For the last two years, with the economy collapsing all around it, the technology sector and Silicon Valley in particular have proven to be particularly resilient.
But that might not be the case forever. Sooner or later, as the economy contracts and everybody cuts spending, the companies that power Silicon Valley—the startups, venture capitalists, banks and big producers of technology—are bound to be affected.
“Black Sunday (a week ago) was really a watershed—we’ve crossed a Rubicon,” said Paul Saffo, a Silicon Valley forecaster. “I think it will change everybody’s attitudes about deregulation, toward the landscape of risk and toward all these new-age investments—these derivatives and hedges.
“In the short term, people will be risk-averse. In the long term, it will make people get back to the basics,” said Saffo. “We have risk that people can understand—a startup that gets risk capital. They do well if they deliver something of value to the purchaser, not because of a complex mathematical formula living inside a computer.”
Blog of Intellectual Capital 