Earlier quoted context omitted.
I mostly agree, though I think that California's massive amount of readily available tech venture capital, as compared to anywhere else on Earth, is a far more important factor in its abundance of startups, rather than its obscure law banning non-compete agreements.
The law isn't obscure at all, it's a fundamental part of employment law that separates California from many other states. And saying it's due to tech VC is saying there's a lot of tech success due to the overabundance of tech success. People who work at a company can quit and start a startup, even in the same industry, carrying with them their hard-won expertise. Without a legal cloud over their heads which will scar…
Since almost nobody (here or elsewhere) knows that this law even exists, it's reasonable to conclude that it is not a significant factor in the development of the local tech industry.
Moreover, all of the large tech concerns whose profits fund those VC firms would be much better off without this law and are openly against it. See, for example, the anti-employee poaching ring that Steve Jobs set up.