December 1, 2000

IT PR: Silicon Valley Is Unique; Silicon Valley Is Everywhere

The Internet rush came and went quickly. At the beginning of the year, Internet stocks were still the market favorite, yet as the markets around world fluctuate, investors have lost enthusiasm, and some even consider these stocks to be moribund. Lou Hoffman, president of The Hoffman Agency, a PR firm in the Silicon Valley, said that the “burst of the bubble” enables investors to select quality stocks with more caution and rationale.

In his view, Silicon Valley collects technology talent from all over the world. Its open business environment and tolerance for risks and mistakes allow everyone -- including immigrants, recent graduates and locals -- to innovate and create new visions. At the same time, other professionals -- including public relations consultants, venture capitalists, lawyers and accountants -- help these ideas materialize and grow.

He claimed that the “burst of the bubble” has caused changes in the venture capital community, forcing them to return to the “old-economy” days when profit was the focus, and evaluate the startups more cautiously and rationally.

Since the second quarter of this year the focus of Silicon Valley venture funds has shifted to telecommunications, online services and software applications. Hoffman said that venture funds usually react to changes faster than the general market. Venture Capitalists sensed the weakness of the dot-coms before the Nasdaq and directed their investments into more solid IT industries.

Many people have compared Hong Kong to the Silicon Valley. Hoffman pointed out that Hong Kong has a complete network infrastructure, maturing Internet usage, an open telecommunications market, as well as improvements in government policies and use of computers in education. Investors regard Hong Kong as a center for venture investments. He noted that one reason The Hoffman Agency has decided to move its Asia-Pacific headquarters to Hong Kong is that many venture capitalists there place a high value on the services provided by public relations firms.

On the other hand, Hoffman stated that Silicon Valley cannot be replaced or duplicated, but other regions can establish “Silicon-Valley-style” communities by specializing in different technologies. Finland’s Helsinki has attracted talent in wireless communications, and it has been named a “high-tech cradle” alongside Silicon Valley. Hoffman also predicts that many more “Silicon-Valley-style” communities with specialized technology focuses will begin to appear in the future.

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