This site was set up
August 22, 1995
History & Future
|In the beginning was the WORD and the word was... Silicon
Valley. Don Hoefler
is credited with coining the phrase:
||Silicon Valley is the only place on Earth not trying to
figure out how to become Silicon Valley. ~Robert Metcalfe
Silicon Valley was used
occasionally mostly byeasterners who would mention making a trip to
Silicon Valley, until 1971 when it was popularized in a series of
articles, ``Silicon Valley USA,''
written by Don Hoefler for
Electronic News. Quite likely it was the
first time the term was used in
print (Don C. Hoefler, publisher
of Microelectronics News, telephone interview, 9 January 1985) ...
choosing a name for an article about the semiconductor industry that he
was writing for Electronic News.
Ralph Vaerst, then president
of Ion Equipment, suggested
Silicon Valley. Hoefler named his article, ``Silicon
Valley USA;'' it was a series that ran for 3 weeks,
beginning 11 January 1971."
~ Carolyn Tajnai,
1971, in a series of
articles that Hoefler wrote for ELECTRONIC NEWS, a
weekly tabloid, he first used the phrase
"SiliconValley" to describe the
electronics firms mushroomingin Santa Clara
county. "He pioneered the coverage of Silicon Valley as a
distinct community," - said Michael S. Malone,author of a book
chronicling the industry called THE BIG SCORE."When we think of
Silicon Valley as a collection of charactersand eccentrics, he's the
one who put that whole idea in our minds,"- said Malone.
Hoefler began his career in
electronics journalism as a publicist for Fairchild Semiconductor in
Mountain View. He subsequently worked as a reporter for Fairchild
Publications, owner of ELECTRONIC NEWS, and then held editorial
positions with RCA Corp. and with McGrawHill.
Don C. Hoefler died in South
San Francisco on April 15, 1986 at the ageof 63. He was publishing a
weekly newsletter called MICROELECTRONICS NEWS at the time of his
death, following a recent cerebrovascular accident
Datamation ,1986, May 15, by
Cahners Publishing Company
(read more about
Don C. Hoefler).
Why 1971 ?
On November 15, 1971 Intel created the
world's first microprocessor: the
What does Silicon Valley mean geographically?
Silicon Valley is an area that
"located on the San Francisco, California, peninsula, radiates outward
from Stanford University. It is contained by the San Francisco Bay on
the east, the Santa Cruz Mountains on the west, and the Coast Range to
the southeast. At the turn of the century, when fruit orchards
predominated, the area was known as the Valley of Heart's Delight" -
as Carolyn E. Tajnai, former Director (1988 -
Stanford Computer Forum begins
one of her
online-manuscripts that described Silicon Valley history.
to the "Silicon Valley Joint Venture Index 2000
the Silicon Valley's cities were located around the
South side of San Francisco Bay:
10 years later the above viewpoint of Silicon Valley
Joint Venture was changed:
boundaries of Silicon Valley vary. The region's core has been defined as
Santa Clara County plus adjacent parts of San Mateo, Alameda and Santa
Cruz Counties. In order to reflect the geographic expansion of the
region's driving industries and employment, the 2011 Index includes all
of San Mateo County. Silicon Valley is defined as the following cities:
Santa Clara County (all) Campbell, Cupertino, Gilroy, Los Altos, Los
Altos Hills, Los Gatos, Milpitas, Monte Sereno, Morgan Hill, Mountain
View, Palo Alto, San Jose, Santa Clara, Saratoga, Sunnyvale Alameda
County Fremont, Newark, Union City San Mateo County (all) Atherton,
Belmont, Brisbane, Broadmoor, Burlingame, Colma, Daly City, East Palo
Alto, Foster City, Half Moon Bay, Hillsborough, Menlo Park, Millbrae,
Pacifica, Portola Valley, Redwood City, San Bruno, San Carlos, San
Mateo, South San Francisco, Woodside Santa Cruz County Scotts Valley
Santa Clara San Jose Newark Fremont Union City.
The Silicon Valley Joint Venture Index 2011
Silicon Valley Joint Venture
Population: 3 millions; Jobs: 1.3 millions.
Census data for 2010 show median household income
was ... $83,944 for the San Jose region, the epicenter of Silicon
Valley (WSJ, Oct. 19, 2011
), compared with the nationwide median of
Jose Mercury News, Oct. 19, 2011)
Home Prices in the US Leading High
Source: 2011 Silicon Valley
Information and Communications Technologies Study
Source: Joint Venture: Silicon Valley
Silicon Valley jobs: A recurring cycle of boom and bust
By Pete Carey
Over the past 15 years, Silicon Valley has created some of
the world's most successful companies and best-paid workers, while shedding
the jobs and industries it no longer needs. As 2011 begins, the drama of job
creation and destruction continues ... the number of jobs in the valley
today is about the same as in 1995, the year Yahoo was founded and three
years before Google was born. Over the same period, the population has grown
by 20 percent. And, amid the Great Recession, the number of people here who
are unemployed -- hovering around 100,000 for a year and a half -- is the
highest since the state began keeping comparable records in 1990.
(San Jose Mercury News, January 1, 2011)
U.S. Bureau of Labor Statistics,
September 08, 2009.
High-tech employment in Silicon Valley:
Source: Joint Venture: Silicon Valley
The percentage of Asian tech workers grew from 39 percent in
2000 to just more than 50 percent in 2010 .... At the same time, white workers saw their more than 50
percent majority of tech jobs in 2000 fall to nearly 41 percent ... African-American and Hispanic tech
workers each saw slight decreases: Positions held by African-American tech
workers fell from 2.8 percent to 2.3 percent; those held by Hispanic workers
dropped from 4.6 percent to 4.2 percent.
