December 06, 2002
The academic origin of Silicon Valley

Here are two theories about the relationship between universities and economic development:

Theory One: Economic development causes universities. The idea that paying energetic young people to sit around talking about post-modernism is good for the economy is so far beneath beneath contempt it needn't even be discussed. The relationship is like that between the husband being rich and the wife having a diamond necklace. His wife has the necklace because he can afford it. The necklace absolutely does not make him any richer. Quite the reverse.

Theory Two: Good science and technology universities can cause economic development.

In his book Cities in Civilization (Weidenfeld and Nicolson, London, 1998), Peter Hall identifies the key fact that created Silicon Valley as the move by one academic, Frederick Terman, to Stanford University (p. 427), in 1924:

Completing his Ph.D., Terman accepted a faculty position at MIT. But, before this, he was stricken with tuberculosis while visiting his family and spent the year 1924 in bed; he stayed at Palo Alto for his health, and became a professor of 'Radio Engineering' at Stanford.

Hall then quotes Silicon Valley Feaver: Growth of High-Technology Culture by E. M. Rogers and J. K. Larsen (Basic Books, New York, 1984. p. 31):

Thus, but for the fickle fact of being struck with a serious illness, Fred Terman would probably have become the godfather of Boston's Route 128, instead of its counterpart in Santa Clara County. And without Fred Terman, Silicon Valley might never have happened.

Says Hall:

It is not an exaggerated verdict: his role as godfather of the incipient industry was crucial, and without it the rest of the story would probably never have taken place.

Hall then quotes M. S. Malone's book The Big Score: The Billion-Dollar Story of Silicon Valley (Doubleday, Garden City, NY, 1985, pp. 20-21):

During his tenure as head of the communications laboratory (1924-45), it was the focal point of the college careers of many bright young scientific minds on campus (much as the computer lab is to 'hackers' now). Because of this, until the end of the Second World War and Terman's promotion to dean, the Stanford communications lab was the heart of technological innovation on the West Coast. By the time Terman moved on, the ties between Stanford and the surrounding electronics industry were so strong that the university was all but guaranteed its present role of providing apprenticeship to each generation of high-tech leaders.

In Hall's next few paragraphs student names like "Hewlett" and "Packard" figure prominently.

And then another fluke happened. Hall again (p. 429):

At this time Stanford's main problem was how to convert university land into money, since the original Stanford land gift forbade the sale of any part of the 880-acre Farm. Terman, by now vice-president, and Wallace Sterling, president, hit upon the idea of a high-technology industrial park. The 660-acre Stanford Industrial Park, created in 1951, was the first of its kind; Terman called it 'Stanford's secret weapon'. Leases, necessary because of the injunction against selling, were granted to high-technology firms; originally the scheme was just a means of making money, but soon the idea developed of technology transfer from the university to industry.

Let me say it again, when Hall asks himself what the key event was that make Silicon Valley into what it became, he says: Terman. He even argues that the other candidate event, so to speak, the move by William Shockley, co-inventor of the transistor, from Raytheon in Boston to Silicon Valley in 1954. Hall reckons that, one way or another, transistor knowledge would have found its way to Silicon Valley anyway, with or without Shockley. The momentum of Silicon Valley, by then, was simply irresistible.

Having both contrived and to some extent lucked its way to the "Science Park" formula, Stanford University has now become a model for similar developments all over the world, not least here in Britain. (Thanks to John Ray for the link to this story.)

There, we sat in a modern conference room, indistinguishable from its counterparts in Santa Clara or Austin, and listened to a presentation by Powderject Ltd. on its new yellow fever and Hepatitis B vaccines and non-invasive powdered vaccine injectors. Some of the technology was more sophisticated than anything found at largest U.S. pharmaceuticals (one of which will likely buy Powderject any day now).

Powderject is, as we learned that morning, only one of dozens of new start-ups being backed by Oxford's own venture capital operation, called ISIS Innovation Ltd. Most are biotech, arising from the school's world-class chemistry and biology programs.

We in Silicon Valley like to pride ourselves in having no past, as if would impede our forward progress. But Oxford, which would seem to have the biggest legacy problem imaginable, also appears to found a way to build off that past, to even use it as a springboard into the future.

And if you follow that link, who do you find at the end of it, writing this ABC News story? A certain Michael S. Malone. That's right, the same man whose 1985 book is quoted in Cities in Civilization. This guy has had his teeth sunk into this Science Park story for the best part of two decades. If the example of Silicon Valley is now there for all the world to follow, it's because of people like Malone, who wrote the Silicon Valley story up in the first place.

This Oxford science park could be looking like a British success story in the making, except that, according to Malone, the European Union may be about to regulate it out of existence. But now I'm straying from my core curriculum.

Posted by Brian Micklethwait at 01:15 AM
Category: Home education