Understanding Silicon Valley

Summary

What has made Silicon Valley so productive of new technologies and new firms? How did its pioneering achievements beginin computer networking, semiconductors, personal computing, and the Internetand what forces have propelled its unprecedented growth? This collection of nine chapters by contributors from varied disciplinesbusiness, geography, history, regional planning, and sociologyexamines the history, development, and entrepreneurial dynamics of Silicon Valley. Part I, "History," provides context for the Valley's success by exploring its early industrial roots. It traces the development of the electronics industry in Silicon Valley back to the founding of Federal Telegraph in 1908, and discusses the role of defense spending and the relationship with Stanford University in the region's growth. Part II, "Institutions," emphasizes the importance of supporting institutions and practices in helping Valley startups succeed. Four chapters explore the role of law firms in facilitating the formation of new companies, the evolution of the venture capital industry and its role in funding new firms, the importance of labor mobility, and the significance of close interfirm relationships in the success of Silicon Valley companies. Part III, "General Explanations," presents three different perspectives on the environment that has made Silicon Valley so successful. The first chapter considers Silicon Valley as an ecosystem of interacting institutions, individuals, and a culture that encourages and nurtures entrepreneurship. The second chapter argues that Silicon Valley should not be seen as a region in which relationships are based on civic virtue, but rather one in which trust is based on performance, which makes it uniquely permeable to new ideas and talented individuals. The final chapter contends that institutions specializing in new firm formation are responsible for Silicon Valley's unique ability to foster technological advances.

Author Biography

Martin Kenney is Professor of Human and Community Development at the University of California, Davis, and a Research Associate at the Berkeley Roundtable on the International Economy. He is, most recently, co-author of Beyond Mass Production: The Japanese System and Its Transfer to the United States.

Foreword

John Seely-Brown

Contributors

xvii

Introduction

(14)

MARTIN KENNEY

Part 1: History

How Silicon Valley Came to Be

(33)

Timothy J. Sturgeon

The Biggest ``Angel'' of Them All: The Military and the Making of Silicon Valley

(23)

Stuart W. Leslie

Part II: Institutions

Dealmakers and Counselors: Law Firms as Intermediaries in the Development of Silicon Valley

(27)

Mark C. Suchman

Venture Capital in Silicon Valley: Fueling New Firm Formation

(26)

Martin Kenney

Richard Florida

High-Technology Agglomeration and the Labor Market: The Case of Silicon Valley

124

(17)

David P. Angel

The Origins and Dynamics of Production Networks in Silicon Valley

141

(24)

Annalee Saxenian

Part III: General Explanations

Flexible Recycling and High-Technology Entrepreneurship

165

(25)

Homa Bahrami

Stuart Evans

Social Capital and Capital Gains: An Examination of Social Capital in Silicon Valley

190

(28)

Stephen S. Cohen

Gary Fields

Institutions and Economies: Creating Silicon Valley

218

(23)

Martin Kenney

Urs Von Burg

Notes

241

(12)

References

253

(26)

Index

279

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