By Dan Nakaso,
San Jose Mercury
Data sources: Census
Data Source: U.S. Bureau of Labor Statistics, Population Survey
Where is located the Silicon Valley of India?
Some people suggest that
the Silicon Valley of India is a nickname of the Indian city of
That's correct but not substantially, because main part of India's Silicon
Valley located in the
San Francisco Bay Area.
Of the total number of engineers and scientists in the [San Francisco Bay
Area] valley, 28 percent comes from India, up from 20 percent a decade ago
(Statistics offer glimpses into how Silicon Valley lives.
By Scott Herhold, San Jose Mercury News.
Three years later the following - more detailed comparison - data were published:
Source: How Indians defied gravity and achieved success in Silicon Valley by October 15, 2012
The process of transforming San Francisco Bay Area
to the India's Silicon Valley will continue for lot of different reasons
including the following - significantly more
English speaking IT engineers graduates in the India than in any other
Four-Year Bachelor's Degrees in
Engineering, Computer Science, and Information Technology Awarded from
1999 to 2004 in the United States vs. India,
Indians have founded more engineering and
technology companies [in US] during that past decade than immigrants
from Britain, China, Taiwan, and Japan combined.
Where the Engineers Are.
By Vivek Wadhwa, Gary Gereffi, Ben Rissing, Ryan Ong. University of
Texas at Dallas
Government aims to create 28 Million Jobs In Electronics By 2020. For
comparison, there are a total of 5.75 million workers in the U.S. high-tech
U.S. High-Tech Jobs Down Again in 2010 By Brian Heaton, October 5,
US ends India tech restrictions. Wharton Aerospace &
Defense Report, February 04, 2011
PricewaterhouseCoopers data show that Silicon Valley took 40% of venture funding in 2012:
Source: PricewaterhouseCoopers &
National Venture Capital Association
According to the
PricewaterhouseCoopers & National Venture Capital Association 2010
Report, Silicon Valley attracted 40 percent
of total US venture capital dollars and 30 percent of total US deals. New
England was a distant second at 11 percent of total US funding and 12
percent of total deals:
National Venture Capital Association
Source: Joint Venture: Silicon Valley
(Each city listed includes
Highest Patent Producing Metro areas
Data sources: Brookings
Institution analysis as it was quoted by
Mike Cassidy at
"Silicon Valley won't remain the country's patent leader without
sensible immigration and education action"
Patent and Trademark Office
Silicon Valley Top Companies:
Regis McKenna: ' About every 10 years there
is a new industry that arises here in Silicon Valley. Of the top 15
companies [in the region], 12 of those companies were formed in the past
15 years, they generate $600 billion of revenues, and employ about
three-quarters of the people in Silicon Valley, and they were all
entrepreneurial companies 15 years ago. So we continue to see this sort
of churning and creating of new industries.'
San Jose Mercury News, 2011 Silicon
Valley 150 listings.
Silicon Valley Top 5 Companies by R&D
Source: 2011 Silicon Valley
Information and Communications Technologies Study
Source: "Education and Tech Entrepreneurship" by Vivek Wadhwa, Richard Freeman, Ben Rissing.
Ewing Marion Kauffman Foundation, 2008
About 60 years ago,
University had some financial problems. The authorities of university tried to
these problems by leasing part of the university land to high-tech companies for 99 years.
Carolyn Tajnai clarified this point of
Stanford's history in more detail:
' In the 1950's, the idea of building
an industrial park arose. The university had plenty of land over 8,000 acres....but money
was needed to finance the University's rapid postwar growth. The original bequest of his
farm by Leland Stanford prohibited the sale of this land, but there was nothing to prevent
its being leased. It turned out that long-term leases were just as attractive to industry
as out right ownership; thus, the Stanford Industrial Park was founded. The goal was to
create a center of high technology close to a cooperative university. It was a stroke of
genius , and Terman, calling it ``our secret weapon,'' quickly suggested
that leases be limited to high technology companies that might be
benspanananficial to Stanford. In 1951 Varian Associates signed a lease, and in
1953 the company moved into the first building in the park. Eastman
Kodak, General Electric, Preformed Line Products, Admiral Corporation,
Shockley Transistor Laboratory of Beckman Instruments, Lockheed,
Hewlett-Packard, and others followed soon after.'
The father of
Silicon Valley by Carolyn Tajnai, 1995
Varian Associates it was a
|'Gradually, facilities were
moved from leased quarters in San Carlos to a quiet corner of Stanford land, thus creating
what is today the Company's headquarters site, and incidentally bringingi nto being the
Stanford Industrial Park - the most successful complex of its kind in the
world.' Source: Varian Associates: An Early History
The First building of
Associates building, Stanford Industrial Park, Palo Alto, California, 1953. Source:
'Russell and Sigurd Varian - The Inventor and The Pilot', by Dorothy
Varian. Palo Alto, 1983, p.258.
The picture is reproduced here
with Varian Associates permission since 1995.
|Is it a reasonable doubt or ... just
invitation to the further discussion?
the different organizations that were instrumental in the process of creating Silicon
Valley the significant role was the Stanford Research Institute (SRI):
After World War II, a great
industrial push was under way to reinvigorate the economy. Founded by a small group of
business executives in conjunction with Stanford University, Stanford Research Institute
(our founding name) was created in 1946 as a West Coast center of innovation to support
economic development in the region. The world's first digital computer (ENIAC, weighing in
at 30 tons) was introduced, and in what is now known as Silicon Valley a three-bedroom
home sold for $10,000. Source: SRI Timeline
it was just one of the reasons why at least some of SRI people appeared to be
very skeptical about the above photo of Silicon Valley's building #1. Alice
Resnick Senior Director, Corporate and Marketing Communications SRI International
wrote to us concerning this subject
31 Jan 2002 14:41:03 -0800:
For example, SRI had a building in Menlo Park (one that we still
occupy) in 1947, several years before what you call the 'The First building of
Silicon Valley: First Varian Associates building, Stanford Industrial Park, Palo Alto,
California, 1953' on your web page at http://netvalley.com/.
