[lukemercado]

> I don't see how wealth is lost when it is just being redistributed. The workers didn't disappeared, they are just living elsewhere, bringing business opportunities and improving across many different places.

If I'm recalling the theory of it correctly, the whole reason Business Clusters exist (and form) is because there is, essentially, value in being together. Or at least, there's economic value in reducing the logistics required to move goods from one part of the value chain to another. For this reason I don't suspect we'll see the dispersal of manufacturing business clusters.

A huge part of my digging was trying to understand whether this applied to Silicon Valley or not. I decided that it did, but not because of the software, instead it was because of the VC + Startup relationship. VC's want to meet the people they're giving millions of dollars to and startup founders want to meet the people they're giving control (or massive influence) of their company to. It remains to be seen whether Zoom satisfies this need or not.

> Perhaps it will be healthier for the economy as a whole than having only a handful of cities as beacons of investment.

It might. Technology has changed dramatically since we last had material distribution into the suburb and rural areas of the nation. Maybe that will overcome the benefits of centralization.

[nradov]

Traditionally VCs centered around Sand Hill Road wanted all of their portfolio companies within easy driving distance so that they could attend at least two in-person meetings per day. Obviously that requirement has started to break down.

Proximity to universities has also been a key factor. Silicon Valley has two world-class research universities plus numerous second and third tier schools nearby to act as sources for new technologies for commercialization.

In the early days proximity to Moffett Field and NASA Ames also helped to launch the Silicon Valley innovation engine. There was a lot of cross pollination of people and ideas with military and aerospace.

[surgical_fire]

I understand centralization in the sense that you so aptly put in bringing benefits in a very similar vein of economies of scale.

A bunch of businesses in the same city benefit from shared infrastructure (in a broader sense) and a large pool of labor.

But when we specifically talk about knowledge work, where the output is not a physical good (and even when the output is a physical good but that requires a lot of knowledge work before it can be produced) does the centralization even make sense? Technology vastly expanded the possibilities in terms of infrastructure and pool of labor. The limits now may be more in terms of the cultural shift and government regulations.