Reading the articles and the comments is probably worth it, but I personally think that the NY Times is overstating the advantage of being in Silicon Valley.
I've personally been involved in the start-up world in Los Angeles for about 15 years, and have had the opportunity to work doing startup software development on many early-stage companies (e.g., eHarmony) as an acting CTO. LA is a vibrant community with a rich network of LA angels that fund early stage companies, lots of LA VCs, easy access to big media, lots of innovation in media, mobile content, games, green, health care, and many, many others. Networking in Los Angeles is a little difficult because of how spread out LA is and the traffic, but there's still enough innovation happening that how do get enough conversations with interesting people. My only other complaint is that right now it's very hard to find good technical people at all levels (but it's still easier than in SV).
Ben then asked an interesting question:
Where is the real innovation happening in e-learning? (And by innovation I mean the type that leads to products that can actually be used, as opposed to blue skies thinking.)
First - Ben - if you see my post - can I suggest that you submit your question to the LCB Big Question for February as something like: What will the next generation of eLearning tools look like? That's a great question!
Interestingly, I used to be involved in many more projects that indicated where next generation tools would be coming from (lots of us built authoring tools and LMS products from scratch before the right tools were available). I also used to be involved in start-ups working on interesting aspects of e-learning. However, I'm seeing fewer of these. Why? Because I believe that innovation in classic eLearning (courseware based) is lessening and the opportunities are going to fall to providing open-source, free-hosted and other commodity type solutions.
Instead, real innovation is happening at the edges. I'm personally spending more time building interesting tools like things that help people work on improving their customer satisfaction scores, or an online contest, or personal tracking systems, or personal knowledge management, or ... What's interesting in each of these projects/companies is that they are not selling to the classic eLearning buyer (training organizations).
So part of what is at issue is who is the buyer now? Will innovation come in eLearning? The answer may be "No" - because we are all still so focused on courseware that we can cross the chasm over to more innovative solutions.