Top 10 IT locations

5. San Francisco

Shaun Nichols: When we were coming up with this list I joked that San Francisco should be considered a separate region from Silicon Valley if only because companies from the valley actually turn a profit at some point. The differences between the two areas, however, are distinct and have become more apparent in recent years.

On the surface, it seems like San Francisco is sort of the mouthpiece for Silicon Valley; a place where the reporters and PR staff are kept so that they don't bother the engineers down in Palo Alto and Cupertino.

In reality, San Francisco has a technology sector all its own, one which blossomed with the rise of the "Web 2.0" era. Because an internet-based service doesn't require a large lab or factory space, startups were able to move from garages to small offices and apartments.

Today, companies such as Salesforce.com and Craigslist maintain their headquarters in San Francisco, while web sites such as Twitter have taken up residence in the trendy South of Market neighbourhood and made the former warehouse district the new hot place to find a start-up.

Iain Thomson: When I first came to this city over a decade ago South of Market was slum territory, with burnt out cars and warehouse raves abounding. Today it's one of the most trendy areas of the city and that's solely down to IT.

Silicon Valley is where you go to start up a business that needs lots of space to grow. San Francisco is where you come if you're a small services startup with low headcount that wants somewhere with good coffee and the best sushi this side of the Pacific.

Shaun and I may have had a giggle about the loss-making side of the business but the fact remains that online is king here. San Francisco is without a doubt the most wired city in America and it shows.

Our local paper, the Chronicle, looks destined for the scrap heap because Craigslist has stolen a lot of its revenues. Suggest going out for a meal and everyone reaches for their iPhone or Wi-Fi device to find the best place. The city is the heart of IT innovation, even if Silicon Valley is the soul.

4. Japan

Iain Thomson: When it comes to consumer electronics there's nowhere that beats the sheer inventiveness of Japan.

A walk through the streets of Tokyo, Osaka or Yokohama and you'll see shops stuffed to the gills with every gadget you can imagine and a few you can't. It's geek heaven and any technology enthusiast paying a visit must exercise considerable restrain or face angry calls from the bank manager.

Part of this inventiveness comes from research, with over US$1bn spent annually. The returns on this investment have been stunning. Japan leads the world in robotics, green technology, intelligent software and consumer electronics.

If I have one complaint about the Japanese IT market it's that they keep so much of it to themselves. I've had plenty of cases of being wowed by some new gadget (the last one being a laptop the size of a hardback book that ran Vista with grunt to spare) only to be told that you can only get them in Japan. Start exporting, please!

Shaun Nichols: The next time someone jokingly asked you where their robot butler wristwatch computers are, say that they're most likely entertaining a group of teenagers at some storefront in Tokyo.

Not only is the consumer electronics industry much bigger in Japan, it is also far more advanced in a number of areas such as gaming consoles and smartphones. Take the iPhone, for example: when consumers in Europe and North America were queuing up to get their hands on the device and raving over all of its features, analysts were worried that the Apple phone would be too " primitive" and short on features to really make a dent in the Japanese market.

To see the numerous consumer electronics areas in which Japan stands head and shoulders above the rest of the world, one only has to look at the gadget blogs. So often the coolest stuff on the gadget sites is from Japan, and almost just as often, those products are not being exported because the Japanese manufacturers are convinced that western countries are so far behind the times that we wouldn't even know what to do with these things.

It seems that if you want to see what the future of the consumer electronics industry in the rest of the world will look like, you only have to look at what was hot in Japan five or six years ago.

3. Bangalore

Iain Thomson: Bangalore has been an important city in India for centuries but over the last 25 years it has built up an IT industry that has given it the nickname of the Indian Silicon Valley.

The city accounts for more than a third of all IT jobs in the country and is home to some of the biggest names in worldwide technology. It has also spawned local start-ups that are now so successful that they are buying up the IT infrastructure of bankrupted Western companies.

The city's IT business is proof of the value of targeted government and business development plans. Clusters of firms set up for business and students are encouraged to train in IT to provide a workforce.

But it's not just IT workers who have benefited. The growth in the IT industry employs millions directly and indirectly and has helped the Indian economy by bringing in billions in revenue. Maybe in the years to come Bangalore billionaires will lie by their pools and talk about the good old days, as happens today in California.

