Why does a single area dominate one industry? Detroit with cars in the 1960s, Silicon companies in California in the 1980s, .... Before the computer revolution, there was no centre of electronics. A lot of work was done in the UK, Japan, the US, and other countries. And yet, most of the computer design is now centred in the US.
I am beginning to think that the core reason why the US forged ahead with computers was that it had a large number of initial hobbyists and tinkerers. Many individuals tried different ideas. Most of the ideas made no commercial sense, but there were enough ideas that reached commercial success. The initial tinkering group found themselves employed at companies that were successful. Apple started out as a tinkering collection, with Steve Woz designing motherboards for sale for $666.66. He had worked previously at Hewlett Packard, and brought his impressive tinkering skills to bear on the Apple I and the Apple II. Dell, Compaq, Intel, they all had a core group of tinkering engineers who had a commercially viable idea. Everyone was producing things, and most were of dubious value. But for every hundred bad ideas, there was one Apple or one Microsoft. And that hit-rate was enough to sustain entire generations of engineers. The UK had some tinkerers but their total number was small compared to those in the US, so while they had some success, they couldn't sustain a lead.
This is happening in the mobile world, all over again. College students in the US are making apps for their iPhone and Android devices. Most of them are failures, but enough are succeeding in the San Francisco area to create a virtuous cycle. Many college students are getting together to form two-person startups around their iPhone app.
I think this tinkering and production of ideas is the reason for phenomenal American success in computer hardware, Web 2.0, and mobile applications. One of reasons for this is cultural: American individuality recognises the lone wolf who is trying something new, even if the idea isn't mainstream. The other is the large payoff to a successful venture. The third is the general risk-loving attitude: students willingly take a year off from University to try out a startup, working families try a startup even if they know it might cause some hardship if the venture fails. College students are happy working on some idea they love.
All these factors contribute to an environment where tinkering and idea creation is nurtured and idea creators are rewarded. Even if most projects fail, enough of them succeed that the job market is always looking for engineers and other tinkerers. Many people working at Apple or Google today have a varied history of trying out different ideas and learning from their mistakes.
I see this trend most clearly in hobbyist hacking involving the Arduino or other micro controllers. Again, a lot of tinkering is being done in the West. The difference is that there are a significant numbers of Chinese hobbyists involved. At first, this was because the manufacturing had moved off to China, and the Chinese engineers were exposed to a lot of Western products and ideas. Now, we see many Chinese engineers tinkering and experimenting. Unlike the Web or mobile applications, electronics hacking doesn't require an excellent command of English, and some Chinese electronic designs are approaching the best in their class.
It seems to me that countries should focus on nurturing creators. It pays off in the long run.