Silicon Valley History and Innovation

There are many hi-tech hubs in world

• Boston “Route 128”
• Bangalore, India
• Silicon Wadi, Israel
• Silicon Glen, Scotland
• But there is only one original, Silicon Valley
Silicon Valley
It all started with the birth of the
transistor in 1947
Schokley and team at Bell Labs in New Jersey
Stanford creates first industrial business
park in 1951

Fred Terman
Schockley moves to West coast, 1955

William Shockley
Arthur Rock moves to bay area in
1961, becoming the first venture
capitalist
Silicon Valley is born
HP and Varian first to move to Stanford
Business Park

Bill Hewlett
David Packard
Lead team from Schockley split and
start Fairchild in 1957
Fairchild's Noyce
and TI’s Kilby
independently
integrate many
transistors on a
single device and
invent the
integrated circuit
(IC)
Founders of Fairchild split and start
other Silicon Valley icons
Silicon Valley thrives on innovation
Innovation relies on a good Ecosystem
Ideas
&
Commerci-
alization
Basic
Capital
Researc
h

Laws/ Human
Regulation Resource
s
Need ongoing waves of Innovation
4th wave Internet
(Netscape, Yahoo, eBay, Google)

3rd wave PC
(Apple, Silicon Graphics)

2nd wave IC
(Fairchild, Intel)

1st wave Defense

(HP, Vairan)
 Technology Innovation leads to
Product Innovation
Social
Networking
Internet

Microprocessors

Disk Storage

Integrated Circuits

Microwave Radar
 The two Steve’s create the first
Personal Computer, the Apple 1, 1976
First commercial Netscape browser
in 1995 brought the Internet to
the masses

Marc Andreessen
 Silicon Valley Fast Facts
• Silicon Valley Residents: 2.5 Million
• 15 cities in Santa Clara county
• But Silicon Valley keeps growing
• Valley now made up of 5 Counties
– Santa Clara County
– San Mateo County
– Alameda County
– Contra Costa County
– Marin County

• The Valley continues to grow in all directions

http://next10.org/sites/next10.org/files/silicon%20valley%20econ%20
snapshot.pdf
 Silicon Valley Top 10
1. Hewlett-Packard
2. Apple
3. Intel
4. Cisco
5. Oracle
6. Google
7. Applied Materials
8. Synnex
9. eBay
10.Gilead Science
As of Jan 2013

http://www.mercurynews.com/sv150
What makes Silicon Valley tick?
Risk taking: It’s ok to fail
Dream Big
Learn from your mistakes
Encouragement to be an entrepreneur
Results oriented meritocracy
Highly educated workforce and access to
university and government research
Abundance of capital (VCs, Angels)
Favorable labor laws: Easy to hire and
fire
City and State government encourages
startups with little red tape
Ecosystem of lawyers, accountants,
bankers, recruiters
Good Quality of life with easy access to
the beach in summer and mountains

for skiing
Easy to network with peers and culture
that thrives on innovation
Informal & Lack of Hierarchy
Free flow of information
 However, Silicon Valley is not paradise
• Since 2003, the region lost more than 300,000
jobs. Nearly 120,000 jobs were lost in 2010
• Offshoring & Outsourcing major trend
• Started with moving low end functions like Mass
Production, Quality Assurance, Call centers and
other job functions
• Now moving higher end to research, R&D, design,
back office, marketing, legal, healthcare
• There are no sacred cows.

http://techtalk.dice.com/t5/Silicon-Valley/White-Caucasian-men-the-
new-minority-in-Silicon-Valley-IT/td-p/289082
 Mckinsey expects global market
for offshore business and technology services to grow
to about $500B by 2020, from the current $80B/yr

http://www.mckinsey.de/downloads/publikation/mck_on_bt/2009/mck_on
_bt_16_india.pdf
http://www.ibsgr.com/our-business/key-facts-and-figures/our-markets.aspx
 Big Demographic shift, causing
underlying tension and ethnic enclaves.

• White Caucasians the new minority in Silicon

Valley IT (Non-white 63%)
• Latinos and Black poorly represented in high
wage, hi-tech paying jobs
• White 37%, Asian 30%, Latino 27%, Black 2%,
Other 4%

http://techtalk.dice.com/t5/Silicon-Valley/White-Caucasian-men-the-
new-minority-in-Silicon-Valley-IT/td-p/289082
 52% of startups founded by
Immigrants

Venture Beats graph

http://venturebeat.com/2012/10/15/how-indians-defied-gravity-and-
achieved-success-in-silicon-valley/
 High cost of living makes valley
unaffordable to those not making a
living wage

Family of four needs to make a min of $80,000 to survive

http://www.thedigeratilife.com/blog/index.php/2007/10/30/the-
minimum-budget-the-cost-of-living-for-a-family-of-four/
 What’s next

• Silicon Valley is more than just Hi-tech

• It is also a big hub for Bio-tech, Medical
devices, Clean-tech, Nano-tech,…
• Convergence of Hi-tech + Bio-tech + Nano-
tech,…
• Clean-tech and alternative energies
• Things we can’t predict, that’s why it is the
innovation capital of the world
 References
• All images are from public domain and
copyright of respective owners
• William Y. Jiang: Silicon Valley Competitive
Advantage and Knowledge Transfer
• Cathy Anterasian & Jeff Hauswirth: Lessons
From Silicon Valley
• Joint Venture: Silicon Valley Network
 Please share this
Favorite it, Tweet it, Facebook it. LinkedIn it

Buy the book “The Alchemy of Innovation” by Javed Mohammed on Amazon

For more information and resources or if you would like me to consult or

present please go to alchemyofinnovation.wordpress.com