Here's my minimalist definition of "top-notch engineer" in regards to Silicon Valley startups:

- has experience working in the early stages of a venture-backed startup

- went to one of the top schools in the world, such as Stanford, MIT, Harvard, etc

- has an extensive personal portfolio of software projects on which they contributed

My point is that Silicon Valley "works" because it has lots of people that meet 2 or 3 of these bullet points. There is no place in the world that really comes close.

Nobody is objecting that you can surely hire people cheaper in other countries, but for small companies the cheapest labor source is almost never the winner. It's far more important to have the very best engineers.