Debates about challenges and problems that afflict humanity often arise from the mind. Caught up in the sound and fury, you can hear people angered by media hysteria as they argue with jaded opinions vying with each other. Of course, cooler heads prevail in the online Think Tank, and in fact the topics are very intellectual, covering topics in almost every domain.

The topic recently came up regarding hacking of computer hardware and software patents. A Think Tanker asked in so many words; Is Silicon Valley overcharging for the products it produces?

Well, in a way they are overcharging, so that all the players get paid; R&D, Venture Capitalists, Entrepreneurs and workers with an outrageous cost of living there (microeconomic disaster). But remember the costs to produce technology. If you don’t have to pay for the R&D and steal it for free, then you can have zero royalties and/or full price to the retailer.

Not just the price of the incidental component you were contracted to do. (of course we are talking about types of computer technology). But the Chinese are also stealing other technologies such as laser, military, satellite, missile, space, submarine, biotech, nanotech, etc. It represents a serious threat not only economic.

Although my uncles produce and manufacture high-tech things there, it is not conducive to profitability. They grew up there, Stanford graduates; grandfather was a scientist from Stanford. Costs in the valley just don’t work out and a lot has to do with the bay and layout, with no concentric rings around the area the damn bay is in the way. Look at a map and the population and you can see why it is an economically inefficient area to attract labor. Robotics only partially solves this problem and real estate is another big problem.

In fact, while I realize these comments are not part of this conversation; Silicon Valley is very poorly configured in terms of land use and is not spread out like Houston, Los Angeles, or Kansas City. The cost of living is an important factor. So Silicon Valley with limited space (Bay and Mountains) is a victim of its own success.

For us they are overcharging, for them they are mass producing and offering a fair price, due to their artificially increased prices. That said, it doesn’t justify the Chinese stealing and then capitalizing on their intellectual property theft. I certainly hope this article will be of interest to you in 2007.