantly, though, we have the risk of what
computer professionals call a "single point of failure." When
something happens in the Bay area, it affects the industry, and
there is no back up.
 
There's little we can do now about the concentration of the
industry near San Francisco, but perhaps there is a great deal
we can do later. We can insist that our suppliers have locations
outside of those they have in Silicon Valley. We can make sure
that we always have enough of their products on hand. Most of
all, though, we have to make sure that we know that the heart of
the industry rests on broken ground, and plan accordingly.
 
                              --- Wayne Rash
 
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