Silicon Valley is somewhat of an aberration at this point. There's an S-curve to concentration (whether in talent, resources, or attention) and while the bulk of American cities are hurting due to a lack of software talent, Silicon Valley is hurting in its own way. It has a lot of engineering talent but a collective lack of political talent (which is what prevents engineers from organizing and getting real equity instead of fucking 1% for the first engineer) and such abysmal HR/management that an exclusionary macho brogrammer culture (that wouldn't fly outside of VC-funded startups) has been allowed to emerge.

So, trying to replicate Silicon Valley isn't a good strategy. It's not very desirable. It's also not possible. Not for New York, not for Chicago, not for Seattle, not for Austin. Should these cities be grabbing a greater share of the new-technology action? Yeah, absolutely. But trying to replicate the culture of a sexist, racist suburban shithole whose high priests think it's OK to block off public beach access (cf. Vinod Khosla) is undesirable. It's happening slowly, but that shit is dying (although it will take two to four decades). Why does the contemporary Valley put such a high premium on pedigree? Because when a society goes into decline, nostalgia dominates. When the Valley was coming up, it didn't matter if you went to Stanford or UC-Irvine or a community college in Nebraska, so long as you were smart and could code. In its decline phase, you see the Stanford Welfare of Clinkle and Snapchat getting funded.

Talent has a natural desire to concentrate, and that might limit us to ~10 strong tech cities in the US, but Silicon Valley has blown past that natural inclination toward concentration. It's deep into the "congested" territory.

What makes Silicon Valley is that it's a condensation point for passive capital. Passive capitalists (teachers' pension funds that invest in VC firms) want returns, and don't seem to strongly care about where or how the capital is deployed. The priesthood that is trusted (in error) to do so are VCs who mostly live in California, and who almost never fund companies more than 30 miles from where they live, so the job and wealth creation is limited to a small geographic area (in which it's almost impossible for an engineer, if he's starting now or recently, to make wealth due to astronomical real estate costs) far away from where the passive capitalists live. Now, if the passive capitalists had a vote, they probably wouldn't want all of their money being directed at a small geographical area where most of them could never afford to live. All being equal-- and by "all", I mostly mean "return on investment"-- Nebraska police officers would rather their pensions be invested in Nebraska businesses and create jobs there... rather than have that money be funneled off to California. Of course, they'd be completely happy to have their money invested in California if that would bring better returns... but VC has been a low-performing asset class for a decade-- the VCs focus on their own careers rather than building great companies or generating returns on the portfolio-- so the passive capitalists are arguably getting screwed. If concentrating the passive capital in Silicon Valley was generating decent returns, then there'd be no reasonable argue against it, but it's not.

This is a long-form way of saying that I agree with you. Replicating Silicon Valley is a backward-looking strategy that won't work in Chicago or New York. These cities, instead, should focus on their own assets. I think Chicago (or Seattle, or Boulder, or for a longer shot, Minneapolis) is a contender for being a different kind of technical leader in, say, 2030... because Chicago has an unusual advantage of a perceived playing-from-behind while actually not being that far behind; that's fairly antithetical to the Valley's Dunning-Kruger smug cloud... but it won't look like the existing Valley. It'll be something different.