While I agree that cultural deficiencies exist everywhere, I think the evidence is strong that they can and do prevent success (i.e. the success Aaron is describing). Sean Safford’s research is a good example of the cultural legacy cost effect.

http://www.hup.harvard.edu/catalog/SAFWHY.html

I don’t buy the Weber thesis, either. My reason for bringing up Bay Area parochialism is precisely to argue that cultural deficiencies exist everywhere, and don’t seem to prevent success.

Like Aaron, you describe the same dynamic I describe. Bay Area parochialism helped to fuel Silicon Valley. The tech boom didn’t happen on established (i.e. brownfield) turf. Most of it occurred on farmland. It didn’t hurt that Stanford was located in the middle of this nowhere. But the proximity to a major urban center was also important in terms of foreign-born talent.

As for parochialism, some places have more of it than others. However, everyplace has it. To the extent that is mitigated defines the ceiling of innovation. I’m skeptical that there is some indigenous attitude that needs to be corrected. I don’t buy the Max Weber thesis.

Parochialism is anti-innovation. The local navel gazing is the deal killer. If you have too many insiders, then forget Google Fiber.

Anyway, Japan’s problem is that it’s in a liquidity trap. The US is in the exact same situation right now. Demographics are a problem, but not a very big one. Korea has the same demographic issues, but it’s still growing quickly because it’s not in a multi-decade depression.

CDC Guy: it wasn’t just MIT and Harvard. New England’s littered with universities; even poor small towns have universities that have existed for a couple of centuries. In the 1950s, it seemed quaint. Then the industrial economy started needing advanced science degrees and Boston rebounded. (The small towns just export their grads to Boston, mostly.)

Jim: greenfield areas can be just as parochial as brownfield areas. The Bay Area is actually a good example: the local planners are currently wasting billions on gold-plated transit ideas, and refuse to consider any example of success elsewhere. When one person mentioned they did something different in Japan, resulting in less infrastructure to build, the local planner replied, “Asians don’t value life the way we do.”

My point is that Boston had some “brownfield” characteristics that put it at a competitive disadvantage. Culture is one of the brownfield/greenfield variables (e.g. parochialism).

That Silicon Valley was/is unusually immigrant-dominated is well documented. The region stands out from any place of innovation. But looking at that second tier “tech zones”, they are outsider driven.

Boston became the #2 tech center in spite of the local culture. I think it is primarily a matter of attracting a critical mass of outsiders, not anything in the soil.

MIT plus Harvard.

There is no coincidence in the two top tech centers being near where a top engineering school/top business school pair exists.

I haven’t studied them in detail, but have some familiarity with Japan. The Japanese system involved many things that would appear to be very difficult to transfer to the US or the state level: keiretsu, lifetime employment, significant state aid to industry via MITI, a closed domestic market (even without any barriers, penetrating the Japanese market would be extremely daunting), and an artificially low yen.

However, Japan never lost its commitment to craft, quality, and R&D. It also has an aesthetic sense respected around the world. This left them less vulnerable to offshore competition.

Japan is not exactly a big success story these days though, despite its robust exports. However, a lot of the problems of Japan would appear to be demographic in nature.

There are a lot of directions you can go in once you realize the answer in both cases is “hardly any.”