1995 William Hewlett decided to described in more details his own concept of Silicon
of Silicon Valley:
What does it mean?
'...in June, 1995, I had lunch at the Stanford Park Hotel and while leaving,
I noticed a man holding a cane and sitting on a bench as though waiting for someone. I
walked on by and then stopped, turned around, and walked back. I said,
'Are you Mr.
Hewlett?', and he replied, 'Yes'. I thanked him for his kindness in
verifying information for me when I was writing my paper on 'Fred Terman, The Father
of Silicon Valley.'He said 'But Fred Terman didn't start Silicon Valley; the
beginning of Silicon Valley was a supernova.' He asked if I
knew what a supernova was and I said yes, that it was an explosion of a
large star. Mr. Hewlett spoke so softly that it was difficult to catch every word, but he
proceeded to explain that a supernova caused a rippling effect that set the stage for
future events. He explained that Lee de Forest, who was an electronics
pioneer in the Palo Alto area in the early part of the Century, and his work were the
supernova'. (c) Carolyn Tajnai, 1995
Hewlett, center, with his partner David Packard, left, and
former Provost Frederick Terman, who inspired the two graduate students
to follow their dream of starting an electronics company. Hewlett and Packard honored
their mentor by funding construction of the Terman Engineering Building, dedicated in
1952. (Source: Stanford News Service)
||Moving to California in
Le De Forest ( photo above -- De Forest, Palo Alto, 1915 )
worked for Federal Telegraph Company at Palo Alto. While there, de
Forest finally made his Audion tube perform as an amplifier and sold it to the telephone
company as an amplifier of transcontinental wired phone calls. For this innovation he
received $50,000. By the beginning of 1916, he had finally perfected his Audion for its
most important task, that of an oscillator for the radiotelephone transmitter. By late
1916 de Forest had begun a series of experimental broadcasts from the Columbia Phonograph
Laboratories on 38th Street, using for one of the very first times his Audion as a
transmitter of radio: According to de Forest, 'The radio telephone
equipment consists of two large Oscillion tubes, used as generators
of the high frequency current.'' Source: Le De Forest bio.
Photo left: Lee De Forest's first Triode or 'Audion', 1906
According to Rogers and
Larsen, in 1912 'de Forest and two fellow researchers for the Federal Telegraph
Company, an early electronics firm, leaned over a table watching a housefly walk across a
sheet of paper. They heard the fly's foot steps amplified 120 times, so that each step
sounded like marching boots. This event was the first time that a vacuum tube had
amplified a signal; it marked the birth of electronics and opened the door for the
development of radio, television, radar, tape recorders, and computers.' Also Rogers
and Larsen add that,'Lee de Forest had a Stanford University
connection; his work was partly financed by Stanford officials and faculty.'
Stanford University and Industry, by Carolyn Tajnai, 1995
of the Silicon Valley:
Can we really see it ?
According to astrophysicist Joseph
Shklovski (lectures, 1981) the total level of energy produced by human civilization during
the last 300 years of industrial revolutions, is still about one hundredth of a percent of
the total energy flow that reaches the surface of the earth from the sun. Meanwhile in
recent decades of info-tech revolution, the total level of energy that earth eradiates to
space comes to a million times more than it would have done naturally as the planet heated
to 300 K. From this point, for the last couple of decades, Earth outran planet-giants
Jupiter and Saturn and became comparable to Sun. So, for a radio-telescope's observer from
outer space, the earth's info-tech revolution looks like the birth of a new bright star on
the cold Earth-planet.
Information Resources', by
Gregory Gromov, Nauka, 1984,
Unfortunately, much of the rest of the world would love to be like Silicon Valley. In one subgenre of the Valley success-myth article, a journalist visits the high-tech heart of a foreign country and asks,
'Does this self-styled Silicon
Glen/Alley/Gulch/Fjord/Pampas/Polder/Fen have what it takes to match
the success of the original?'
Precisely because the Valley possesses the Renaissance qualities of being dynamic, entrepreneurial, innovative and wildly financially successful, it has become a model the rest of the world is keen to follow. But if what's being emulated places little value in old ideas of culture and has little interest in developing new ones, aren't we all aspiring to a debased ideal -- to an impoverished kind of Renaissance, devoid of much that makes life rich? Florence had entrepreneurial energy, education, ambition and technology; it also attracted Giotto, Donatello, Dante, Michelangelo, Brunelleschi, Petrarch and others besides. Who can Silicon Valley point to?
If the Valley wants to find a way out of the binary thinking that opposes business success and high culture, it only has to look to Renaissance Florence for help. In his
'The Building of Renaissance Florence,' historian Richard A. Goldthwaite -- in an economic analysis rigorous enough to warm the heart of any Valley CFO -- considered the Florentine approach of building for prestige, history and art's sake and reckoned its worth to the city's economy. The building of the great architectural monuments of Renaissance Florence, he concludes,
'resulted in considerable internal development and, ultimately, a
more mature economy...'RENAISSANCE GEEKS by Simon Firth, Salon.com, 2000.
us take a look again on the live example. Astronomy Ph.D. Frank Levinson
entered optics tech 1980 with Bell Labs. Left 1988 to start Finisar fiber optics -- high
speed networking company -- with $60,000. According to the Forbes magazine
Finisar worth $8 billion in 2000. Frank clarifies below his personal viewpoint on the
nature of Silicon Valley
Despite its many contributions to the world economy, the technical community here in
Silicon Valley is actually much smaller than most people believe. People end up making
connections in strange ways and often these ties last for many years... My wife Wynnette
and I went to dinner at the Flea Street Cafe in Menlo Park recently with a small group to
hear a presentation on saving endangered species of domesticated animals such as the
Cotswold Lamb. This farm and the organization that supports it was started by Robyn Shotwell Metcalfe...Robyn's husband is
Bob Metcalfe, one of the two
inventors of Ethernet. Bob and Dave Boggs invented Ethernet when they were scientists at
Xerox Palo Alto Research Center (PARC) in the 1970s.
|Ethernet is also a huge factor in Finisar's
past successes, as well as our future growth prospects. Bob went on to be the founder of
3Com, then to work as an insightful and articulate columnist for InfoWorld magazine. He
recently became a venture capitalist with Polaris Ventures. Bob is witty, engaging, way
smart, funny and an especially good writer. He is a technologist's techie.
