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Sorry, big tech. Startups now are the innovators, ex-Cisco CEO says

Students are headed for startups, not tech giants, John Chambers says.

JC2 Ventures leader and former Cisco CEO John Chambers speaks at Techonomy 2018.

JC2 Ventures leader and former Cisco CEO John Chambers speaks at Techonomy 2018.

Stephen Shankland/CNET

For the last decade, big tech companies have wooed top students from universities to sustain their pace of innovation. But these days, young talent just isn't interested, said John Chambers, who for years ran one of those tech giants.

Chambers, formerly chief executive of network equipment giant Cisco and starting this year the leader of venture capital firm JC2 Ventures, now has a vested interest in the startup world. And he regularly tours top universities -- Stanford, MIT, the École Polytechnique in France, the Indian Institutes of Technology in India in the last month -- to survey the mood.

"I ask students, do you want to work in government or large companies or startups? Eighty to 90 percent raise their hands for startups," Chambers said Monday at the Techonomy conference in Half Moon Bay, California. That's a huge change from the last decade, when innovation was evenly split between big companies and startups, he said.

It's just one person's perspective, but there's no question big tech companies face challenges. The likes of Google, Facebook, Amazon and Apple are under pressure to keep the revenue and profits growing, but it's hard to create big new billion-dollar business units. Today, Apple is raising prices on its products dramatically, while efforts by Google and Facebook to keep advertisers happy is in opposition with protecting our privacy.

Both types of companies share one challenge, though: setting a culture that's good for society. Big technology companies haven't made much progress in areas like hiring women.

"Our numbers have been stuck at 25 percent for a decade," Chambers said.

Now he won't even look at investing in startups, no matter how promising, if they don't have the right diversity priorities, such as interviewing at least one woman for every open position.

"Most startups don't think about culture," Chambers said. "But culture is as important to me as vision and strategy."

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