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The following is a talk that I [Carolym Tajnai] began writing in 1982 as an invited speaker for a conference at the University of Malaysia that never took place.

After being invited to present it at the universities of Tokyo and Kyoto, I continued the research and collected historical slides.

The talk has been presented to many audiences in Japan and the US, and is frequently requested by visitors to Stanford University.

The information is kept up-to-date. The talk changes depending upon the audience and their questions, it isn't static. The following is a true story of how the Valley of Heart's Delight became the Silicon Valley and the development of mutually beneficial interactions between Stanford University and industry.


Links Between Stanford University and Industry

by Carolyn Tajnai, Director, Stanford Computer Forum
Assistant Chairman, Department of Computer Science
Stanford University, California 94305, USA



The exciting history of the links between Stanford and industry is the story of the mutual benefit of interaction. First, there was a void which Stanford faculty sought to fill. From that point on when Stanford had a need, industry helped. When industry had a need, Stanford helped. The spirit of cooperation and assistance started when the first link was forged 60 years ago. Professor Fred Terman of Stanford encouraged David Packard and Bill Hewlett to start Hewlett-Packard -- the beginning of Silicon Valley.

The second link came 20 years later when Professor Terman started the Honors Cooperative Program, which enabled local industry to send selected employees to Stanford on a part-time student basis.

The third link was the founding of the Industrial Affiliates Program, which provides a direct link between faculty and company scientists and engineers.

The links now extend far beyond the local area surrounding Stanford -- they extend around the world. I represent the Computer Forum, the Industrial Affiliates program for the Department of Computer Science and the Computer Systems Laboratory. We have members in Japan, France, Italy, the Netherlands and the United States.

Three vital links:

* The birth of Silicon Valley

* The formation of the Honors Cooperative Program

* The founding of the Industrial Affiliates Program

Let me tell you how it all began.

The Birth of Silicon Valley

Until recently, I began the story in the early 1930's during the Great Depression. But 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.

According to Rogers and Larsen in Silicon Valley Fever, 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 footsteps 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."

Rogers and Larsen add, "Lee de Forest had a Stanford University connection; his work was partly financed by Stanford officials and faculty."

Now we move forward 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. In 1937, he made his first significant move. William Hewlett and David Packard were two very bright young men among his students. Hewlett, as a graduate student, under the guidance of Terman, designed and built an audio oscillator, an electronic device that generates electrical signals in the frequency of range of human hearing. It produces a clear tone when connected to a loud speaker.

Terman felt it had great commercial possibilities. He persuaded Packard to return to Palo Alto from Schenectady, New York, where he had gone to work for General Electric, and join Hewlett.

On a part-time basis, the two started a company in the one-car garage of the house where Packard and his wife lived. Hewlett moved into a backyard cottage at the same address. They baked the oscillator casings in the Packard's kitchen oven. Terman could always tell how the new young firm was doing -- "If the car was in the garage there was no backlog, but if the car was parked in the driveway, business was good." Their first large order was from Walt Disney Productions for four oscillators for use in the movie production "Fantasia". That modest garage shop gave birth to the Hewlett-Packard Company.

In 1995, Hewlett-Packard is one of the world's largest producers of computers, electronic measuring devices and equipment. It employs more than 98,000 people worldwide and has annual revenue in excess of 25 billion dollars per year.

Also, during 1937, William Hansen, Professor of Physics, teamed with Sigurd and Russell Varian to develop the klystron tube -- an electron tube in which bunching of electrons is produced by electric fields and which is used for the generation and amplification of ultra-high frequency current.

Stanford University helped with free use of the physics laboratories and $100 for supplies. In return, Stanford was to share in any profits. That $100 became one of Stanford's best investments. It brought in several million dollars in royalties. In 1948, the Varians formed their own company, Varian Associates. Varian grew to 8,100 employees with annual revenue of 1.5 billion dollars by 1994.

During the early 1940's, Terman headed a big defense research project at Harvard University, developing radar countermeasures. The experience put him in the mainstream of government electronic research. He believed that a lot of money would go into this area during peacetime. He set out to expand Stanford's engineering school after he returned to the University in 1946 as Dean of Engineering.

His government contacts helped him to attract federal funding. He encouraged faculty members to become acquainted with engineers in industry to learn of opportunities there. Terman was a corporate board member of new young companies, and a frequent speaker at industry meetings. He prodded local industrial scientists to learn what the school was doing, and how its research might help their business.

