Abstract: Becoming Silicon Valley: Exogenous Factors in the Development of a High-Tech Region

Stephen B. Adams


What was the nature of Silicon Valley during its formative years, before 1975? To what extent can we attribute the rise of the Valley and its capital, control, and ideas to indigenous, as opposed to exogenous, factors? To explore these questions, this paper reviews three stages in Silicon Valley's development: regional disadvantage (1909-1940); achieving critical mass (1940-1960); and establishing entrepreneurial infrastructure (1960-1975). Based on both qualitative and quantitative sources, I conclude that we can attribute much of the Valley's pre-1975 development to factors exogenous to the region. This means:     1. Several of the Valley's high-profile startups were begun with resources external to the region or lost control to forces outside the region.     2. A majority of the critical mass of high-tech employees in the Valley worked for laboratories or manufacturing facilities belonging to firms based elsewhere.     3. Stanford University's primary programs of outreach to high-tech industry involved firms based elsewhere, and much of Stanford's model for interacting with high-tech industry was derived from what other universities and technical institutions did. These findings suggest the importance of attracting exogenous resources and ideas during the early development stages of a high-tech region.