Santa Clara County did not become Silicon Valley overnight. Its growth relied on a combined effort from federal, state, and local government, academia and private research, venture capital, publicity, and a critical mass of technology companies. For Silicon Valley, the company that pioneered that critical mass was IBM.
IBM released their first computer model and opened the Almaden Research Center in San Jose by 1954, expanding research beyond Stanford Research Institute and the Ames Research Laboratory at Moffett Field. Not only did IBM deliver a competitive push that propelled other technology companies in the area forward, IBM also helped create a strong middle- and upper-middle class by creating thousands of jobs in the valley, ranging from laborers to world-class scientists.
IBM’s early work in minicomputers also helped spur neighboring Hewlett- Packard to develop competing products. A couple decades later, Intel was chosen by IBM as the supplier of IBM’s microprocessor for the company’s first personal computer. IBM’s success also invited competition from Apple, who challenged IBM’s then-near monopoly in the personal computer market. Larry Ellison, CEO of Oracle, said he was inspired by research papers published by IBM’s Almaden lab that first described a relational database, which is the principle behind today’s computer searches.1 With a few other companies, IBM helped spur a critical mass that defined Santa Clara County as the technology hub of the planet.
Lockheed Martin was another major influencer in the development of Silicon Valley. Lockheed opened their own research laboratory in Stanford Research Park and their own manufacturing facility in Sunnyvale, adjacent to Moffett Field, where NASA has research labs. Today, Lockheed Martin leads the Lockheed Martin Silicon Valley Alliance, which is aimed at expanding its collaboration with companies in Silicon Valley to meet the federal government’s various technology needs.
The critical mass was heralded by IBM and Lockheed Martin, but the scales were tipped in Silicon Valley in the late 1960’s when former Fairchild Semiconductor Labs left to found Intel, Advanced Micro Devices, and Nvidia.
Stanford Research Institute’s (“SRI”) collaboration with Stanford University has played a tremendous role in centralizing the research-output and attracting companies and talent to Silicon Valley. SRI is structured as a 501(c)(3) nonprofit scientific research institute and performs client- sponsored research and development for government agencies, particularly the Department of Defense, commercial businesses, and private foundations.
The impact
At the time of the Industrial Revolution, the world was a far less connected place than it is today. When mass-production, skyscrapers and modern banking started blooming in the United States, the undeveloped world was practically unaffected. Just a tiny fraction of the world was a part of the middle class. Today, more than three billion people are connected by the Internet, and over 3.2 billion people are in the global middle class. And that number is growing every day. When innovation happens today, the entire world benefits.
Below are the key events that led to Silicon Valley’s dominance.
- 1930s-1940s:
- The region begins to emerge as a center for technology development, largely due to the presence of Stanford University and its engineering programs.
- Hewlett-Packard (HP) is founded in a garage in Palo Alto in 1939 by Bill Hewlett and Dave Packard, often cited as one of the earliest companies in the area.
- 1950s-1960s:
- The term “Silicon Valley” is coined in the early 1970s to describe the region’s concentration of silicon chip manufacturers.
- Shockley Semiconductor Laboratory, founded by William Shockley, one of the inventors of the transistor, opens in Mountain View in 1956. Many of its employees later leave to form Fairchild Semiconductor in 1957.
- Fairchild Semiconductor becomes one of the pioneering firms in the semiconductor industry.
- Stanford Industrial Park is established in 1951, providing space for technology companies to grow.
- Other notable companies founded in this era include Intel (1968) and Advanced Micro Devices (AMD) (1969).
- 1970s-1980s:
- The personal computer revolution begins, with companies like Apple (founded in 1976) and Atari (founded in 1972) playing significant roles.
- Xerox PARC (Palo Alto Research Center) is established in 1970, becoming known for its groundbreaking research in computing and user interface design.
- Population and economic growth in the region accelerate, fueled by the success of these technology companies.
- The first companies from Silicon Valley are listed on the stock exchange, including Intel (1971) and Apple (1980).
- 1990s-2000s:
- The rise of the internet leads to the dot-com boom in the late 1990s, with many internet startups based in Silicon Valley.
- Google is founded in 1998, quickly becoming one of the most influential technology companies in the world.
- The population of Silicon Valley continues to grow rapidly, driven by both domestic and international migration.
- Economic growth remains robust, with Silicon Valley becoming synonymous with innovation and entrepreneurship.
- Numerous companies from various sectors, including biotechnology and software, emerge and go public during this period.
- 2010s-Present:
- Silicon Valley remains at the forefront of technological innovation, with companies like Facebook, Twitter, and Uber disrupting traditional industries.
- However, concerns about housing affordability, income inequality, and the impact of technology on society become more prominent.
- The population of Silicon Valley continues to grow, albeit at a slower pace compared to previous decades.
- Economic growth remains strong, with Silicon Valley continuing to attract investment and talent from around the world.
Overall, Silicon Valley has evolved from its roots in semiconductor manufacturing to become a global hub for technology and innovation, driving economic growth and societal change.
