Is Silicon Valley passe? Nah!

Gwen asks on the newly launched SG Entrepreneurs forum:

Is Silicon Valley passe? Way past its prime? Going down and getting replaced by India as the next IT hub?

This was my reply...

Well, I don't think so...
It really depends on what one means by 'past its prime' actually.
Yes, its true that among all the clutter of new startups in Silicon Valley, very few are really promising. The last time a 'Google' happened was... well, Google itself.
However, in essence, Silicon Valley today is what it always was - a great place to start a technology business. As an entrepreneur, one can still find all the people, resources and support they might need to get their business going in Silicon Valley. SV VCs are still investing in Big Hairy Audacious dreams... smart people are still aplenty in the valley... and Wall Streeters are still willing to bet their hopes on Silicon Valley. In all those respects, Silicon Valley is still Silicon Valley. And its probably going to stay that way for a while.
I say that because it ultimately boils down to one thing - the spirit of innovation and enterprise. And that spirit, like knowledge, cannot be given or taken. It can only be shared.
In Silicon Valley, the moment an opportunity arises, people pounce on it with smart innovations and smart ways to make those innovations into businesses. Now, another group of people in another part of the world are learning to do that. And they are targeting "local" opportunities that lay untapped until today.
Today, Indians and Chinese from Silicon Valley are going back to cater to the opportunities back home. And by doing so, they are just spreading this spirit. They are making another part of the world aware of the opportunities that exist. The only thing that is going to happen is that more problems are going to be solved.
India and China are now witnessing their own little nirvana with all the attention being focused on them. And we all can see them growing into strong hubs of innovation and enterprise (India has already been an 'IT' hub for a while now). But, I don't think this will happen at the expense of Silicon Valley.

What do you guys think? Is Silicon Valley slowly losing its importance? Is this initial trickling of money to the Asian superpowers going to turn into an avalanche soon? Will it drain Silicon Valley? Or will it rejuvenate it?

Prashant.