Guest column: Three historical forces shape Silicon Valley

Guest Column by Leslie Berlin

What made Silicon Valley happen? As a historian of the region, I am often asked this question, and I thought I would use this space to begin to answer it.

The birth of Silicon Valley was the result of a confluence of three historical forces: technical, cultural and financial.

On the technical side, in some sense the Valley got lucky. One of the inventors of the transistor, William Shockley, moved back to Palo Alto, where he had spent some of his childhood, in 1955. Shockley was the vector by which the transistor made its way to the stretch of San Francisco Peninsula today known as Silicon Valley. Shockley was also a brilliant physicist — he would share the Nobel Prize in 1956 — an outstanding teacher and a terrible entrepreneur and boss. All three of these characteristics would prove key to Silicon Valley’s future.

Because he was a brilliant scientist and inventor, Shockley was able to recruit some of the brightest young researchers in the country — Shockley called them “hot minds” — to come to work for him in a part of Northern California that was still transitioning from agriculture to industry. Because he was an outstanding teacher, Shockley got these young scientists, all but one of whom had never built transistors, to the point that they not only understood the tiny devices but began innovating in the field of semiconductor electronics on their own.

And because Shockley was a terrible boss — the sort of boss who posts people’s salaries and subjects his employees to lie-detector tests — many who came to work for him could not wait to get away and work for someone else.

That someone else, it turned out, would be themselves. The move by eight of Shockley’s employees to launch their own rival operation marked the first significant modern startup company in Silicon Valley.

Equally important for the Valley’s future was the technology that Shockley taught his employees to build: the transistor. At the risk of sounding overly simplistic or deterministic, I would suggest that the transistor be thought of as the grain of sand at the core of the Silicon Valley pearl. Nearly everything that we associate with the modern technology revolution and Silicon Valley can be traced back to the tiny, tiny transistor.

The next layer of the pearl appeared when people strung together transistors, along with different discrete electronic components like resistors and capacitors, to make an entire electronic circuit on a single slice of silicon. This new device was called a microchip. Then someone came up with a specialized microchip that could be programmed: the microprocessor. The first pocket calculators were built around these microprocessors. Then someone figured out that it was possible to combine a microprocessor with other components — that was a personal computer. People went on to write code for those computers to serve as operating systems and software on top of those systems. At some point, people began connecting these computers to each other: networking. Then people realized it should be possible to “virtualize” these computers and store their contents offsite in a “cloud,” and it was also possible to search across the information stored in multiple computers. Then the networked computer was shrunk — keeping the key components of screen, keyboard and pointing device (today a finger) — to build tablets and palm-sized machines called smartphones. Then people began writing apps for those mobile devices …

You get the picture.

These changes, I should add, all kept pace to the metronomic tick-tock of Moore’s Law.

Many of these developments happened in places other than Silicon Valley, but an enormous concentration of innovations came from that slender stretch of peninsula. Why? Because the skills learned to build and commercialize one layer of the pearl underpinned and supported the development of the next layer.

The transistor, a technology with such latent potential for development, also offers a key answer — not the only answer, but an essential one — to a question that no one ever asks me but that I think about quite a bit: Why has Silicon Valley lasted so long and been able to reinvent itself from one generation of technology to another? At first glance, the Silicon Valley of the 1970s, best known for building microchips, is hard to connect to the one best known today for social networking and Internet search — but peel back the layers and there is the transistor sitting quietly at the center of it all.

This brings us to the second force behind the birth of Silicon Valley: culture. Shockley, the transistor and the scientists Shockley recruited arrived at a time when the valley was still largely agricultural, renowned for its stone fruit orchards. But the industry that was in the area had a distinctly high-tech (or as they would have said then, “space age”) focus. The largest employer was Lockheed. IBM was about to open a small research facility. Hewlett-Packard, one of the few homegrown tech companies in Silicon Valley before the 1950s, was more than a decade old. Stanford, meanwhile, was actively trying to build up its physics and engineering departments to create what Provost Frederick Terman called “a community of technical scholars” in which the links between industry and academia were fluid. All of this meant that as the new transistor-cum-microchip companies began to grow, the little bit of business infrastructure that existed was well suited. Technically, knowledgeable engineers were already there. A skilled labor force was available. And there were opportunities to build a business environment around the needs of new companies coming up. This cultural component was essential for the birth of Silicon Valley because it established what became a self-perpetuating cycle: everything from zoning laws to community course offerings was developed to support a tech-based business infrastructure.

The third key component — along with the right technology seed falling into a particularly rich and receptive cultural soil — was money. Again, timing was crucial. Silicon Valley was kick-started by federal dollars. Whether it was the Department of Defense buying 100 percent of the earliest microchips, Hewlett-Packard and Lockheed selling products to military customers, or federal research money pouring into Stanford, Silicon Valley was the beneficiary of Cold War fears that translated to the Department of Defense being willing to spend almost anything on advanced electronics and electronic systems.

The government, in effect, served as the Valley’s first venture capitalist.

Leslie Berlin has been studying the history of innovation in Silicon Valley for nearly two decades. She is project historian for the Silicon Valley Archives at Stanford University and author of The Man Behind the Microchip: Robert Noyce and the Invention of Silicon Valley.