Dave Boggs (the other
inventor) was also at the Flea Street Cafe dinner with us. Currently, Dave is
working on optical extensions for networks in the metropolitan area. He has steeped
himself in the technology of networking since the 1970s. Another dinner guest was
Crane. Ron was a key technical contributor for 3Com from the very beginning of
Ethernet. All of today's Ethernet adapter
cards installed in the tens of millions of PCs throughout the world are related to the
first adapter cards built and tested by Ron, who is still very well connected in the
You might think that I was invited to attend this dinner because Finisar is a major
participant in the Ethernet industry through its Gigabit Ethernet transceivers and other
Ethernet modules and because of a professional association I have with Bob. But
that's not the reason we were there.
We were invited to this dinner because my cat-loving daughter Alana attended preschool in
the late 1980s with Julia Metcalfe, daughter of Robyn and Bob. My wife Wynnette and Robyn
also became friends and have stayed in touch. At the time our daughters first met, Bob was
already an industry icon and I had to use my wife's and daughter's friendships
to wedge my way in with the Silicon Valley geniuses behind Ethernet.
Bob and Robyn really liked Wynnette and Alana (and eventually me,
too!), so our family would often be invited to their social occasions. During those times
I would listen carefully for pearls of wisdom on how Finisar could grow and make its mark
on the world.
One evening years ago, Bob and I talked about Finisar's early product line and he
pointed out that since we were not supporting established standards, our appeal to the
industry was being limited. Over the next few years Finisar changed our direction in line
with Bob's counsel and this was a major factor in Finisar's growth during the second
half of the 1990s.
As Paul Harvey would say, now you know the rest of the story!
||A Tale of Lambs, Preschoolers and
Networking, by Frank Levinson, 2001
Steve Jobs Three IT Revolutions
World Wide Web:
1990, Berners-Lee had set up a Next computer - an easy-to-program,
Unix-based black cube that was the
brainchild of Steve Jobs - as the world's first Web server.
Using NeXT's object-oriented technology, the
first Web server and client machines were built by CERN -- the European
Laboratory for Particle Physics in November 1990. Since then the Web has
truly encompassed the globe and access has proliferated across all computer
platforms in both the corporate and home markets.
The most important
Googler you've never heard of
... Google started in Susan Wojcicki's
Thirteen years ago, the then-tiny company's former landlord became its 16th
employee and first marketing manager [She then
married to Google executive Dennis Troper and introduced a future husband to
her younger sister Anne, who married Brin
] Today, she is one of its 12 senior vice presidents, although by one
measure she is first among equals: The advertising products [AdWords
and AdSense, Analytics and DoubleClick, ... ] she oversees
accounted for about 96 percent of Google's revenues in 2010. By
Susan and her house that helped build Google
If some of the other companies rented Susan Wojcicki's garage,
will it be in the list of Top 10?
||Royal Dutch Shell
Ranking of Dec 10, 2012
Google 3G: why Bing more
useful to Google than to Microsoft
By Gregory Gromov.
Yahoo switched to Bing-powered
search results in August 2010. Shortly thereafter, search specialists at
Google began noticing that many of the results for Yahoo! searches were
the same as those Google searches of the same terms.
Google engineers set up random results on their site for a series of
unlikely search terms, such as 'hiybbprqag.' (Google arranged for the
nonsense word to point to a Los Angeles theater seating plan on its
search engine.) 'Within a couple weeks of starting this experiment, our
inserted results started appearing in Bing,' Google said in a statement
on its official blog ...
' Google: Sting proves Bing copied search results' By the CNN Wire Staff
Google published the search experts' findings, their colleagues at Microsoft
only shrugged, essentially saying that such things happen, that it was no
big deal. However, they immediately stopped copying Google's results. Yahoo!
somehow skirted the debate altogether.
However, it was not until
later that the most interesting part of the story emerged. At the outset,
Google's experts were very vocal in complaining about the abovementioned
results. They then did an abrupt about-face, apparently accepting
Microsoft's explanation. As if on a signal, all the once-spirited grumbling
ceased. Both sides suddenly stopped discussing the story.
for this is that with the search engine market so out of balance, Google
really needs at least a nominal competitor in the business. In other words,
if Bing spontaneously combusted tomorrow - if, for example, Microsoft
decided that there was no further need to pursue the already long-lost race
for search engine dominance - this would in fact be a great blow to Google.
Google would then be completely vulnerable to accusations of having a
monopoly on the US search engine market, and would quickly become the next
subject of the Department of Justice's anti-trust investigations. Conjoined
twins Yahoo and Bing hold second and third places in the search engine
market, protecting Google from allegations of monopoly, and making
Bing more useful to Google than to Microsoft.
Versus Route 128 by Annalee Saxenian
Silicon Valley has a regional-network-based industrial system -- that is,
it promotes collective learning and flexible adjustment among
companies that make specialty products within a broad range of related
technologies. The region's dense social networks and open labor market
encourage entrepreneurship and experimentation. Companies compete intensely
while learning from one another about changing markets and technologies
through informal communication and collaboration. In a network-based system,
the organizational boundaries within companies are porous, as are the
boundaries between companies themselves and between companies and local
institutions such as trade associations and universities.