Shaun Nichols: The wave of IT outsourcing which has taken place in recent years has no doubt made Bangalore unpopular with those in other cities who have lost their jobs, but it's impossible to deny that Bangalore has taken its places as one of the world's top computing hotspots.

The companies are often able to benefit from having a large crop of employees to choose from, extensive support from the government and a relatively low cost of living in comparison with other countries. This has created a sort of perfect storm for the growth of Bangalore's IT industry.

As Iain touched on, it will be interesting to see what will happen as the IT industry within Bangalore matures. Will it foster huge crops of startups like Silicon Valley does, or will large companies rise up and dominate the tech sector?

2. Taiwan

Shaun Nichols: The small, crowded island off the coast of China has become nearly synonymous with high-tech. In a region that is rich with big names in both consumer technology, enterprise technology and semiconductors, Taiwan has been established as a centre for all three.

Among the big names calling Taiwan home are Asus and Acer, as well as semiconductor firm TSMC.

Arguably, no other country or region in the world is as dependent on the IT industry for its economic well-being. This became even more apparent last week when the government of Taiwan stepped in to prop up the country's ailing DRAM memory chip businesses.

Iain Thomson: Taiwan produces around 80 per cent of the world's laptops and a significant proportion of other computer components. The country is a mainstay of the IT industry, which is both a good and bad thing.

On the plus side it has enabled the country to grow its economy at high rates for nearly three decades. On the bad side the pollution's terrible and one day China is going to take the place over and then we'll all be in trouble.

Too much of the IT industry's productive capacity is tied up in this tiny island state. China refers to the state as its own and one day will exert its control over the area, and to be frank there's nothing anyone can do about it.

The US might talk big about protecting Taiwan's sovereignty but when it comes to the crunch trying to fight the Red Army 2,000 miles from home soil isn't a rational notion. We will lose one of the most important computing environments and China will gain a valuable asset. It's happened before, look at Hong Kong for example.

1. Silicon Valley

Shaun Nichols: The unquestioned capital of the IT world, the stretch of land encompassing San Jose and San Mateo county has become home to so many companies that it is now simply referred to as "Silicon Valley."

This list of companies headquartered in the Valley is absurd, but let's go ahead and rattle off a few: HP, Sun, Oracle, Apple, Cisco, Google, Yahoo, Intel, McAfee, Symantec, AMD, eBay. The list just goes on and on.

The history of Silicon Valley reads much like the history of computing itself. From the garage where Hewlett and Packard first joined up, to the house where two guys named Steve started building computer kits named after a piece of fruit, to the fabled labs at Xerox PARC and even the dormitories at Stanford University that housed the likes of Jerry Yang and Sergey Brin, the area is crawling with high-tech historical landmarks.

The reasons put forward for the rise of Silicon Valley are numerous. Some point to the proximity of Stanford and UC Berkeley, which combine with the Livermore and Ames research labs to churn out a river of engineering and programming talent. Others note the relatively cheap real estate and liberal Northern California culture with helping to foster ambitious startups and crazy ideas.

Regardless of the reason, there's pretty much no debate as to what the world's top technology hot spot is.

Iain Thomson: OK, we're biased, we do live here after all. But the fact remains that if you want to find the greatest area of technical innovation you head to North California.

Like it or not the Silicon Valley area has been central to the development of the IT industry for nearly fifty years. Shaun's point about the intellectual quality of local education is well made but I think there's something more primeval at play here.

California is an odd place, a dysfunctional hodgepodge of cultures and climate. In culture terms it is the kind of place that inspires people with money to take a punt at a seemingly dumb idea. If something like Facebook, which has yet to make a profit, can be valued at billions by the locals then there's an engine for growth that was willing to take a punt at IT.

But there's also the climate. Two of the greatest cities in America are found here but it's also one of the most geologically unstable areas in the world. Everyone's waiting for the big one, and while this makes some more safety conscious (I got an email when I came here detailing where the emergency supplies were in case of an earthquake) it inspires others to acts of quiet lunacy, or as it's known; the American Way.

People here really do believe that if you build it they will come. It's the kind of madcap thinking that has been proved right too often to be ignored. It's the idea place for venture capital to get strong, and the rewards have been great.