Foreign Investment and Technological Development in Silicon Valley

This article examines foreign investment in high-technology industries in Silicon Valley. It describes extent of this investment and then explores implications for future global role of American economy. Significant foreign investment signals inability of U.S. high-tech firms to grow to maturity without infusion of capital and other resources from elsewhere. The solution is not to impede flow of foreign investment, but in building infrastructure—education, skills, savings, employee commitment, and like—needed to support development of later-stage capacities in innovation process. Failure to do so may enable firms outside United States to disproportionately profit from pioneering activity for which the Valley is so famous.