The Route 128 region is dominated by a small number of relatively
vertically integrated corporations. Its industrial system is based on
independent companies that keep largely to themselves. Secrecy and corporate
loyalty govern relations between companies and their customers, suppliers,
and competitors, reinforcing a regional culture that encourages stability
and self-reliance. Corporate hierarchies ensure that authority remains
centralized, and information tends to flow vertically. The boundaries
between and within companies, and between companies and local institutions,
thus remain distinct in the independent-company-based system.
The performance of Silicon Valley and Route 128 in the past few decades
provides insights into regional sources of competitiveness. Far from being
isolated from what's outside them, companies are embedded in a social and
institutional setting -- an industrial system -- that shapes, and is shaped
by, their strategies and structures.
Understanding regional economies as industrial systems rather than as
clusters of producers, and thinking of Silicon Valley and Route 128 as
examples of the two models of industrial systems -- the
regional-network-based system and the independent-company-based system --
illuminate the different fates of the two economies... (read
Silicon Valley and
Route 128 by Paul Mackun
Job mobility statistics show the extent of success of these networks: the
average turnover rate for small-to medium sized firms was 35% and the
average job tenure (in the 1980s) was approximately two years (Saxenian
1994). Geography probably played as critical role in this rate as the
informal social contacts. The spatial concentration of a large number of
technology-based firms enabled people to change employers without altering
other aspects of their lives. When a person left one firm in Palo Alto for
another, there was no need to move one's residence or take one's kids out of
a particular school district to enter a different firm. The attitude of the
Valley served as a catalyst for this risk-taking. In many cases, a small
coterie of employees in a firm dissatisfied with their current place of
employment would gather together after work to tinker around with some of
their own ideas. They would then develop a business plan, acquire funds from
venture capitalists, and seek advice from local academic sources. If they
succeeded they were heroes. If they failed, many employers were located in
the same town or in a neighboring community (Saxenian 1994).
As people in the region became occupationally mobile, their roles became
interchangeable: employers become employees and co-workers can become
competitors. The result is that the engineers developed strong loyalties to
technology and their fellow engineers and scientists while possessing far
less allegiance to a single firm (Saxenian 1994). Although it may seem
paradoxical that such cooperation would occur under such obviously
competitive circumstances, Saxenian (1994) notes the motto of the region: '
competition demands continuous innovation, which in turn requires
cooperation among firms.' Rapid flows of practical information became the
currency of choice. Applied scientific research was constantly reworked to
develop market goods. It is not surprising that rapid changes led to
industrial diversification and contributed to the flexibility and resilience
of the economic region (Saxenian 1994). The lack of rigid hierarchies
extended to the firms themselves. The traditional delineations between
employers and employees were not so sharp as on the East Coast, and in some
cases they disappeared entirely. Beginning with Hewlett and Packard, many of
the Silicon Valley companies sought a much more interactive environment
between employers and employees. Decentralization of powers followed: major
divisions of firms were given a large amount of autonomy (Saxenian 1994).
'In short, Silicon Valley has a regional-based industrial system -- that
is, it promotes collective learning and flexible adjustment among companies
that make specialty products within a broad range of related technologies.
The region's dense social networks and relatively open labor markets
encourage entrepreneurship and experimentation' (Saxenian 1994) ...
The Birth of Silicon Valley: by Carolyne
... to the early 1930's during the Great Depression. Santa Clara County,
California, known as the Valley of Heart's Delight, was a tranquil expanse of
apricot, plum, and cherry orchards. Professor Frederick Terman of Stanford
University's Department of Electrical Engineering enjoyed the tranquillity, but
he was concerned with the great lack of opportunities for Stanford Engineering
graduates to find jobs in the area. His graduates had to go 3000 miles to the
east coast because there were few jobs for them locally. He began to encourage
some of his students to start companies near the university... (read
How I ended up working for a big corporation
In short, knocking on the doors of some monolithic corporation to see if I
could get hired by big shots - such a notion never even crossed my mind.
Furthermore, I hadn't come all the way to California just to sit in some
cubicle. Ever since early 80th when I began writing my first book on trends in
IT, I had been interested in studying the basic stages by which these
startup companies developed. Not startup companies in general, but
specifically those in Silicon Valley. As soon as I had the opportunity, in
the mid-1990s, I went for it.
In the beginning, like everyone else there, I went through the agony of
starting my own company from scratch, even though I had almost no hope of
making it big. This experience, as it turned out, was very useful in a
variety of ways ...
After that-again, like many others-I threw in my lot with the "independent
This was the right approach. You'd get contracts for two or three months to
a year at a time, working for some of the newest startup companies around.
I experienced every aspect of their early development, from the birth of an
idea to its market debut, to the collapse of the business, or, if it so
happened, to the next round of funding. I saw it all up
close and, most importantly, was able to study my subject from the inside.
Somewhere in my second dozen or so such
contracts, I was the first employee to be
hired "off the street" for a new startup,
the latest in a series of ventures for its
founders ... (read
How Silicon Valley Came To
Gold Mines of El Dorado to the 'Golden'
Startups of Silicon Valley
by Gregory Gromov
Why was the law that enabled Silicon Valley's successful development passed all
the way back in 1872 and only in the state of California?
Main Difference of the Legal Framework of Silicon Valley
Which of the main historical features of Silicon Valley has been instrumental
in its development? There have long been discussions on this subject and very
different points of view have been expressed. Many believe the main reason is
the unique features of Stanford University. Others point out that the Valley is
an exceptionally favorable place to live on the Pacific coast and therefore any
researcher, engineer or programmer who comes there for some reason is not
usually willing to leave.
