Understanding Silicon Valley: The Anatomy of an Entrepreneurial Region (Stanford Business Books

by Martin Kenney (Editor)

What has made Silicon Valley so productive of new technologies and new firms? How did its pioneering achievements begin—in computer networking, semiconductors, personal computing, and the Internet—and what forces have propelled its unprecedented growth? This collection of nine chapters by contributors from varied disciplines—business, geography, history, regional planning, and sociology—examines 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.

Genres: Technology, Business, History, Economics

304 pages, Paperback

First published August 1, 2000

Reviews

[Tech Historian · Rating 4 out of 5]

A "Must Have" for anyone interested in Silicon Valley history.

One of the elements of a successful technical history is how often you refer back to it. Since this a compilation of essays by a series of authors each writing a chapter the quality varies. However it's worth buying just for the essays about the Military History of the Valley by Stuart Leslie and the Origins of Production Networks by AnnaLee Saxenian.

[Liam · Rating 4 out of 5]

"Although Stanford is rightly recognized as a seat of knowledge creation and a key player in the Valley ..., the flow of knowledge doesn't just go from inside to out. Knowledge also moves in from the rest of the region. Indeed, some of the most highly attended classes at Stanford are those taught by, or include lectures by, key figures in the Valley, carrying what they know back to the school. So as I look at Stanford University next door to me, I see flows of knowledge moving in and out along rails of practice that stretch across the region." (John Seeley Brown, xv)

"'I think they were "every man for himself" much more back [east] ... [East Coast] manufacturers would never cooperate [on standards for vacuum tubes], partly because of the patent situation. RCA dominated the patents, and you couldn't leave RCA out, and if RCA was brought in, it wanted to boss everything. The group out here was involved in military production, instruments, and specialized stuff, where RCA patents weren't such a dominating feature. RCA wasn't trying to build a monopoly in the instrumentation business, for example." (Frederick Terman quoted in Timothy Sturgeon, 28)

"This empiricist approach of trial and error captures the essence of 'learning by doing' in high-technology companies. ... The emphasis on continual recalibration is especially critical when there are no historical precedents or recipes for success for a given product or market arena." (Homa Bahrami and Stuart Evans, 178)

On Stanford and the emergence of Silicon Valley, 207-9.

[Adam Calhoun · Rating 3 out of 5]

Understanding Silicon Valley is not a book for those with a passing interest in Silicon Valley. Instead, it is a work of well-cited research articles describing why Silicon Valley became the massive technology presence that it is today. That is far from a bad thing, but something that should be remembered before picking this book up.

The book offers many different perspectives as to what caused the transformation. Some are convincing. Others are far from it. Perhaps the most interesting is the first chapter: it reminds the reader that Silicon Valley did not spring from some business-tabula rasa, but rather from a region that already had a history of pioneering technology (in this case, radio technology in the early part of the century). Of course, other regions - especially Boston - had this advantage too, so it does not give much insight into what made Silicon Valley special. Rather, it is a useful bit of context.

The rest of the book veers from the importance of production networks and labor agglomerations to the influence of the law firms to, most fascinatingly, the role of venture capital. The venture capital sector in its modern form is apparently an American invention of the last fifty years and does a great job of explaining the economic trajectory that Silicon Valley took.

Overall, some chapters are convincing, some aren't, and this book is only worth reading if you want to study Silicon Valley in great detail.