Sam misses some hugely critical pieces, for example:

1. Good IT infrastructure

2. Plurality of high tech companies' headquarters

3. Proximity to major technology focused academic institutions

4. Legal infrastructure that enables innovation

All discussed previously here:

http://www.enterpriseirregulars.com/25271/silicon-valley%E2%...

and here:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=124508