Finally, those who actually have an interest in seeing that the research park
created somewhere with their participation would obtain adequate government
funding usually pay attention first and foremost to the fact that the starting
period for the formation of Silicon Valley occurred during the period of one of
the peaks of the "Cold War," when high-tech enterprises benefited from the
"windfall" of defense programs.
Of course, each in its own way is correct, as well as all of them together.
The valley provides an exceptionally comfortable place to live, the climate is
wonderful and the university is remarkable in all respects. Hardly anyone would
dare to deny the well-known fact of the growth in military spending during the
"Cold War" period. However, it is most likely that none of the aforementioned
facts, as well as any combination of them, are and ever have been so very unique
to just one state in America to explain why just one California research park in
the entire country would eventually become Silicon Valley
Let's then formulate the question more specifically for the present day -
which of the differences of Silicon Valley is currently the most obvious? The
answer to this question of course is known to everyone - the characteristic
difference of Silicon Valley is that here you have world's fastest paced
unstoppable introduction of scientific and technological innovations.
Hence, it raises the following question: What was California's totally unique
characteristic "component" of the local socio-economic climate, which became the
"catalyst" for the process of development of technical ideas that arose here
(or were imported here) at the first attempts at their formulation by inventors
to market the product?
With this catalyst of scientific and technological process acting locally in
just one American state, a very special law was enacted in California in 1872...
Upon Silicon Valley’s rise, this 1872 law
ended nearly a century of obsolescence to
acquire crucial significance in California,
although in a significantly different
context than that in which it had originally
been written. It quickly turned out to be
the most effective catalyst for the research
technology rush that steadily, year by year,
turned Stanford’s technology park into such
a unique hotspot for high technology
development in the United States
Shockley touches off the chain
reaction leading to Silicon Valley’s
In the early 1950s, the industrial park
on land adjacent to Stanford University in
California was one of many such parks in the
country and was far from being the most
The spark that set off the explosive boom
of “Silicon startups” in Stanford Industrial
Park was a personal dispute in 1957 between
employees of Shockley Semiconductor and the
company’s namesake and founder, Nobel
laureate and co-inventor of the transistor
As is likely true for the majority of
outstanding scientists, Shockley was not
known for his easygoing nature. As a result
of this ordinary “production disagreement”,
eight of his leading employees decided to
quit to form their own firm, in direct
competition with Shockley.
Shockley had only just formed his company
“from scratch” a year earlier by hiring top
performers from various universities, and
this mutinous group of his former “students”
formed Fairchild Semiconductor immediately
following their departure, having received a
USD 1.5 million investment from the New York
company Fairchild Camera and Instrument.
After several years, Fairchild gained its
footing, becoming a formidable presence in
this sector. Its founders began to leave to
start companies based on their own, latest
ideas and were followed on this path by
their own former leading employees. Thus,
these generations of Silicon Valley’s
latter-day pioneers are called “Fairchildren”.
Then began a sort of “nuclear fission” in
personnel, where another crop of companies
formed around the Fairchildren, and those
leaving invited their coworkers along, who
then went on to do the same...
The process gained momentum and what had
once began in a Stanford’s research park
became a veritable startup avalanche...
One of the most well-known of startups
appeared in the earliest stages of this
chain reaction. Gordon Moore and Robert
Noyce, two of Shockley’s “Traitorous Eight”,
left Fairchild Semiconductor to form Intel.
Thus, over the course of just 20 years, a
mere eight of Shockley’s former employees
gave forth 65 new enterprises, which then
went on to do the same. The process is still
The 92 public companies that can
be traced back to Fairchild are now
worth about $2.1 trillion, which is
more than the annual GDP of Canada,
India, or Spain.
The First Trillion-Dollar Startup
By Rhett Morris
UThe aforementioned “personal conflict”
at Shockley Semiconductor can be found at
the center of practically any study of the
history of Silicon Valley. It is surprising
that these histories fail to note that it
was only in California that this conflict—a
perfectly ordinary disagreement, easily
found in any industrial park all across
America—inspired this unique chain reaction
and gave rise to the next generation of
startups, who then went on to divide and
reproduce, and so on in this sort of nuclear
We again take up this question,
critically important as it is in
understanding the reasons that only
California’s Silicon Valley hosted such a
boom. Can it be that there had never been a
personal flare-up of this kind, or even on a
much greater scale, in all the other high
tech companies, long-established in various
industrial parks around the country?
Why was Stanford’s Research Park only
host to Silicon Valley’s growth and
Conflicts between creative teams and
their veteran leadership were of course
common in all American industrial parks,
both before and after the aforementioned
disagreement at Shockley. However, the crux
of the matter is that, with the exception of
California, all across America there are
many different agreements signed between
business owners and their employees that
restrict the employee’s right to quit and
join competing firms or, even worse, go on
to create his or her own company in direct
competition with their former employer.
These non-compete agreements, which new
recruits are required to sign (generally in
the form of NCAs or NCA & NDAs) play the
role of graphite rods in a nuclear reactor,
slowing the chain reaction of creation of
new startups all over America.
Thus it was that these decelerators in
the process of creating companies to compete
with the industry’s established figures were
legally withdrawn from the nuclear reactor
of innovations in what would many years
later become Stanford Research Park.
As was noted earlier, it was in
California (and only in California) that a
particular law emerged in 1872 that defended
the employee’s freedom of movement, the
right to leave his or her employer at any
moment, even to immediately go to work in
direct competition with their former
employer or to create a competing firm on
Timeline of events in the 100 years
leading to Silicon Valley’s creation
1848—The first year of the Gold Rush. All
over the world spread rumors of fabulous
gold reserves discovered on the west coast
of North America. Gold was discovered in El
Dorado County, not far from Sacramento, the
current state capital of California, and “El
Dorado” entered the vocabulary of
treasure-seekers around the world.
