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Silicon Valley

History & Future
by Gregory Gromov


In the beginning was the WORD and the word was... Silicon Valley. Don Hoefler  is credited with coining the phrase: Silicon Valley Silicon Valley is the only place on Earth not trying to figure out how to become Silicon Valley.       ~Robert Metcalfe


The term 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) ...

Hoefler was 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, 1995

In 1971, in a series of articles that Hoefler wrote for ELECTRONIC NEWS, a weekly tabloid, he first used the phrase "SiliconValley" to describe the congeries of 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

don_hoefl86.jpg (7742 bytes)

 (read more about Don C. Hoefler).


Why 1971

 On November 15, 1971 Intel created the world's first microprocessor: the Intel  4004


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 - 1997) of Stanford Computer Forum begins one of her   online-manuscripts  that described Silicon Valley history.

    According to the "Silicon Valley Joint Venture Index 2000 the Silicon Valley's cities were located around the South side of San Francisco Bay:

Silicon Valley Map 2000

 10 years later the above viewpoint of Silicon Valley Joint Venture was changed:  

The geographical 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 Map 4 - 2011

According to the Silicon Valley Joint Venture  Index 2011,  Silicon Valley 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 $50,046.  (San Jose Mercury News, Oct. 19, 2011)



Home Prices in the US Leading High Tech  Centers:

Silicon Valley Top 5 Companies by R&D spending

Source: 2011 Silicon Valley Information and Communications Technologies Study

Silicon Valley Real per Capita Income

Source: Joint Venture: Silicon Valley Network, Inc.


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)

 Silicon Valley Jobs cycle 1995-2009



U.S. Bureau of Labor Statistics, September 08, 2009.
High-tech employment in Silicon Valley:

Where from?

Foreign Language Source: Joint Venture: Silicon Valley Network, Inc.


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 News

Year Asian White Hispanic Black Other
2010 50.1 40.7 4.2 2.3 2.7
2000 38.7 50.9 4.6 2.8 3

Data sources:   Census Bureau; San Jose Mercury News.

Data Source: U.S. Bureau of Labor Statistics,  Population Survey (CPS), 2012



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 Bangalore. 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. 02/23/2010).  

Three years later  the following  - more detailed comparison - data were published:

SourceHow Indians defied gravity and achieved success in Silicon Valley by Neesha Bapat, 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 countries:

Four-Year Bachelor's Degrees in Engineering, Computer Science, and Information Technology Awarded from 1999 to 2004 in the United States vs. India,

  1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005
United States 108,750 114,241 121,263 134,406 137,437 133,854
India   82,107 109,376 129,000 139,000 170,000

Indians have founded more engineering and technology companies [in US] during that past decade than immigrants from Britain, China, Taiwan, and Japan combined.  

Source: Where the Engineers Are. By Vivek Wadhwa, Gary Gereffi, Ben Rissing, Ryan Ong. University of Texas at Dallas


See also:

- Indian 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 industry.   ( U.S. High-Tech Jobs Down Again in 2010  By Brian Heaton, October 5, 2011)  

- US ends India tech restrictions. Wharton Aerospace & Defense Report, February 04, 2011

    Total equity investments into venture-backed companies

PricewaterhouseCoopers data show that Silicon Valley took 40% of venture funding in 2012:

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:

Silicon regions Price-Waterhouse

Source: PricewaterhouseCoopers & National Venture Capital Association


Intellectual property:

      Source: Joint Venture: Silicon Valley Network, Inc.



Highest   Patent Producing Metro areas
(Each city listed includes surrounding areas)

States  Metro areas  Annual averages (2007-2011)  patents producing
California Silicon Valley San Jose 9,237
San Francisco 7,003
Los Angeles 5,456
San Diego 3,165
New York New York 6,907
Washington Seattle 3,968
Massachusetts Boston 3,965
Illinois Chicago 3,886

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" 02/01/2013


See also:

Source: US 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.'

Silicon Valley Top 25 Companies

Source: San Jose Mercury News, 2011 Silicon Valley 150 listings.!bn.png



Silicon Valley Top 5 Companies by R&D

Silicon Valley Top 5 Companies by R&D spending

Source: 2011 Silicon Valley Information and Communications Technologies Study



States startups local grades founders
    Source: "Education and Tech Entrepreneurship" by Vivek Wadhwa, Richard Freeman, Ben Rissing.
    Ewing Marion Kauffman Foundation, 2008

About 60 years ago, Stanford University had some financial problems. The authorities of university tried to resolve 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.' Fred Terman, The father of Silicon Valley by Carolyn Tajnai, 1995

According to Varian Associates it was a simple decision:

'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 Silicon Valley

First Varian 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?
Among 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

Perhaps 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

n 1995  William Hewlett decided to described in more details his own concept of Silicon Valley's birth.

Supernova   of Silicon Valley: What does it mean?

hp-300.jpg (13903 bytes) ' 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
Bill 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) deforest15_il.jpg (7491 bytes)
deforest_triode.jpg (6444 bytes) Moving to California in 1910, 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.' Links Between Stanford University and Industry, by  Carolyn Tajnai, 1995

Supernova   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. Source: 'National Information Resources', by Gregory GromovNauka, 1984, p.15


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,, 2000.

