In “Social Networks in Silicon Valley,” a chapter of The Silicon Valley Edge: A Habitat for Innovation and Entrepreneurship, Emilio J. Castilla, Hokyo Hwang, and Mark and Ellen Granovetter profile the social networks and institutions that make Silicon Valley a unique social and economic model (http://www.stanford.edu/group/esrg/siliconvalley/docs/siliconvalleyedge.pdf). Their study is a project of the Stanford Valley Networks Analysis Project (http://www.stanford.edu/group/esrg/siliconvalley/papers.htm), which operates out of Stanford University, next to Silicon Valley, ground zero for the tech boom of the late 20^th century. The chapter attributes the area’s success to the structure of its person to person social networks and the impact of neighboring institutions on those networks.

The social networks of Silicon Valley are a huge topic, and I will only be able to cover a few of the chapter’s main points. To start, the tech firms witness a lot of “labor mobility,” or employees switching between firms and fields of employment (tech, venture capital, finance). Based on Granovetter’s study, which we read in class, the writers suggest that this mobility is dependent upon weak bonds between the techies (mostly engineers) who feel greater loyalty to one another and to the advancement of technology than to individual firms. Because the social network is dense (rich in weak and strong ties) and decentralized (people switch fields of interest), the flow of information and, therefore, innovation is sped up. Information that flows between finance, venture capital, and technology firms also encourages a culture of spin-offs. In fact, the writers refer to a “genealogy chart” of Silicon Valley that shows how most current firms are “descendents” of firm 0, the Schokley Semiconductor Labs, founded 1956. In a spin-off, leaders use their experience from previous firms, but are allowed more freedom to try out new ideas and innovations. In addition, the institutional connections to Stanford also encouraged innovation through the university’s industrial park, intellectual capital of students and professors, and affiliates. In so doing, Stanford became a sort-of shared focus for many of the Silicon Valley tycoons. Also, the writers cite the influence of venture capital firms, which hired many techies in addition to financiers with a result of increasing connecting edges between the network.

The Silicon Valley network proves how density of weak ties and high levels of betweenness (because of the flow between different types of firms) can improve flow of information, money, and innovation. In addition, by acting as a mock-focus, Stanford University enabled the area’s success. Venture capital firms reinforced these bonds. This chapter is a great read and makes the main ideas from lecture, Granovetter, and Gladwell come to life!