1849—The first tens of thousands of the
more adventurous of gold-seekers from all
over America arrive in California, in what
was at that time still a territory of
Mexico. Not counting the Native Americans,
only about 2000 Americans lived there at the
time... Thus, the first tens of thousands of
California gold seekers went down in history
as the “Forty-niners”.
1850—California gains statehood, becomes
known as "The Golden State” ( California is
also known variously as The Land of Milk and
Honey, The El Dorado State, and The Grape
1853—The number of new arrivals to
California exceeds 300 thousand people...
1872—As a result of the state’s
experience during the regulation of the more
violent of business disagreements during the
first two decades of the state’s existence
(as noted earlier, this experience was
accrued particularly quickly in the first
days of the Gold Rush, when the groundwork
was laid for California’s government) the
California Civil Code was adopted, in which
the state’s lawmakers included a special
provision guaranteeing the freedom of
employees in the state of California to
choose their own place of work.
1891—Stanford University is founded by
former governor of California Leland
1910 — Lee de Forest arrives in San
Francisco Bay Area. He was by then already
well-known as the inventor of the triode (US
Patent 879532, February 1908). Of all the
influential inventions in the development of
electronics and radio technology in the
first half of the 20th century, the triode
turned out to be the most critical component
in the development of transcontinental
telephone communications, radio, television,
radar and early digital electronics.
Lee De Forest,
Palo Alto, 1915
Lee de Forest’s arrival in what would
later become Silicon Valley began the
process of transformation that turned this
area into one of the world’s central
confluences of talent and professional
knowledge in electronics. A couple of years
later Silicon Valley’s development got its
first big boost from a series of important
defense contracts related to World War I,
reaching critical mass 40 years later, in
the first decade following World War II.
1951—Stanford Industrial Park is
established as a high tech center by
businesses working in close partnership with
the university. Among the first companies to
rent space in the Park were Varian
Associates, General Electric, and Eastman
1956—William Shockley, co-inventor of the
semiconductor triode arrived in San
Francisco Bay Area and founds Shockley
Semiconductor as a division of Beckman
Instruments in Mountain View. On the road to
Silicon Valley’s development, the baton was
thus passed from Lee de Forest, inventor of
the vacuum tube triode, to Shockley,
inventor of the solid-state triode -
The Nobel Prize in
Physics 1956 was awarded jointly to
William Bradford Shockley, John
Bardeen and Walter Houser Brattain
"for their researches on
semiconductors and their discovery
of the transistor effect".
1957—The “Traitorous Eight” leave
Shockley Semiconductor to found Fairchild
founders, clockwise from far left:
1968—Gordon Moore and Robert Noyce leave
Fairchild Semiconductor to found Intel.
1971 - Intel
world's first microprocessor: the Intel
term 'Silicon Valley' by the
1872 Law’s Weight in Gold
The amount of gold extracted per year
during the Gold Rush amounted to 80 million
of that period’s dollars, worth about $2
billion in today’s money.
It might be possible to compare this
figure with the “gold mines” discovered by
the companies operating in Silicon Valley,
which were able to expand on the first
generation of startups only by provision of
this 1872 law.
For example, the New York Times described
gold-rushing pioneer Apple Computer’s
financial impact as “the iPhone Gold Rush”.
Apple's sales in 2010 were valued at around
60 billion USD.
One might also take into account the
“gold” extracted by Intel, which—like many
other Silicon Valley startups—would not have
got its start had not the 19th century
California Gold Rush given rise to the
aforementioned 1872 law. Intel’s patented
“silicon gold mine” produced about 40
billion dollars of sales this year.
This modern-day gold extraction, legally
speaking a direct result of a law dating
back to the California Gold Rush 100 years
previous, has brought financial gain on the
order of hundreds of billions of dollars,
earned by tens of thousands of high tech
companies in Silicon Valley, all mining the
seemingly bottomless gold reserves of
NDA Experiment Set up by Mark Hurd
by Gregory Gromov
... even in those rare cases when the
company employee signs an NDA [non-disclosure
agreement] in exchange for a persuasive
large monetary reward - even in this case -
an employer cannot, under the conditions of
the state of California, create legal
barriers to an employee leaving to work for
his employer's competition... (read
"Ten Commandments" for Start up Founders
The Secret History of Silicon Valley
by Steven Blank
They said it:
The future cannot be predicted, but futures
can be invented by
Dennis Gabor, Pelican Books, 1964, p.
The best way to predict the
future is to invent it ~ Alan
Kay (Xerox PARC).
InfoWorld, 1982 April 26, Volume 4, Number
Below, please find a couple of examples:
and Entrepreneur -- Mark Zuckenberg.
Apple: Co-inventors -- Steve Jobs and Steve Vosniak; Entrepreneur -- Steve Jobs.
Netscape: Inventor - Mark Andreessen, Entrepreneur -- Jim Clark
to download a mobile friendly PDF version of this
History. Permission is granted for use of
this "Silicon Valley History" for educational,
non-commercial purposes as long
as it remains unmodified and
source is acknowledged. For all other uses, please
contact the author first.
Copyright @ 1995 - 2014, netvalley.com
The Roads and Crossroads
of Internet History
By Gregory Gromov
Internet Before World Wide Web
The First 130 Years: Atlantic cable, Sputnick,
ARPANET,"Information Superhighway", ...
Wide Web as a Side Effect of Particle Physics Experiments.
World Wide Web was born in CERN ...
Crossroad of World Wide Web History
World Wide Web as a NextStep of PC Revolution ... from Steven P.
Jobs to Tim Berners-Lee
of the World Wide Web, Browser Wars, ...