Land Use Plan

The University had abundant land -- 8,100 acres -- much of it pasture. Money was needed to finance the University's rapid post-war growth. The original bequest by Leland Stanford prohibited the sale of the land. However, the university could lease the land to industry. Thus, Stanford created the Industrial Park. The goal was to create a center of high technology close to a cooperative university. President Wallace Sterling, David Packard and Terman were instrumental in putting the plan into action.

In 1955, Terman became Stanford's provost and in 1958 he became vice president. He transformed the University's Chemistry Department into one of the best in the country. In 1958, he recruited Carl Djerassi a University of Wisconsin graduate, who had become vice president for research at Mexico-based Syntex Corporation. This set in motion a whole new chain of company formation in biology and medicine. Largely at Djerassi's urging, Syntex established a US subsidiary and research branch in the Stanford Industrial Park, and Alejandro Zaffaroni, Syntex's executive vice president, transferred to the new location.

Syntex became an international company with headquarters in the Stanford Research Park. The 1993 financial reports showed employment of 10,300 and net sales of more than $2 billion. After 50 years as an independent company, Syntex Corporation agreed May 2, 1994, to be acquired by Roche Holding Ltd., a Swiss pharmaceutical company in the largest takeover Silicon Valley had seen. It is now known as Roche Bio Science and is privately held.

Djerassi and Zaffaroni were responsible for the formation of three new companies--Syva, Zoecon, and ALZA.

In 1963, Synvar Associates, the name later changed to Syva, was started as a joint venture with Varian Associates and Syntex. In 1995, Syva was bought by Behring Diagnostics.

According to Dr. Carl Djerassi, in 1968, Syntex decided to put all of their patents, know-how, and key research personnel from their insect research into a separate company, in which Syntex would retain 49 percent ownership. The remaining 51 percent would be spun off to Syntex stockholders as a stock-rights offering. Zoecon was the first company dedicated solely to the development of new approaches to insect control. Occidental Petroleum acquired Zoecon in 1978, and Sandoz, Ltd, acquired the company in 1984.

Also n 1968, Zaffaroni left Syntex to form his own company, ALZA, dedicated to developing new methods of drug delivery. In 1995, ALZA has 1400 employees and annual revenue of 278.8 million dollars.

William B. Shockley, co-inventor of the transistor, returned to Palo Alto, his "hometown", in 1956. He established the Shockley Transistor Corporation in the Stanford Industrial Park where they produced Shockley four-layer diodes. However, eight of Shockley's bright young electronics specialists left in 1957 to establish Fairchild Semiconductor in Palo Alto -- the beginning of the semiconductor industry. Fairchild became a corporate seedbed. Former Fairchild employees started over 40 new companies, and Intel is one of the most famous.

In 1971, Intel introduced the world's first microprocessor, which sparked a computer revolution that has changed the world. About 75 percent of the personal computers in use around the world today are based on Intel-architecture microprocessors. Today, Intel supplies the personal computing industry with the chips, boards, systems and software that are the "ingredients" of the most popular computing architecture. These products help create advanced computing systems for personal computer users. For 1994, Intel reported annual revenue of 11.5 billion dollars and 32,600 employees.

Shockley Transistor Corporation never recovered from the blow of the Fairchild spin-off (Rogers & Larsen), and was sold to Clevite in 1960, to ITT in 1965, then closed for good in 1968, (Lowood).

Professor Dean Watkins, a former professor of Electrical Engineering, founded Watkins-Johnson in December 1957. Watkins-Jonhson is a high-technology corporation specializing in semiconductor-manufacturing equipment and electronic products for wireless telecommunications and defense applications. In 1995, Watkins-Johnson employs 2,200 people and their revenue for the first six months ending June 30 was $194,987,000.

The atmosphere for growth became contagious. Professor Terman continued to encourage his graduates to start their own companies. More faculty members joined in: consulting, investing, and founding new companies.

We now have the densest concentration of innovative industry that exists anywhere in the world. Over 2,000 high-technology companies and numerous service and supplier firms, are clustered in the area.

The county boasts companies that lead in such fast-expanding fields as computers, semiconductors, lasers, fiber optics, robotics, medical instrumentation, magnetic recording, educational and consumer electronics. Some of the companies are branches or subsidiaries of big corporations with headquarters elsewhere, which feel obliged to establish research facilities in the area. Most of the new industry is home grown.

Silicon Valley radiates outward from Stanford University -- to the adjacent cities of Palo Alto and Menlo Park; Northwest to Redwood City, and San Carlos; Southeast to Los Altos, Mountain View, Sunnyvale, Cupertino, Santa Clara, Campbell and San Jose; and has expanded to Alviso, Milpitas and Morgan Hill. It is contained by the San Francisco Bay on the East, Santa Cruz Mountains on the West and the Coast Range to the Southeast.

