Could Silicon Valley Become the Next Camden?

When I moved to Camden, New Jersey, I expected to find a city struggling with poverty, unemployment, and crime. I didn’t expect to find a post-industrial landscape littered with technological relics that only an engineer like me could love. 

My apartment is in a converted factory that fills a city block, and its wall of 14-foot-tall windows was designed to create a well-lit space for industrial workers. From those windows, I can see the river where barges once brought in raw materials for manufacturers that have been gone a long time. A short walk away is a century-old warehouse hand-crafted of brick. Even closer to home are the remnants of the coal yard that powered acres of manufacturing plants. It’s all here if you know where to look. So is the poverty and crime I’d heard so much about.

Peering out those fabulous windows at a notoriously dangerous place, I wondered:  “What happened?” and “Why?” Tens of thousands of people once worked in this building where I sit, all of them earning good wages by making things that nobody buys any more. The view from my living room takes in acres of parking lots, and their pavement covers the foundations of still more dead factories. On the far side of the building? More of the same. Within eyeshot of this spot, there were once enough industrial jobs to keep an entire city employed. Now? I daresay there aren’t any.

I doubt that the people working here in the early 20th century could have imagined how quickly the hulking buildings, the towering smokestacks, the massive coal yard, and the far-flung rail spurs could simply disappear. No ruins. Not even any stray bricks. Razed. Demolished. Gone.

Imagine an entire sector of our economy—like the tech sector, with all those jobs in Silicon Valley and beyond—evaporating over the course of one worker’s lifetime. Earlier this month, Microsoft announced it was cutting 14 percent of its workforce. Those 18,000 lost jobs constitute the largest layoff in the company’s history. As I look at those figures, I think of Camden as it once was, and wonder if the future always looks like this: gritty and deserted. Maybe yesterday never sees itself being crowded out until it’s too late. “Eventually,” Bill Gates famously said, “all companies are replaced.”

Camden has its own place in tech history. The city gave us our phonographs, our Victrolas, our radios, our televisions. Camden helped us talk to men on the moon. Just as Detroit gave us the cars we love, Camden gave us the devices that keep us entertained. The empty land out my window was home to a tremendous communications company that has had a lot of names—one of them was RCA Victor.

It’s easy to retain some distance from the failure of a factory that made gadgets buried so deeply inside a household appliance that they might as well have been invisible. By contrast, our entertainment devices today are our daily companions. The closure of a factory that made the compressor for your refrigerator is newsworthy, but the loss of the plant that built your childhood TV or the creaky old set your grandparents bought before America’s gadgets started being built overseas?  When you imagine those people losing their jobs, it’s somehow personal.

The communications industry in Camden began when Eldridge Johnson, a machinist working in a small shop, was presented with a problem. Hand-cranked phonographs worked, but they sounded terrible. In his words, they “sounded like a partially educated parrot with a sore throat and a cold in the head,” according to several accounts. Johnson solved the problem with a spring-wound motor, and the business that he would call The Victor Talking Machine Company began selling record players to a world that hadn’t known it needed them. His company’s Victrola—with its finely crafted wooden cabinet enclosing a flaring horn —has come to symbolize early phonographs for many people. Eldridge Johnson gave people of all classes a new way to connect with their world in the same way that Steve Jobs and Steve Wozniak gave us computers to connect to ours. Owning the latest Victrola was a status symbol on a par with sporting the latest iPhone. In a sense, phonographs and smartphones are just two points on a continuum that puts information ever more firmly in the hands of the masses. Maybe that continuum of brilliant tinkerers goes all the way back to Gutenberg. Or Prometheus.

Most of Johnson’s customers had never considered that they might hear an orchestra in their parlors, but they bought talking machines and Victrolas and adapted to the miracle of recorded sound. In 1904, the world’s largest and most expensive sign was erected on Broadway in New York, illuminating its message with a thousand electric lights: “The Opera At Home.” The makers of the Victrola knew what they were selling to customers—entertainment, novelty, status, and the world at their doorsteps. It’s hard for us to look back a century and grasp the impact of the affordable phonograph. When we get a new entertainment gadget, it has a pedigree. A flatscreen TV takes the place of a tube TV that took the place of a black-and-white TV that took the place of a radio that took the place of a phonograph. A smartphone takes the place of an MP3 player (among many other things) that descends from a CD player, a cassette player, a stereo and, ultimately, a phonograph.

But what did the phonograph replace? Before the 20th century, experiencing music at home meant hiring a chamber orchestra to play dance music for your formal ball—if you were rich. If you weren’t rich, you only heard music in your day-to-day existence if you made it yourself or if you had a talented friend. The nearest analogue in modern life to the first mass production of recorded music and phonographs is the advent of the Internet. If you are old enough to remember when you realized that your home computer gave you access to libraries, music collections, video archives, and hilarious cat videos from all over the world, then you can understand why factory buildings leapt out of the ground at Victor’s Camden plant.

