(FORTUNE Magazine) – One of my editors asked me why Silicon Valley wasn't producing major startups anymore--companies like Hewlett-Packard, Intel Corp., and Apple Computer.

Sometimes I wonder what those numbnuts at the home office do while they work. Maybe it's the New York City arrogance thing, which gives people there the idea that nothing important happens anywhere else. As soon as I heard the question, I thought of three companies: Yahoo, BEA Systems, and eBay. Each was founded in Silicon Valley in 1995 and has annual revenues of around $1 billion, generated by about 3,000 employees. Their market capitalizations are $9.8 billion, $4 billion, and $21.1 billion, respectively. Seems to me those numbers qualify them as major startups.

But we're not arrogant out here in Silicon Valley (hee-hee), so we take such questions seriously, no matter how flawed they appear. I've been hearing that kind of talk pretty regularly in the past 18 months, since the Internet and telecom bubbles burst.

The usual line goes something like this: The era of technology entrepreneurship is over. The days are past when a couple of entrepreneurs could come up with some astonishing new technology in their garage and create a whole new industry with a little money from venture capitalists. In fact, there's just not much left to invent--certainly nothing that would astonish us the way the Internet did in 1995.

People who think that, of course, could not be more wrong.

Their mistake is in assuming that Silicon Valley and the venture capital world exist to deliver computer technologies. Instead, you might look at venture-backed technology entrepreneurship as part of a new engine of economic change.

The broad sweep of business history: Agricultural societies for the first few thousand years. Merchant societies after about--what, the 15th century? Industrial societies starting in the 19th century, leading to national and global enterprises. The first venture-backed enterprise came along virtually yesterday--in 1957 with Digital Equipment, funded by the first venture capital firm, American Research & Development.

How does that deserve as much attention as the Industrial Revolution? Because venture capital became a government-endorsed way to back what had previously been unfinanceable crazy ideas jotted down on paper napkins. Entrepreneurs could get the money needed to start their companies without having to work for large corporations or the government. Sophisticated investors were excused from the oversight and regulation of publicly held companies by becoming limited partners in venture capital firms. Both the entrepreneurs and venture backers had a shot at getting really, really rich legally.

In other words, in the American economy we endorse the idea that it is okay for entrepreneurs to leave their comfortable jobs in search of the big score. Some people believe that idea made possible the incredibly rapid development and deployment of the broadband Internet from 1995 to 2001. Cynics will observe that many of the companies responsible for that boom are toast. True, but American businesses work well at redeploying technology and ideas.

Indeed, if you take the idea to its logical conclusion, it is the presence of venture capital and venture-backed enterprises that distinguishes the U.S. economy from virtually all other industrial economies. While venture capital has spread around the world in various forms, most other economies either don't know how to design a regulatory and financial environment that encourages entrepreneurship or discourage it for social or political reasons.

That's the point: Entrepreneurs tend to shake up the status quo. They are the engine of change in an economy. Most other countries think that's threatening, while we've discovered that it's a great way to create economic resilience.

Okay, so that "resilience" might be hard to see today. But things will bounce back. Silicon Valley's next new really big companies are already being incubated. They'll be telecom companies (yes, there still is a market), enterprise application makers, storage and security players. The Internet is still growing rapidly, and technology is essential to the growth of any meaningful American company.

So, my dear editors, you can't dismiss Silicon Valley so easily from your perch on the right side of the country. Here's a question for you: How come Wall Street isn't producing anything major anymore besides scandals?

STEWART ALSOP is a partner with New Enterprise Associates, a venture capital firm. Except as noted, neither he nor his partnership has a financial interest in the companies mentioned. He can be reached at alsop_infotech@fortunemail.com. His column may be bookmarked online at www.fortune.com/technology/alsop.