The Economist recently argued that Silicon Valley’s innovation hegemony is waning and that it is a product of two factors: there appears to be more innovation happening elsewhere (good news), but that innovation in general also seems to be harder to achieve (bad news). Here is an excerpt from the article:

Other cities are rising in relative importance as a result. The Kauffman Foundation, a non-profit group that tracks entrepreneurship, now ranks the Miami-Fort Lauderdale area first for startup activity in America, based on the density of startups and new entrepreneurs. Mr Thiel is moving to Los Angeles, which has a vibrant tech scene. Phoenix and Pittsburgh have become hubs for autonomous vehicles; New York for media startups; London for fintech; Shenzhen for hardware. None of these places can match the Valley on its own; between them, they point to a world in which innovation is more distributed.

Part of the problem, of course, is rising costs in the Bay Area. Everything from the cost of living to the cost of operating a business. The article cites a recent survey where nearly half of all respondents said they are planning to leave the Bay Area in the next few years. This is up from 34% only two years ago.

I don’t doubt that rising costs are causing some people to look to other cities, as well as other countries in the case of draconian visa policies. But I am suspect of the claim that we’ve heat peak “innovation” – however you want to define that.