This area has been dubbed the "Silicon Valley," and Professor Terman has been called the "Father of Silicon Valley."

Growth brought new challenges.....

Honors Cooperative Program

Early in the 1950's, at the close of the Korean conflict, local management asked Stanford to permit their employees to continue their education on a part-time basis. The university attempted to accommodate them in regular day-time classes. Industry responded dramatically, and classes were quickly overloaded. Tuition covered less than half of the actual cost to educate a student. The result was overflowing classrooms and underpayment of costs. Maintaining the quality of education became a serious problem.

To solve this problem, Terman, Dean of the School of Engineering, originated the Honors Cooperative Program, autumn quarter 1954/55. Under this program four companies (Sylvania, Hewlett-Packard, SRI International, and General Electric) agreed to select a number of qualified employees to enroll in graduate work at Stanford. The companies signed five-year agreements that specified they would pay a matching tuition fee--double tuition--for each student. This essentially covered the full cost of educating the Honors Cooperative students. The matching funds were transferred to the departments in which the students were studying, and the funds were used to hire additional professors to handle the increased teaching load.

Stanford Instructional Television Network

The tremendous growth in the area brought new problems to solve. Congestion and traffic increased. Students were spending too much time traveling from office to campus and finding parking. Classes were not always scheduled at a convenient time, and students sometimes had to make two trips a day to campus.

In 1967, it was decided that closed-circuit television would solve the problems of parking and commuting. It would also solve the course scheduling problem.

$600,000 was raised from industry to equip four classrooms as studios, four additional classrooms as monitor rooms, and an auditorium, and to install a transmitting facility.

Two years later in 1969, Stanford began to deliver classes by television. Honors Cooperative students were given the option of taking their courses via television or on campus.

Company members within a 50-mile broadcast range of Stanford receive up to four classes per hour transmitted simultaneously from on-campus classrooms to the organization sites. One-way video and two-way audio provide a highly effective live classroom situation. Off-campus students are able to ask questions of the professor and hold discussions with other remote classrooms.

Tutored Videotape Instruction Program

Expansion presented a new challenge. In 1972, Hewlett-Packard (HP) opened a plant in Santa Rosa, a small town north of San Francisco, and beyond the 50-mile broadcast range. HP management wished to provide the same educational opportunities to those employees that were available to their employees near Stanford.

Professor James Gibbons, now Dean of the School of Engineering, had been investigating the idea of offering classes by videotape. The Tutored Videotape Instruction (TVI) Program began on an experimental basis in October 1973. It proved so successful that it was extended to HP plants in San Diego, California, Boise, Idaho, and to Sandia Laboratories in Albuquerque, New Mexico.

TVI students are considered fully participating members of the campus classes. They perform the same homework assignments and examinations. They are graded in comparison with the on-campus students. The TVI program requires that each company provide a tutor, approved by the course instructor. The tutor attends video-playback sessions to answer questions and encourage student discussion.

The TVI program offers some special advantages: the tapes can be watched at the students' convenience. Tapes can be stopped for discussion at any point, and difficult portions can be immediately reviewed.

The key to the success in TVI courses is the tutor. Statistics show that the TVI students (with tutor) score higher grades than the students in the classroom and those taking classes from the local broadcast operation.

Honors Cooperative Program (HCP) Categories:

There are 3 student categories within the HCP.

Honors Cooperative Program students (HCP) are admitted to Stanford departments in competition with other applicants on the basis of academic record, personal recommendations as to the ability for graduate study, and Graduate Record Examination (GRE) scores. They have the same privileges as any other Stanford student, plus the advantage of being able to attend classes on a part-time basis with company-provided financial support.

Non-Credit Option Status (NCO) is available to employees of member companies who wish to continue their education past a bachelor's degree, but do not intend to seek an advanced degree, or have not been admitted to Stanford's Graduate Division. NCO students receive all class materials, do homework, and take examinations. These grades may later count toward a graduate degree if the student is admitted to Stanford, or may be transferred to another university. The option is available exclusively through television. It satisfies a company's need for updating, upgrading or broadening employees' knowledge without University matriculation. NCO students may also participate in a special certification program by completing a specific series of courses.

Auditors from participating organizations are permitted to view the televised courses at reduced fees. Although they receive all class materials, they are not tested or graded. Auditor privileges are available to all employees of Network member organizations.