Silicon Valley Entrepreneurial Phenomenon

Let 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 sociological nature of Silicon Valley Entrepreneurial Phenomenon:

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 Ethernet 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 Ron 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 networking industry.

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!   

ships_pare2.jpg (1273 bytes) A Tale of Lambs, Preschoolers and Networking, by Frank Levinson, 2001




Steve Jobs Three IT Revolutions

  • Personal Computing:  


  • World Wide Web:

    By Christmas 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.

  • Mobil Computing:


    The most important Googler you've never heard of 

    ...  Google started in Susan Wojcicki's rented garage...  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 Mike Swift

     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?

    Market Cap
    1 Apple 499.87B
    2 Exxon Mobil  408.97B
    3 PetroChina  252.56B
    4 Wal-Mart Stores 243.00B
    5 China Mobile 229.42B
    6 General Electric 226.59B
    7 Google 223.76B
    8 Microsoft  221.78B
    9 Royal Dutch Shell 220.28B
    10 IBM 219.36B

     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

    When 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.

    The reason 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.




    Silicon Valley 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 more)

    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) ... read more

    The Birth of Silicon Valley:  by Carolyne Tajina

    ... 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 more)

    How I ended up working for a big corporation by Gregory Gromov

    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 contractors".

    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 more)


    How Silicon Valley Came To Be ...

    From the 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...  (read more)

    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 formation

    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 notable.

    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 William Shockley.

    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...

    startup financing cycle diagram

    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 going:

    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 fission.

    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 development?

    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 their own.

    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 State).

    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 Stanford.

    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.

    deforest15_il.jpg (7491 bytes)

    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 Kodak.

    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 - transistor.

    William Bradford Shockley

    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 Semiconductor.

    Fairchild Semiconductor's founders - Traitorous Eight
    Fairchild Semiconductor's founders, clockwise from far left: Jean Hoerni, Julius Blank, Victor Grinich, Eugene Kleiner, Gordon Moore, Sheldon Roberts, Jay Last, Robert Noyce.

    1968—Gordon Moore and Robert Noyce leave Fairchild Semiconductor to found Intel.

    1971 - Intel created the world's first microprocessor: the Intel  4004,  term 'Silicon Valley' by the press.

    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 information technology.


    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 more)

    "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. 161

    The best way to predict the future is to invent it  ~ Alan Kay (Xerox PARC).   InfoWorld, 1982 April 26, Volume 4, Number 16, p.6




    Below, please find a couple of examples:

  • Facebook: Inventor and Entrepreneur -- Mark Zuckenberg.
  • Apple: Co-inventors -- Steve Jobs and Steve Vosniak; Entrepreneur -- Steve Jobs.
  • Netscape: Inventor - Mark Andreessen, Entrepreneur -- Jim Clark


    • Click here  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,


    The Roads and Crossroads
    of Internet History

    By Gregory Gromov

    1. Internet Before World Wide Web
    The First 130 Years: Atlantic cable, Sputnick, ARPANET,"Information Superhighway", ...
    2. World Wide Web as a Side Effect of Particle Physics Experiments.
    World Wide Web was born in CERN ...
    3. Next Crossroad of World Wide Web History
    World Wide Web as a NextStep of PC Revolution ... from Steven P. Jobs to Tim Berners-Lee
    4. Birth of the World Wide Web, Browser Wars, ...
    Tim Berners-Lee, R. Cailliau, Marc Andreessen, Browser Wars, ...
    5. Early History of Hypertext
    Hypertext Foundation of the World Wide Web: Vannevar Bush's hyperlink concept, Ted Nelson coins the word Hypertext, ...
    6. "Living History" of Hypertext.
    Hypertext Saga of Theodor Holm Nelson: The Fate of Thinking Person in Silicon Valley ...
    7. "Xanadu" Plan
    The Nelson's Xanadu Plan to build a better World Wide Web
    8. Growth of the Internet: Statistics
    Statistics of the Internet & World Wide Web: Hosts, Domains, WebSites, Traffic, ...
    9. Conclusion
    What is the nature of World Wide Web?
    10 Prehistory of the Internet
    Ancient Roads of  the Telecommunications & Computers
    11 They 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

     NetworkWorld. June, 1997


    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 University,  

    Oxford University,  UK


    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.


    Gregory  Gromov 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 Health Library, 
    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. Faculty of Art,  Canberra


    ... 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, USA


    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 people.

    Open Learning Agency : learning resources to support the K-12 education system in British Columbia, Canada


    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...

    by Robert Melczarek  Introduction for EDU 606  School of Education
    Troy State University, Dothan. USA


    The Roads and Crossroads of Internet History - Gregory Gromov's comprehensive and fascinating overview of the philosophy and history of the Internet.

    Cource  STS 3700B 6.0: 'History of Computing and Information Technolog' by Luigi M Bianchi. School of Analitical Studies & Information Technology. Science and Technology Studies

    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 Buffalo


    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, Berkeley.


    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.

    by  Robin Miller
    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: 'Power and 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 Development Center
    The Maine Science and Technology Foundation. USA


    an excellent 9-part review of the Internet's history and its relationship with the information revolution . Very informative and quite amusing at times too!

    CADVision Development Corporation. USA