Rogers, Everett M. and Judith K. Larsen.
Silicon Valley Fever:
Growth of High Technology
Culture. New York: Basic Books Inc.
1984.
From Chapter 13
"The Spread of
Silicon Valleys"
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I. Four Factors In Silicon
Valleys Success
1. Proximity to Research
University
2. Infrastructure
3. Climate, Amenities,
and Quality of Life
4. Entrepreneurship -Critical Mass
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II. History
A. The Boston -- Route 128 Story
1. The Great Depression -- MIT President
Compton's response
– Encourages applying new technologies
– Helps faculty to set-up own companies
– Goal re-build, re-industrialize the local economy
http://cs.ua.edu/~greg/personal.html
http://itel.mit.edu/itel/meetings/Jan00/mit_map.html
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II. History - Boston and Route 128
2. Need for financial infrastructure
 Previously centered in NYC
 Pres. Compton -- Initiates first Boston
venture capital firm
– American Research and Development
Corporation
– Bankrolled from Insurance Companies
– Provide high risk start-up funds
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II. History- Boston and Route 128
egeo312 Silicon Valley
http://www.scienceclarified.com/everyday/images/scet_02_img0192.jpg
3. WWII -- "the big easy" -- war research
funding pours in
 MIT builds up research funding
 Spins-off entrepreneurs
 New companies climb from 39 to 1,200
5
II. History- Boston and Route 128
4. High Growth era 1955-1971
– the Cold War gives warm feeling to Aerospace
industries
5. Viet Nam Era winds down 1972 - 1980
– economy sours
– 12,000 engineers/techies our of work
http://www.chicotown.com/pics
/military-industrial-complex.jpg
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II. History- Boston and Route 128
6. Second Coming post 1980 -- The “Mini”
& PC Computer Boom
– Local spatial agglomeration gives competitive
advantage to Boston
– Large skilled labor pool
– “Mini”-computer commercial launch
– First developed at MIT -- Lincoln Lab under
Military contract
Valley mini-computers
– Boston's Routeegeo312
128Silicon
means
7
Silicon Valley Story
B. Silicon Valley -- Fred Terman and
California Dreaming
1. 1942: California boy sent east to fight WWII in
the labs of MIT (not “halls of Montazuma…”)
2. Hates the cold climate (weather and people)
3. Post war: Heads home, but brings the "MIT
model"
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Silicon Valley Story
4. Convinces Stanford to go one-up
on MIT
– Stanford U. -- Leyland Stanford's old
ranch
 1860s Leyland famous robber
baron/railroad magnate/importer of
Chinese labor/governor of California
– And you thought ENRON "owned"
government!!!
http://www.humanities.uci.edu/histor
y/chssp/GearUp/GearUp.htm
 Bequested his ill-gotten gains to
immortalize self (and John Elway) creates
Stanford U
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Silicon Valley Story
4. Terman Convinces Stanford to go one-up
on MIT
– 1950s Stanford needs use for ranch lands
– Terman suggests -- build an industrial park
 incubator for new IT start-up firms
 builds on "garage" companies of the valley
Stanford
Industrial Park
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http://images.pahistory.org/PAHA/image/301.jpg
Silicon Valley Story
5. The rest is history
– Silicon Valley has/develops all four factors in
abundance
1.
2.
3.
4.
Proximity to Research University(ies)
Infrastructure (R&D)
Climate, Amenities, and Quality of Life (California Dreamin’)
Entrepreneurship -- Critical Mass (Garage Inventors)
http://www.tabsiliconvalley.com/
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http://www.travelnotes.de/california/silicon/landmark/p976.jpg
The garage where HP started
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Silicon Valley Story
5. The rest is history
– Premier IT Growth Pole in the World
– Can't afford a place to sleep? Ride an all night
bus.
Renters [in California] are being forced to be
inventive:
• $250/month in Fontana provides a shed
for a home.
• "Motel
22" is a $3 all-night
bus ride in South Bay.
www.housingadvocates.org
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Research Triangle
C. The Research Triangle -- The South
Shall Rise Again (or carpet baggers
heaven?)
1. 1960 Governor worried by declining Textile
industry
2. Public--Private Partnership
– Textile Executives provide funding
– Government provides services and planning
3. Raleigh -- Durham -- Chapel Hill become
center based on Universities
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Research Triangle
4. Advantages
– Low taxes
– Low wages, non-union
area
– nice climate
5. Only trails Silicon
Valley and Boston as
growth pole in IT
industry
http://www1.american.edu/carmel/ab5293a/Casestudy/Research_Triangle/RTParea.gif
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I. Review Four Factors In
Silicon Valleys’ Success
1. Proximity to Research University
2. Infrastructure
3. Climate, Amenities, and Quality of
Life
4. Entrepreneurship -- Critical Mass
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Can anyone copy this?
 Research Schools can always be built
 Infrastructure can be created through private and
public means
 Amenities are of two types:
– Natural – impossible to create
– Social – might be possible to create
 Entrepreneurship – historically this is only learned
through mentoring, this has prevented the artificial
creation of a “Silicon Valley”
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GROWTH POLE
 “Growth does not appear everywhere at
the same time; it becomes manifest at
points or poles of growth, with variable
intensity; it spreads through different
channels with variable terminal effects
on the whole economy.” Francois Perroux
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GROWTH POLE
 The Silicon Valley is a Growth Pole
 Like lightning striking
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Growth Poles & their impacts:
1. Centers of Technology & Innovation suddenly
appear on the landscape (ex. Silicon Valley)
2. Surrounding region benefits in a distance
decay function (further away less benefit)
3. As original technology ages, Growth Pole
faces crisis
 Can decline (Detroit, Cleveland,...
 Can move on to new technology (Boston:
textiles to computers)
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Silicon Valley
 This development literally came out of the
“garage”
 But might it now be headed for India? Or
elsewhere?
When he was in eighth grade, Steve Jobs, later the cofounder of Apple Computer, telephoned William
Hewlett, president of Hewlett-Packard. "Bill answered,
and I said, 'Hi, you know, uh, I'm 12 years old and I'm
trying to build a frequency counter,' " Jobs recalls.
Hewlett, a symbol of entrepreneurial success in the
Santa Clara Valley, chatted graciously with Jobs for 20
minutes. When it was over, the kid got not only the
Hewlett-Packard parts he needed but a summer job at
the company as well.
http://projects.edtech.sandi.net/lewis/computerhist/applejobs.htm
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http://www.microsoft.com/india/msidc/
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