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[Opinion] The “20-Minute Law”

Posted January. 06, 2007 06:47,   


“Looking for venture capitalists? Set up a company accessible by a 20 minute-drive from their offices.” This statement is in accordance to the “20 minutes’ law” in Silicon Valley.

Video conferences enabled by advanced broadband Internet and mobile phone technologies cannot replace firsthand meetings. Proximity is the key if you try to contact someone in person to discuss important matters. In the first half of last year alone, one in three IT firms based in the U.S. started business in Silicon Valley. Related businesses in the fields of accounting, legal services, real estate, and head hunting also come to the Valley following ideas and money.

Silicon Valley, the world’s most advanced IT industry cluster, was created in the early 1950s when Stanford University offered part of its land to companies. In line with the massive investments in science and technologies by the American government, the Valley successfully addressed Stanford’s financial difficulties and the need for industry-academy collaboration. Nevertheless, the media reported the demise of the high-tech business cluster repeatedly every five years, and it actually suffered a setback in the 2000 IT bubble burst. Still, brains, companies, and capital converge on the Valley and do so voluntarily.

President Roh Moo-hyun announced a ban on plant construction in the Seoul metropolitan area, citing a global trend of decentralization, the day before yesterday. This runs counter to the 20 minutes’ law, which emphasizes significance of proximity and clustering. Professor Nam Ki-beom of the University of Seoul, who presented other countries’ cases of regional development in the 2004 Presidential Committee on Balanced National Development, said that the world is not tending towards decentralization recently. Then how did the president get such a wrong idea?

Lombardi Bio Cluster initiated by the Italian government starting in the 1980s was a complete failure with poor cost-effectiveness. For all some local governments’ intervention in the formation of clusters, central governments in Nordic countries maintain its principle of laissez-faire. When companies’ rational decisions lead to clusters, governments play only a limited role to back them by easing regulations. The ban on plant construction in the metropolitan area is highly likely to prompt companies to build factories overseas where the 20 minutes’ law is readily applied. It is feared that the “innovative government” clamoring for a balanced regional development is now moving towards a balanced nationwide regression.

Editorial writer Kim Sun-deok, yuri@donga.com