A unique relationship exists between Stanford University and local industry. When industry has a need, Stanford helps. When Stanford has a need, industry helps. The Honors Cooperative Program began because local industry had a need to send their employees to the university on a part-time basis. Stanford's School of Engineering responded by establishing the Honors Cooperative Program with financial assistance from industry. In the mid-60's when industry had a problem because their employees, who were attending Stanford classes, were losing too much valuable time because of commuting and scheduling problems, Stanford responded by establishing the Stanford Instructional Television Network with financial assistance from industry. In the early 70's, Hewlett-Packard had a problem when they opened their plant in Santa Rosa, because they wanted to offer the same privileges to their employees there as were enjoyed by those in the Silicon Valley. Once again the School of Engineering responded by establishing the Tutored Videotape Instruction Program.

In 1995, SITN changed its name to the Stanford Center for Professional Development (SCPD). They reach approximately 5,000 students annually from 146 member companies at 200 sites around the country.


Industrial Affiliates Program

In the early 1950's, the same time period in which the Honors Cooperative Program was founded, it became apparent that there was a need for closer dialogue between the University and industry. The first Industrial Affiliates Program, the forerunner of the Earth Sciences Industrial Associates, was established in 1950. The second, the Aeronautics and Astronautics Affiliates Program, was founded by Professor Fred Terman in 1955.

Stanford's scientific and technological industrial affiliates programs provide a direct link between faculty and company scientists and engineers. They provide a way for companies to learn about university research while it is still in progress. Companies are able to establish close relations with both faculty and students.

These programs afford corporations opportunities to enjoy special relationships with the University. More effective channels of communication are developed and fostered between companies and specific areas of Stanford. University schools and departments receive the financial support of affiliates members, and also benefit from the exchange of information generated by these programs.

Stanford University's research programs, faculty, and students are potential resources of great value to many corporations. Stanford research is a blend of basic and applied work. It is often more varied and more exploratory than industrial research, which is generally developmental and oriented towards products and services. The two can complement and balance each other. Stanford is large and complex. It has diverse research programs. Without maintaining specific links to the University, it is difficult for a company to have efficient, systematic access to these resources

The Stanford Industrial Affiliates Programs are such links: it is a proven channel for convenient and direct communication between Stanford faculty and member company scientists and engineers. Members of Stanford's industrial affiliates programs benefit most from the University's substantial resources.

Each program is free to develop according to the interests of the involved Stanford scientists, engineers, or scholars and the needs of those industries most closely allied to it. The emphasis is on individual contact between the representatives of each member company and the faculty, staff, and students in the program. There are now 41 affiliates programs with 500 corporate memberships.

Stanford Computer Forum

I have given you an overview of the Stanford Industrial Affiliates Program. Now, I shall give you more information about the affiliates program that I direct, the Computer Forum.

In 1969, the Department of Computer Science (CSD) and the Computer Systems Laboratory (CSL) combined their resources to form the Stanford Computer Forum. The Computer Forum offers a variety of benefits to its industrial members.

Membership Benefits:

Faculty Liaison: An appropriate faculty member or senior member of the research staff, mutually agreed upon, will serve as technical liaison between Stanford and the member company. His/her role is to strengthen our ties with the member company throughout the year. Each year, interaction in the form of a personal visit to the company, a visit from company staff to Stanford (other than the Annual Meeting), or any other mutually agreeable technical communication will be arranged.

Annual Meeting: The Forum holds an annual two-day meeting to which three representatives of each member company are invited. It features technical sessions at which timely computer research at Stanford is described by advanced graduate students and faculty members. The agenda includes opportunities for informal discussions to complement the presentations. The 1995/96 meeting will be held Wednesday/Thursday, March 20/21, 1996, and telecommunications, networking and distributed systems will be highlighted.

Special Events: In 1993, the Forum held a Software Engineering Workshop and in 1994, "Navigating the Web." The next workshop is tentatively scheduled for September, 1996.

Research Reports: Each company receives a free subscription to all technical reports published by CSD and CSL. Additional hardcopy research report subscriptions are available for $400 ($500 as of January 1, 1996). Approximately 150 to 200 reports are published each year. We send research report abstracts by email to all those who provide electronic mail addresses. By early 1996, research reports will be sent at no cost quarterly on CD-ROM rather than hard copy. Additional CD-ROM subscriptions will be $200 each. Reports can also be retrieved by File Transfer Protocol (FTP) or via the WorldWideWeb.

Student Recruiting: We assist our members in their quest for new Ph.D., M.S., and B.S. employees. We publish a detailed compilation of student profiles, distributed exclusively to our members, and we arrange interviews between our students and the recruiters from our affiliate companies. Autumn quarter 1995/96, student information will be available on a secured Web server. Check our Web page (http://www-forum.stanford.edu) and look at the recruiting section. Note the section for companies and the section for students. The Forum WebMaster has established links to companies so students can access information about job opportunities at Forum companies.

