There's research that credits the fact that SV is in California and not, for example, near Cambridge MA, to the fact that non-competes aren't enforceable in California.
I've also heard a theory from a friend that one reason SV companies develop new technology so quickly is because the free movement of employees between companies is essentially the de facto transfer of technology between companies.
Of course things like trade secrets won't be transferred, but the general skills, ideas and know-how can quickly spread from company to company. In contrast, in regions with non-competes, companies are effectively more siloed.
Of course. It also encourages competition, especially from new startups.
Imagine Facebook had to wait for a couple of years to be able to hire any senior engineers with the knowledge and skills to scale their services.
They would lose momentum, and quite possibly fail as their service would be constrained by severe scaling and reliability issues.
The reason Facebook and other unicorns were able to thrive in SV is because they were able to poach dozens of experienced engineers from other companies, that are all arguably its competitors.
If you like startups, non-competes are some of your worst enemies.
Of course things like trade secrets won't be transferred, but the general skills, ideas and know-how can quickly spread from company to company. In contrast, in regions with non-competes, companies are effectively more siloed.