startups

What Makes Silicon Valley Different?

In September 2019, Richard Florida, Professor of Business Economics at the University of Toronto, interviewed historian and author Margaret O’Mara on the history of Silicon Valley for a piece in Bloomberg.com. 

For millions, the world has unpredictably changed since this article was written. However, when you observe the evolution of Silicon Valley – unpredictable change is on thing the infamous valley has historically proven to be good at.

For brevity and flow, we’ve pulled five questions from Richard and Margarets conversation. You can find the link to the full piece below. 

 

Like Detroit with automobiles or Pittsburgh with steel, Silicon Valley is synonymous with technology. In her book The Code: Silicon Valley and the Remaking of America, Margaret O’Mara casts a historian’s eye on the contradictions of this pivotal place in modern American history.

Although it is known as a hotbed of entrepreneurship, O’Mara shows the important role played in Silicon Valley by government spending, funneled through research universities such as Stanford or dispensed as federal contracts to tech firms. She charts how the Valley continually remakes itself, creating cutting-edge industry after industry—from semiconductor chips and personal computers to biotech, mobile devices, the Internet, and social media. She traces it from its birth in the military buildup of the 1940s and the Cold War, to the rise of entrepreneurs steeped in the Bay Area counter-culture of the 1960s and 1970s, to now, and the backlash against tech.

Richard Florida: Let’s start at the very beginning: How did Silicon Valley come to be?

Margaret O’Mara: The real turning point for Silicon Valley was World War II and the Cold War. If you go back to the 1920s, it’s the Santa Clara Valley, an agricultural valley in California best known for being the nation’s capital of prune production. During World War II and subsequently, this tsunami of military-related government spending starts washing over the Pacific Coast, directly investing in technology and science. It was part of the military-industrial complex.

The thing that set the flywheel in motion is big government. It wasn’t a matter of the president saying, “We shall build a science city in northern California,” which many world leaders subsequently have declared. It was a great wave of government spending that was done through universities like Stanford and Berkeley and through private industry and defense contractors like Lockheed.

 

Richard: How important are universities generally to the high-tech industry, and Stanford in particular to Silicon Valley?

Margaret: What people tend to overlook is the distinctiveness of Stanford. First of all, its ability as a private university to completely remake itself and to do away with certain departments—in ways a public university cannot or should not do—and [second,] its incredible, fiercely entrepreneurial approach from the 1950s. The attitude that, “We are going to partner with industry, and we’re going to build labs that train exactly the type of people you need.” That’s not necessarily something that every higher-education institution wants to aspire toward, but it is a key part.

Frederick Terman is the dean who built up Stanford’s engineering program in the 1950s. He grew up in Palo Alto, the son of a Stanford faculty member. He went to MIT for graduate school, and worked with the architects of Cold War science and tech policy. He writes to a colleague in the 1940s and says: We have a moment where Stanford could become a consequential world-class university like Harvard or MIT.

 

Richard: You point out that the Valley evolved alongside popular culture more generally, from the clean-cut military types of the 1950s to the hippies and counterculture types of the 1960s and 1970s.

Margaret: The first generation is very much crew-cut, white shirt, and narrow ties; they’re not particularly interested in formal politics. The next generation is counterculture, with a caveat. They’re part of the anti-war protests at Berkeley and Stanford. They want to affect social change, with computers being the tool. Once everyone had a computer, we’re going to rectify all the injustices.

This intense techno-optimism links all of the generations together. They share this belief that technology will be a means by which we make the world a better place. The politics and the messiness of social activism is orthogonal to what they’re trying to do. What we’re discovering now is that these technological tools have served to exacerbate some of the social divisions that their creators wanted to erase.

 

Richard: Seattle has generated some of the biggest and most important tech firms—Microsoft and Amazon, not to mention Boeing. Where does it fit as a high-tech center?

Margaret: Seattle has always been more of a big-company town than the Valley, in terms of the succession of an economy dominated and defined by a single industry or company: Boeing, then Microsoft, and now Amazon. The engineering capacity of Boeing continues to be a big factor in the economy. Seattle is also home to large outposts of every large technology company and to lot of smaller and midsize startups.

Roughly a quarter of those startups were founded by Microsoft alums. Seattle’s tech ecosystem is younger than the Valley’s. But there have long been interconnections between the Valley and Seattle. Some of Microsoft’s earliest venture investments came from Silicon Valley. Amazon also got a good chunk of its early money from Silicon Valley. Jeff Bezos in turn personally put an early stake in Google.

One of the things we’ve been tracking is the shift of high tech from suburban nerdistans to urban centers like San Francisco and New York. What does this say about Silicon Valley?

 

Richard: There isn’t a lot of diversity in Silicon Valley in terms of gender or race. Is that endemic, or are there any signs it may be changing?

Margaret: It is endemic, and it also is changing. Back in the ’50s and ’60s, a lot of the people who were seminal figures and investors went to Harvard Business School, but women weren’t admitted back then. Women also were not allowed to major in chemistry or engineering.

[There is] the tightly networked nature of the business—people hired people they knew. The intense work-hard-play-hard ethic has been a hallmark of Silicon Valley tech from the very beginning. They’re going drinking after work together. It becomes a very male-dominated world. Layer over that this incredibly competitive atmosphere of unvarnished criticism.

It’s no surprise that the women who endured were few and far between. A lot of them just say, “I’m not going to put up with this BS,” and then they move on. The 1960s Mad Men era of corporate America got trapped in amber.

But I do see things changing, and here’s why. Because if the winners of the last generation are picking the winners of the next generation, we now have an increasing number of women. They now have resources and are networked together; they’re creating their own version of the group. Yes, that can have its own biases and exclusion. But I am heartened by the fact that the Valley is talking about diversity or the lack thereof in tech in the last several years in a way that it had never talked about it before. 

The whole notion of tech being a meritocracy has gotten somewhat battered, as it should, because it’s not a meritocracy. Tech has become more and more the province of upper-middle-class people from upper-middle-class backgrounds who were able not only to get into an elite program at Stanford or MIT, but also to bootstrap a startup because maybe their parents are helping subsidize it.

We don’t talk about that enough when we celebrate entrepreneurs. That’s not to say you shouldn’t celebrate entrepreneurship and encourage people to take their innovative dreams and make them a reality. But you have to recognize that not everyone can do that easily. What are the ways that a society can help encourage and recognize where bias exists?

 

To read more of Robert and Margaret’s conversation on Bloomberg.com, click here. 

Post Your Comment




Leave another comment.

In order to post a comment, you must complete the fields indicated above.

Post Your Comment Close

Thank you for your comment.

Thank you for submitting your comment, your opinion is an important part of SandHill.com

Your comment has been submitted for review and will be posted to this article as soon as it is approved.

Back to Article