After spending 27 years in the SF Bay Area, starting five venture-backed companies and assisting with several more, I've come to a few conclusions about why other countries fail to reproduce the Valley, and these reasons have precisely nothing whatsoever to do with cramming people into overpriced hutches and making them sit in traffic jams for several hours each day just so they can work isolated in generic cubicles.
You need a few key things to replicate Silicon Valley, and none of these are about "changing the world" (which actually means "more pointless products that rely on ads to make people buy more things they don't need" or "financial engineering to make loss-making companies stagger forward in the hope someone will eventually buy them so the investors can cash out"). Here's what is required: a tolerance for failure. Startups are like drilling for oil: no matter how good your preparation is and how talented your team, there's so much random chance in the world that most wells are dry. Without tolerance for failure, entrepreneurialism cannot thrive. Most countries fail miserably here. Secondly, there needs to be a tax system that lets people become seriously rich when they do, by sheer luck and chance, strike oil. Capital gains tax has to be low, taxes should be deferred in order to support reinvestment, and all manner of other financial basics have to be in place. Most countries fail miserably here too.
In short, Silicon Valley is hard to reproduce not because there's any particular concentration of talent there but rather talent is concentrated there because the basic conditions pertain.
As most European governments would rather eat broken glass than reform their tax & investment rules, and as most people outside the Valley regard failure as practically a mortal sin, it's obvious that for all the hype and all the aspiration, few countries will be able to pull off the same trick. Regardless of whether they create physical mini-Valleys or whether they look to the online world. That part is largely irrelevant.
