It's probably an advantage for California but it's far from clear how major a factor it is in why Silicon Valley developed the way it did. My understanding is that the law that's the basis for non-competes not being generally enforceable has been in place for a very long time (1800s). Yet, Silicon Valley was fruit orchards while other areas of the country were the centers for developing computers and creating much of the technology behind the early Internet.
Indeed, and my question, having lived the tail end of Route 128's boom years and then its hard and final death, is why those other places got eclipsed by SV, with no clear sign that's going to change (modulo it looking to be harder and harder to make it work economically).
The only unique thing about SV is the unenforceability of non-competes, that was clearly absolutely critical in the original silicon days (https://en.wikipedia.org/wiki/Traitorous_eight) and probably sped things up by decades, I've also experienced two good pieced of technology killed by them outside of California, and I'm frankly left without a better explanation.
Just how important unenforcability of non-competes was for making SV into SV is debatable (eg, clearly did not differentiate from LA). More compelling reason for any state to make them unenforceable is that less enforcement has better outcomes (more startups, jobs, incomes, patents; well last is problematic but usually used as a proxy for innovation), _even when Northern California is excluded from the dataset_; see 10.1287/mnsc.1100.1280 or http://webdoc.sub.gwdg.de/ebook/serien/lm/DRUIDwp/10-02.pdf
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