Silicon Valley is known for the destination of the many big tech companies such as Cisco, Yahoo!, Google, Facebook, etc. One might wonder why these great technology companies of today are centrally, if not started, in the Silicon Valley. Silicon Valley, “has long been the model of success for a modern regional economy”(NYT), and other states and even the world try to duplicate the network of Silicon Valley, hoping to achieve the same growth and success as many companies sprouted from Silicon Valley did.
To further stress the importance of Silicon Valley network and why it’s important to study the network, there was a recent study of Cleveland economy and Silicon Valley economy. “The Study is summarized nicely:
“Cleveland is a perplexing economy,” according to Dr. Christine Chmura, President and Chief Economist of Richmond-based Chmura Economics & Analytics, “It should be growing faster than it is because the industry mix is more favorable than the state and the region has so many attractive qualities such as the arts, cultural attractions, recreational opportunities, and professional sports teams.”” (A Perplexing Economy).
Cleveland economy network:
Silicon Valley economy network:
The nodes in the network represent industry mix, cultural attractions, etc. The Cleveland network shows that it’s not the lack of nodes that the economy might not be doing as well as the Silicon Valley network. The Silicon Valley network demonstrates that the economy require intersection and the interconnection of knowledge. Therefore, this is one of the reasons why studies of the network of Silicon Valley are necessary to understand or duplicate the economic growth.
The article done by a group in Silicon Valley Network Analysis Project (SiVNAP) describe that there are two major elements besides others that describe the nature of Silicon Valley Network. One of the major elements is the role of Stanford. “In the 1950s, two institutional innovations—the University Honors Cooperative Program and the Stanford Industrial Park—brought together university researchers and nascent industry interests. Stanford Industrial Park (now called Stanford Research Park), conceived by Stanford provost Frederick Terman and officially founded in 1951, was the first of its kind.” (Social Networks in Silicon Valley). There were many companies including many Stanford students and faculty start-up companies (ex: HP, Yahoo!), who form great ties with the park and the university. Many innovative ideas created in Stanford found their ways to industries through licensing via the Stanford Office of Technology Licensing. Example include PageRank, Google’s algorithm, was license through Stanford Office of Technology Licensing which is owned by Standford. The 50 or so research centers in Silicon Valley created a link between the industry and the university. They are the link that information about research activities, innovative ideas, recruitment, etc. that industry needed. Also industries provided funding for researches, opportunities of learning for many students. There are a great exchange of ideas and information that provides benefits for industry as well as faculty and students in Stanford. Another great element in Silicon Valley also is the venture capitalists. The great increase of venture capitalists provided many start-up companies the network and financial management they needed. Also most venture capitalists come from the industrial background rather than the finance background. Due to the success of many venture capitalists in Silicon Valley and the expansion of venture capital industry, it attracted other venture capitalists, entrepreneur as well as people with innovative ideas. Therefore, many start-off companies started in Silicon Valley. This also characterizes the network of Silicon Valley.
The articles also stressed that the duplication of Silicon Valley is impossible without understanding the characterization of the social network. The idea of start-up companies is vital to the Silicon Valley. Usually when a company becomes large and famous around the world, it’s resistance to change due to its past success. Therefore, usually the innovative ideas are sometimes discarded because of what Clayton Christensen calls the “innovator’s dilemma”. The Silicon Valley creates opportunities for those start-up companies to explore and start their businesses based on their ideas while building upon ties with organizations that exist around them. This can also be said about spin-offs. In addition, the NYT article investigates further about why location is a key to many start-up companies. The combination of start-up, spin-off, and large organizations in Silicon Valley create a network of information that favors innovation and creativity. In class, we learned about network with link representing friendship, prices, etc. However, in Silicon Valley, the link represents innovation. No wonder all large technology companies that created iPhone, Google searches, VoIP, etc. are all in Silicon Valley.
In conclusion, the Silicon Valley network is too complex to understand in one day. It contains a lot of histories that need to investigate with the exploration of Silicon Valley network. There are more secrets that need to be revealed to fully understand why Silicon Valley is so successful.
References:
NYT: New York Times article featuring why many start-ups companies come to Silicon Valley. http://www.nytimes.com/2007/12/20/technology/20cluster.html?_r=2&pagewanted=all
A Perplexing Economy: describe how Cleveland and Silicon Valley economies are different
http://www.networkweaving.com/blog/2007/12/perplexing-economy.html
Social Networks in Silicon Valley: a paper from Silicon Valley Network Analysis Project (SiVNAP) which describe many natures of Silicon Valley success.
http://www.stanford.edu/group/esrg/siliconvalley/docs/siliconvalleyedge.pdf
In 1997 Walter Cronkhite narrated a PBS documentary called “Silicon Valley: A 100 Year Renaissance.” I have a copy of the companion book, which compares the European Renaissance (1350 - 1600 AD) with the 100 year evolution of Silicon Valley, starting with the 1891 founding of Stanford University (where nearly half of the initial faculty, including the first President, were from Cornell). The video is available from Amazon and (currently) from EBay. I recall the original two hour broadcast - I found it quite enthralling. It featured interviews by most of the key players of the time.
The companion book, produced by the video’s producer John R. McLaughlin, reveals another aspect of the Silicon Valley network that I don’t recall being mentioned in the broadcast: “It’s no coincidence that much of the great rock and roll music of the 1960s and 1970s emanated fro mthe sons and daughters of the Silicon Valley work force: The Grateful Dead, Santana, Pablo Cruise, Jefferson Airplane….Creedence Clearwater…Fleetwood Mac, and more. The affluence of the Valley and a sense of urgency, coupled with youth’s rejection of tradition, were primary factors that led to the formation and success of these music groups.”
The author attributes that sense of urgency, pervading the 20th century, to events like the 1918 flu epidemic, World Wars I and II, and the threat of nuclear annihilation, and compares their influence to that of the Black Death, the plague that occurred at the onset of the European Renaissance.
I became interested in the question of whether such a renaissance could ever occur in Ithaca (no less than Cleveland!), with Cornell as its nucleus. There are parallels between the philosophies of Ezra Cornell and Leland Stanford, and the universities are quite comparable. A remarkable amount of technological innovation has arisen here in Ithaca. Because Ithaca is so small, its social network entails few degrees of separation, which should encourage the establishment of research and business ties. Of course there are differences (and not just the weather), but just as with Cleveland it is worth asking what it would really take to bring about such a renaissance here in Ithaca.
Reference: “The Making of Silicon Valley: A One Hundred Year Renaissance”, edited by Ward Winslow and published by the Santa Clara Valley Historical Association, 1995.
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