The trouble with tooling up to meet a sudden worldwide demand is that demand is eventually sated. Victor responded in precisely the same way that modern entertainment companies respond to the threat of obsolescence. They added features like volume control and furniture-like wooden cases that hid the horn amplifying the instrument’s sound. They developed product lines at many price points, making instruments with decorative cabinets that grew increasingly elaborate as the price rose. Victor employed as many as 125 skilled woodworkers to build those fine mahogany cases for their talking machines. As electric recording and amplification came into vogue, Victor’s products adapted, but demand was no longer fueled by the novelty of a brand-new product.

Then, radio brought unlimited music for free, putting the market for home phonographs into the doldrums. Victor responded to the pressure of broadcast music by shifting into radio production and eventually merging with RCA. Later, the company worked to develop televisions, communications instruments for the space program, and a lot more. Still later, other companies found more ways to sell us entertainment, novelty, status and the world at our doorsteps.

Just over a century after home phonographs became the rage, we’re so accustomed to having endless information in our pockets that we complain when the Internet takes an extra second to deliver an email to a person sleeping on the other side of the planet. Of course, that same technology also makes it possible for someone on the far side of the Earth to do our jobs.

In Camden's heyday, Victor built factory buildings and hired workers at a furious pace to meet demand. A record player isn’t much good without a record, so Victor brought Enrico Caruso to Camden to record. Jelly Roll Morton came, too, and they both sold a lot of records, because the invention of a new playback technology requires a new industry to produce things for people to play back. (If you’ve ever replaced a DVD collection with Blu-ray discs, just in time to see movies go streamable, you already knew that.)

Entrepreneurs can’t go on forever, and corporations morph and move on. Johnson sold his interest in Victor, which merged with RCA just in time for the Great Depression. A 1930 aerial photo shows the RCA complex shaking its fist at the Depression behind a haze of industrial smoke. Somewhere in this photo is an entire lumberyard of mahogany boards that master craftsmen would use to make the cabinets of Victrolas that are sitting, right this minute, in antique shops.

U.S. Census Bureau records from 1937 show that 13,030 workers, many of them women, were still drawing paychecks at RCA, according to the 2006 book Camden After the Fall. This is noteworthy when you consider that it had been eight years since Wall Street crashed. The need for communications technology during World War II boosted RCA’s production in Camden well into the 1940s. In 1950, 43,267 people had industrial jobs. Eventually, though, it gets hard to keep anticipating the next hot thing. Sales drooped and jobs drained out of Camden. The empty factories started coming down.

In 1972, industrial jobs in Camden were down to 15,700. Those numbers declined again over the next decade, dropping to 10,200 workers in 1982, less than a quarter of the 1950 numbers. It’s tempting to blame the modern tech sector for the loss of these jobs, but the chronology is off. Three of the earliest successful home computers—the Apple II, the Commodore PET, and Radio Shack’s TRS-80—were all released in 1977, far too late to be the source of Camden’s woes. The job of manufacturing the latest home entertainment device had moved on long before Silicon Valley emerged as a symbol of computing in general and home computing in particular.

By 2013, an aerial view of Camden conveys the end of smokestack industry in Camden at a single glance. Just three RCA Victor buildings remain near the middle of the photo: an office building, an apartment building and a gutted factory that may someday house condominiums. Everything else from the 1930 complex—acres of manufacturing buildings, warehouses, power plants, conveyors, barge moorings, railroad spurs, even that mahogany lumberyard—is gone. The coal yard labeled “RCA Victor Company” that jutted into the Delaware River has been filled in. Even the parking lots that took their places are nearly empty.

I’ve spent a lot of time walking around those parking lots. I know where the factories were and where the smokestacks stood. I know the places where environmental scientists are testing for contamination left behind by all that industrial activity, and I know what contaminants they’re probably going to find. I can even show you the pavement that covers the spot where Eldridge Johnson’s historic machine shop stood.

These empty acres are worrisome. The factories that filled them seemed monumental in their day. In the end, they proved much easier to move than the people who worked inside. Replacement jobs for local residents haven’t arrived. The city of Camden’s unemployment rate was 13 percent in May, according to New Jersey Department of Labor figures—that's more than double the national rate of 6.3 percent that month. It’s a short path from high unemployment to poverty, and they both correlate with the level of crime that puts the city atop lists of most dangerous places.

If Camden’s middle class could lose all those jobs, there is no magic holding Silicon Valley’s jobs in place. While it is true that industrial jobs are not technical jobs and stevedores are not coders, the market forces are the same. When a game-changing product hits the market, companies tool up to meet demand and they hire people. When the public’s appetite is sated and profits sag, those jobs evaporate or they go someplace where people will work for less. And since this is true, there is nothing to prevent any town from declining the way Camden did. The desk jobs could drain out of our office buildings. The buildings would stand empty for awhile, then they themselves would be gone. Here's something else Bill Gates is widely quoted as having said: “We always overestimate the changes that will occur in the next two years and underestimate the changes that will occur in the next ten.”

What can Silicon Valley learn from Camden and its empty acres? What can we learn?

From a business standpoint, the lesson seems to be that nothing lasts forever. From a worker’s standpoint, it might be that nobody’s skills are as irreplaceable as he or she might hope. From an investor’s standpoint, the takeaway lesson is to think twice about pouring money into a company so established that its failure is unimaginable.