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An Ecuadorian Silicon Valley: Pipeline to the future or pipe dream?

In the conclusion of his report from the middle of the Earth, Crave's Eric Mack does a reality check on an ambitious plan to build a Latin American Silicon Valley.

Looking out over the site of what could one day be Latin America's Silicon Valley.
Office of the President of Ecuador

Editor's note: This is the final installment of a four-part series. Read part 1, "Plotting the next Silicon Valley -- you'll never guess where;" part 2, "New Silicon Valley in the Andes: Promise and paradox;" and part 3, "Riding shotgun with the man behind an Andean Silicon Valley."

In the previous installments of this series on Ecuador's plan to build its own hub of research and innovation on par with the likes of Silicon Valley and South Korea's Incheon, I've focused on the big dream and the big possibilities.

It's time for a reality check to round things out.

First, let's review the plan for Yachay, the name chosen for the Ecuadorian government's planned "City of Knowledge" already under construction at a rural location in the country's northern Andean highlands. It all starts with a university that Rene Ramirez, Ecuadorian minister of higher education, science, technology, and innovation, hopes will one day be on par with the likes of Stanford University, the Massachusetts Institute of Technology, or the California Institute of Technology.

"We want Yachay to be part of that international network of knowledge development, putting Ecuador in a good position globally," Ramirez told me when I visited him in Quito.

Fortunately for Yachay, some of the other key players in that worldwide brain trust think it's a dream worth pursuing. That includes the California Institute of Technology, which is helping to design the plan that will be at the center of Yachay.

Ecuadorian-born CalTech professor Jose Andrade says Yachay is the best thing ever to come to his country. CalTech

"We're betting a lot on it, and I think the conditions are right," Jose Andrade, an associate professor in the engineering and applied sciences division at CalTech, told me over the phone.

Andrade grew up in Ecuador until he left for college in the United States at age 18, and he never moved back permanently. He was vacationing with his family in Ecuador when I spoke with him.

"The amount of resources in this country today don't compare to when I was growing up here, or even 10 years ago. Ecuador is in a place it's never been before, and the government has made a few moves that has put it in a very advantageous position," he tells me, adding his praise for an Ecuadorian population he calls "smart and hardworking."

But Andrade is also a realist. During our chat we both expressed similar sentiments about the plan. It's very easy to get caught up in the intoxicating rhetoric of a team with a big dream and the financial and logistical resources to make a serious go of it. I felt the same way sitting in an audience at South by Southwest listening to Elon Musk talk matter-of-factly about going to Mars. But then there's the ugly reality to contend with. While Ecuador's current government has made impressive progress in dragging the country into the 21st century, it's still a place where all the mail that was sent to me from the United States got lost in the black hole that is the Ecuadorian postal service.

Reasons for skepticism
It's an understatement to say there's plenty of room for skepticism, due in large part to Ecuador's track record of high poverty and crime rates, corruption, and political instability -- all of which go back at least three decades. As one reader tweeted in response to our series: "No go. Ecuador politics aren't so welcome around the rest (of) Latin America, (and) finally business (will be) affected by that."

As I pointed out earlier in this series, President Correa -- a close ally of the late Hugo Chavez, known for his antagonistic relationship with the United States -- has made some moves that have helped the country begin to turn around, but others -- like defaulting on billions in bonds -- could make some wonder about Ecuador's commitment to becoming a bigger part of the global economy.

Although the odds may be long, Andrade says the key to Yachay's success will be designing and executing just the right plan.

"The danger here is that we could fail, not because of resources or willingness, but because we are not smart in every single one of our moves," Andrade told me. "Making something as complex (as the whole Yachay project) happen is not trivial. It requires a lot of knowledge, smarts, and strategy."

He says he's been talking with Ramirez about a slower approach to building the university at the center of Yachay. Rather than diving right in and opening a world-class experimental university with cutting-edge facilities, he suggests starting with more theoretical and computational research that requires little more than decent computer systems and enthusiastic teachers and students to get off the ground.

"Because it's easier than doing experimental research and running things like a clean room or nanotech lab at a university that's never run one," he said. "As the school gets stronger and bigger and better, then maybe you get a clean room."

At the moment, Yachay University plans to start operations "at the end of 2013" with two initial programs -- a bachelor's degree in applied mathematics and a graduate program for bioorganic chemistry. The official promotional video from Ecuador's government below shows how it hopes Yachay University will take shape.

But perhaps the biggest thing standing in the way of Ecuador taking a big ol' bite out of that Yachay-flavored pie in the sky is the "Field of Dreams" question -- if you build it, will they actually come?

"Money can buy infrastructure," Andrade says, "but it can't buy you excellence or international relations with strategic partners that make things happen."

He cites the example of Saudi Arabia's King Abdullah University of Science and Technology, which opened in 2009 after a gorgeous campus was built in just two years, but hasn't exactly seen top academics flocking to campus to pursue their research.

"We will face similar challenges here," Andrade adds.

So how do you attract big-time scientists to your crib? Invite the biggest-time science name you can think of to come check it out.

Inviting Stephen Hawking
Professor Stephen Hawking accepted an invitation to visit Ecuador earlier this year to offer support and advice on moving forward with Yachay. At the last moment, Hawking was forced to cancel the trip due to health concerns, but the endorsement of the concept was good for some press.

Presuming the university does get off the ground, the next step is to convince an even broader array of researchers, entrepreneurs, and companies to invest in the concept and move some part of their operation to the Latin American (and more geographically accurate) version of a modern Middle Earth.

An artist's rendition of Yachay University. Screenshot by Eric Mack/CNET

The good news for this pitch is that Quito is only about a four-hour flight from Miami. The bad news is that Ecuador offers none of the substantial supply chains and other competitive advantages (except perhaps low labor costs) that have turned eastern Asia, particularly China, into the world's factory.

If you build it, perhaps Stephen Hawking will come, but that doesn't mean that you'll get the rest of them to come to be able to build the rest of it.

And yet, history has shown us the status quo can be smashed, and miracle turnarounds on a scale much larger than that of modern-day Ecuador (see Japan, South Korea, Apple, and a little place called China) have come to define the technological world we live in today.

Over the next few years we'll be able to watch and see if Yachay grows to create a new center of gravity for innovation along the equator. Project manager Ramiro Moncayo says classes at Yachay could be in session by the end of 2013, but CalTech's Andrade suspects it will be five years before the university begins to realize its full potential. Andrade told me it will likely take another decade or two beyond that point for the rest of the vision -- research centers, tech incubators, an industrial park, and surrounding cosmopolitan city -- to materialize. But he says it could be well worth the wait.

"This could be a game changer, and that's a great thing."

A Korean delegation tours the future site of Yachay by truck. Office of the President of Ecuador