Industry in Silicon Valley: a fruitful cooperation

This is the reason for the growing cooperation between industry and Silicon Valley

There is a remarkable density of world-famous companies in San Jose, where names such as Apple, Google, and Facebook can be found. Silicon Valley stands for ingenuity, software developments, and unconventional people. Industry has now discovered this for itself.

At first glance, you might think that industry and Silicon Valley would not be compatible. But if you take into account that digitalization is continuing to advance in industrial manufacturing, then it’s clear that they have much in common. It comes as no surprise that industrial companies are moving to Silicon Valley and that Silicon Valley sees the potential in digitalized production.

“Every company is a software company”

Electric Cloud is a good example: Founded in 2002, this software company produces programs that automate and accelerate the testing of new software solutions. Customers often come from industry. Siemens is one such company, but it is not just a customer – with its own venture capital unit, it is also an investor. “Every company is a software company – or should at least be one,” states Steve Brodie, CEO of Electric Cloud.

Production goes digital

The reason for the growing cooperation between industry and Silicon Valley is the increasing digitalization of production. Catch phrases include the “fourth industrial revolution,” “Industrie 4.0,” “machine-to-machine,” and the “Internet of Things.” Software and hardware are increasingly converging in industry, and robots are entering production. The result is that in Silicon Valley, the focus is shifting toward industry. At the same time, an increasing number of industrial companies are moving to Silicon Valley and settling there permanently, including carmakers such as Volkswagen, BMW, and Mercedes, which are working on the car of the future.

Silicon Valley is changing

There are several reasons behind this development: US President Barack Obama is calling for the modernization of US industry, labor costs are rising in Asia, and the Cloud is making the use of robots as well as decentralized computing easier. The New York Times has already written about a “hardware renaissance in Silicon Valley.”