Student/Advisor/Mentor (SAM) Program: The goal is to involve the graduate students more closely with the research problems of the Forum companies. The Forum member company may present a research problem and/or challenge to a faculty member. If the issue can be addressed within his/her research group, the professor will select a student to work with the member company on the problem under the direction of the faculty advisor. The Forum member company will nominate a Mentor to work with the student.

Video Program: The Computer Forum Video Journal is a collection of videotapes of outstanding lectures. It is a licensing program, and we offer the videotapes at cost, $50 for VHS.

Industrial Visiting Scholars: Companies frequently find it beneficial to have their scientists or engineers visit Stanford for an extended stay to study under the direction of Stanford researchers. Such opportunities are available by mutual agreement between the Forum member company and a Stanford faculty member. A company must be a member of the Computer Forum in order to send an Industrial Visiting Scholar. Visiting Scholars are able to audit university courses, and have use of the library, computer and copy facilities, telephone, desk and office supplies. The cost is $50,000 per year which is used to support the research of the professor under whom the visitor is working. It has been suggested that this could be an effective mini-sabbatical, particularly for local engineers to come for one quarter.

Forum Staff: Full-time staff of three are available to assist members.

Membership in the Stanford Computer Forum is open to corporations with strong interests in computing -- corporations that would both benefit from and contribute to this technical interchange. Benefits of Forum membership are more fully realized through continued association. We strongly encourage organizations to regard membership as a long-term commitment.

Forum membership is $15,000 per year, and membership may begin at any time. A special small business membership is available for $10,000 for companies with fewer than 500 employees. In addition, a limited membership for companies with fewer than 100 companies is available for $5,000 per year.

The membership contribution represents an investment in a strong computer science and engineering program at Stanford. It provides an opportunity to watch that program retain its leadership in the computing community.


The seeds for growth were sown sixty years ago because one man had foresight, vision, and the ability to make things happen. The links that Prof. Fred Terman forged have continued to grow stronger to the benefit of the University and industry. Terman, who understood the needs of industry, established a climate of cooperation. His colleagues in industry reciprocated by responding to the needs of the University. Both Stanford University and industry have reaped great rewards from this interaction.

Once called "The Valley of Heart's Delight" -- now called "Silicon Valley" -- the Santa Clara Valley is today an urban area.

There are still a few orchards that bloom gloriously in the Spring. Fortunately, when there were people with vision to establish industry in order to feed people's bodies, there were those who foresaw the need to feed people's souls. We have open spaces preserved in the hills so we can still enjoy nature's gifts.

There are redwood forests in the nearby Santa Cruz mountains. In the middle of Big Basin State Park an old redwood sempervirens tree has been set aside to honor the founding of the Computer Forum. It is our way of giving something back to nature.

It is important for us to remember that what was done in the past affects our lives today. What we do today affects the lives of those who follow us.

Links can form a chain. A chain can form a circle. We have a circle of friendship and professional understanding that reaches around the world. As we become more closely linked by rapid travel and communication, the circle grows smaller. Our lives are more closely entwined. The encompassing circle is small. I hope it will become smaller as we work more closely together for friendship, for peace and for the advancement of all.


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Varian, D. (1983). The Inventor and the Pilot. Palo Alto, CA: Pacific Books.

Bylinsky, G. (1974, June). California's Great Breeding Ground for Industry. Fortune Magazine. pp. 129-224.

Bylinsky, G. (1976). The Innovation Millionaires: How They Succeed. New York: Charles Scribner's Sons.

Johnson, M. (1982, October). Silicon Valley. National Geographic. 162, 4, 458-477.

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Science, (1977. March 18). Volume 195, pp. 1139-1146.

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Tajnai, C. E., "Fred Terman, the Father of Silicon Valley," IEEE Design & Test of Computers, April 1985, 2, 2. Also, published as Department of Computer Science, Stanford University, STAN-CS-85-1052 and CSL-85-276.

Lowood, Henry, From Steeples of Excellence to Silicon Valley, Stanford University Libraries, Published, with permission, in celebration of Varian's 40th year, 1987.

Djerassi, Carl, (1992). The Pill, Pygmy Chimps, and Degas' Horse. Basic Books, New York, NJ.

O'Connor, K. (1994. March 15). Public Relations Office, Hewlett-Packard Company, telephone interview.

Lowood, Henry, Stanford University Library, electronic mail messages, March,/April, 1994.

Hewlett, William, (1995), chance encounter in Menlo Park, short conversation.

Djerassi, Carl, (1995), electronic mail message.