Tim Berners-Lee, R. Cailliau, Marc Andreessen, Browser Wars, ...
History of Hypertext
Hypertext Foundation of the World Wide Web: Vannevar Bush's
hyperlink concept, Ted Nelson coins the word Hypertext, ...
"Living History" of Hypertext.
Hypertext Saga of Theodor Holm Nelson: The Fate of Thinking
Person in Silicon Valley ...
The Nelson's Xanadu Plan to build a better World Wide Web
Growth of the Internet: Statistics
Statistics of the Internet & World Wide Web: Hosts, Domains,
WebSites, Traffic, ...
What is the nature of World Wide Web?
Prehistory of the Internet
Ancient Roads of the Telecommunications & Computers
said it ...
People Wrote About This Book
History of the Internet. We
all need it. We all want it. But how did it happen
in the first place? Gregory Gromov provides a ... comprehensive ...
history of the Worldwide Web before it was the Net we all know and
love. By Matthew Holt.
For a history of the
Internet readers should consult Gregory Gromov's The Roads and
Crossroads of the Internet's History. Humanities Computing Unit of Oxford
The Roads and Crossroads of the Internet's
History. By Gregory R. Gromov. A critically acclaimed site for a
comprehensive history of the Internet.
The University of
Texas, System Digital Library.
provides an impressionistic overview in 'The Roads and Crossroads of
Internet's History,' ... with a particular concentration on the
development of hypertext and the Web.
Current literature of the online
community by Eron Main, Faculty of Information Studies,
University of Toronto, Canada
The Roads and
Crossroads of Internet History by Gregory Gromov ... can be a great
resource where an informed ‘Net surfer can come and let hypertext do
the walking and the inventors of the ‘Net themselves do the talking.
by Kelly Ward, Public
University of California, Berkeley
Gregory R. Gromov's The Roads and
Crossroads of Internet History is probably the history that most
students will enjoy as it is sprinkled liberally with files that
illustrate his points.
Commencing with Internet pre-history work your way through 9
sections to read about the web, browser wars, and Xanadu to name a
few topics. It is a long essay but extremely interesting.
The Australian National University.
... This is a hypertext
... It is written as a kind of mosaic rather than as a straight
narrative, including email questions and answers, fragments of
interviews, and the like. It focuses primarily on the Web and
hypertext over the Internet.
by M. C. Morgan College of
Arts and Letters,
Bemidji State University, MN,
This is an entertaining (if
potentially confusing) account of Net history, part of a large
on-line hyperbook ... this site will provide some
fascinating insights and connections between events and
Open Learning Agency :
learning resources to support the K-12 education system in British
The Roads and
Crossroads of Internet 's History by Gregory R. Gromov... is an
excellent history of the internet and a good example of a 'web
document.' ... You also should experience what 'hypertext' is and
why this experience is more like exploring than reading...
Melczarek Introduction for EDU 606 School of
University, Dothan. USA
and Crossroads of Internet History - Gregory Gromov's comprehensive and
fascinating overview of the philosophy and history of the
Cource STS 3700B 6.0:
'History of Computing and Information
Luigi M Bianchi. School of Analitical Studies & Information
Technology. Science and
York University, Canada
Finally, an entertaining and eye-catching
approach to Internet history is Gregory R. Gromov's History of
Internet and WWW: The Roads and Crossroads of Internet History. This
site is worth visiting, as much for its unorthodox approach using
dazzling visuals and hypertext style as its content. By
Deborah Husted Koshinsky and Rick
McRae, University Libraries
State University of New York at
The Roads and Crossroads of Internet History by
Gregory Gromov ... possibly not the first place in the
pool where a non-swimmer should take the plunge, this colorful and
quirky site can be a great resource where an informed ‘Net surfer
can come and let hypertext do the walking and the inventors of the
‘Net themselves do the talking.
'Nettalk : A Brief History of the
'Net' by Kelly Ward
The Bulletin. Special Libraries
Association, San Francisco Bay region. The
School of Information Management and Systems (SIMS) -- a
graduate program at the University of California,
This is one of the Great
Classic Websites. It's a history of the Internet and what led up
to it, told in hypertext, both eloquently and chaotically, as
strange in its own way as the Mel Brooks movie, History of the
World, Part One. But it's one [REDACTED} of a lot more accurate than
the Brooks movie. All Internet users, even those of you who just
signed up for Web-TV or AOL last week and are still fumbling around,
should check out this site.
When you jump into this online story,
make sure you have a couple of hours free. It takes that long to
read. Imagine a collaborative writing project that tells you
more than you ever wanted to know (and more than probably thought
there was to tell) about the Internet, starting with the laying of
the first telegraph cable across the Atlantic in 1858 (which was NOT
a success, BTW).
You'll learn why the WWW Consortium
[W3C] is based at a physics lab in Switzerland called CERN, instead
of at a computer research center where you'd logically expect it to
be, and why CERN doesn't even stand for the lab's real name -- in
either English or French, along with lots of other neat factoids
that'll come in handy if you ever find yourself playing Trivial
Pursuit: The Internet Edition.
Best High-Tech Sights on the Net
For anyone who has ever
wondered how and why the Internet was created comes this extensive
essay, 'The Roads and Crossroads of Internet's
History.' With this document, users can follow the development
of the Net from its early stages as a military communication system
to the multimedia extravaganza we know today.
Cource Education 2751:
Communication Technology' by Bridget A. Ricketts
Prince of Wales Collegiate, Newfoundland Canada
Gregory R. Gromov's
version is a fun to read and thoughtful look
into the history of the Internet and the WWW.
USM - Professional
Science and Technology Foundation. USA
excellent 9-part review of the Internet's history and its relationship
with the information revolution . Very informative and quite amusing
at times too!