Silicon Valley is a global entrepreneurial region and entrepôt-dock that serves as a receiving and transfer point for global innovation talent, technological innovations and high-tech growth firms in the making. This is in sharp contrast to the situation of most of its imitators and far beyond its own starting point as a government funded nascent high-tech cluster of firms interacting with a rising entrepreneurial university.
The ideological model of heroic entrepreneurship fostered in Silicon Valley elides some of the collective drivers of regional innovation, while masking its triple helix dynamics of university-industry-government relations. A five-phase model of Silicon Valley’s development includes:
1 Origin: developing the capacity to create high-tech firms through government supported research and technology transfer, university–industry interactions;
2 Aggregation: grouping these high-tech firms into a significant cluster with open lateral networks;
3 Expansion: growth of some cluster firms into large hierarchical organizations in parallel with large domestic and foreign technology firms from elsewhere establishing R&D units in the Valley, along with a growing start-up dynamic;
4 Efflorescence: a continuation of the above phases and emergence of multiple interacting high-tech platforms in the region, at various growth stages, along with an influx of technology and entrepreneurs; and
5 Renewal: moving from one technological paradigm to another as the cluster declines, beginning the start-up process over again with triple helix interactions emerging to solve problems and taking regional development forward.
Innovative clusters in Silicon Valley developed a typical life course, originating in knowledge derived from academic research or the R&D labs of large firms. They took shape as an interactive group of start-ups, a few of which attained great success and at least partially detached themselves from their cluster of origin to become an integrated multinational corporation, like Intel. They then returned to their cluster and academic bases to renew ties and acquire start-ups and advanced academic knowledge in order to improve their product lines and reinvigorate their knowledge bases.
Innovative clusters arose, declined and revived, even as many individual firms were superseded in the process. With their technologies outmoded, like SUN Microsystems workstations, they were acquired by new firms for their people if not their product line. Experienced technical entrepreneurs were available, from both previous firm successes and failures, to provide so-called ‘adult supervision’ for a new generation of start-ups. A start-up culture, including recent graduates and long-term firm employees, shapes networks of friends and acquaintances into proto-firms in academic research groups and existing firms, which are then hived off into independent entities (Start-up Genome, 2011). Silicon Valley is unique in the large number of successful high-growth firms created from the late 1930s until the present.
Behind innovations like the Google search engine, there is typically an agglomeration of social, intellectual and financial capital. For example, Google originated from government–university collaboration, in this case the Defense Advanced Research Project Agency (DARPA) program in data mining and the Computer Science Department at Stanford University, with midwife assistance from Stanford’s Office of Technology Licensing (OTL). In addition, a ‘university angel’, a serial entrepreneur in the Computer Science Department, recognized the commercial potential of the algorithm long before a business model had been inferred, invested and introduced the project to a venture capital firm.
A corollary of Silicon Valley’s expansion phase is the partial replacement of lateral interactions by more hierarchical regimes (Steiber & Alänge, 2013). The freewheeling, cross-firm, informal after-hours exchanges of an earlier era dampened as firms matured. However, a dynamic start-up culture has renewed the culture of free exchange, with its own collaborative formats of hackathons, code camps and meet-ups, as well as traditional bar and coffeehouse conversations. The key role of Stanford in the development of the region receded as high-tech firm development and entrepreneurship appeared to take on a life of its own. To ensure renewal of its technological base, Silicon Valley needs the continuing inspiration of an expanding academic sphere, beyond Stanford and Berkeley.
Contemporary Silicon Valley is in an efflorescent phase, with a series of innovation clusters at various stages of development, crosscutting and hybridizing various technological fields. Such a generative phenomenon has not been seen since Thomas Edison spun off a series of industries from his lab in Menlo Park, New Jersey, which did not agglomerate locally. Seattle has Microsoft, a leading firm in a new industry; northern New Jersey has a group of large research-based pharmaceutical firms in a mature industry, and Cambridge UK has a series of niche high-tech firms (Koepp, 2002), but none of them has simultaneous, multiple clusters at various growth stages like Silicon Valley (Henton & Held, 2013). Apple Campus 2 will be the latest addition to the ecosystem when completed. Watch this video detailing plans for the construction of the campus.
Silicon Valley still reaps the benefits of continuing public investment, but it faces the danger of losing the ability to regenerate itself as intellectual capital capacity becomes overly dependent upon external sources for renewal. What appears to be an independent, self-sustaining and self-organizing process, based on an ‘innovation ecosystem’ of law, accounting and head-hunting firms, business angels and venture capitalists focused on generating start-ups, attracting neophyte entrepreneurs to Silicon Valley to gain access to their expertise (Munroe & Westerland, 2009), is actually a highly contingent technoscape.
The Silicon Valley innovation ecosystem has the appearance of an independent dynamic force, but is itself sustained by two pillars that are essential for its renewal: (1) university human-capital production, and (2) large-scale government- research programs. Lacking these supports, the ecosystem is increasingly starved of oxygen and eventually loses momentum, and may be unable to continue its growth trajectory. Without a renewal of public support and/or growth of private philanthropy, Silicon Valley will start to resemble aspiring high-tech regions attempting to create an innovation development strategy with a relatively weak university and/or government support structure. On the other hand, a bottom-up initiative, the California Institute of Regenerative Medicine, provides a low-interest debt model for a counter-cyclical innovation strategy as the basis of future growth and renewal in Silicon Valley and elsewhere (Etzkowitz and Etzkowitz, 2015)