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How Silicon Valley Became a Special Place
1. How Silicon Valley Became a
Special Place for Innovation
and Entrepreneurship
Richard Allan Horning
SNR Denton US LLP
Silicon Valley
Richard.horning@snrdenton.com
5. INNOVATION
Innovation is the specific tool of
entrepreneurs, the means by which they
exploit change as an opportunity for a
different business or service. It is capable of
being presented as a discipline, capable of
being learned, capable of being practiced.
(Peter Drucker, 1985, Innovation and Entrepreneurship)
6. ELEMENTS OF AN
ENTREPRENEURIAL ENVIRONMENT
• Perceived Opportunities
• Culture of Risk Takers and Respect for Failure
• Support Infrastructure
• Propagation of Knowledge and Skills
• First Class Educational System Encouraging
Entrepreneurship
• Capital and Liquidity
• Rewards and Honors
• Repetition and Reinvestment
7. THE INVENTION OF SILICON VALLEY
Don Hoefler, “Silicon Valley USA”,
Microelectronic News, January 11, 1971
8. EARLY OBSERVATION OF
THE OPPORTUNITY
“In the hands of an enterprising people, what a
country [California] might be” -- Richard Henry
Dana, Jr., Two Years Before the Mast (1840)
9. A VAST WASTELAND
“A village of 600 to 800 inhabitants …
with thousands of ground squirrels
burrowing in the plaza” – description of
San Jose in 1846 when the population of
all of California was 7,500
“Not a single modern wagon to be had
…, nothing but the old Mexican cart with
wooden wheels, drawn by two or three
pairs of oxen yoked by the horns” -- Lt.
William Tecumseh Sherman, reporting
on Monterey in 1847
10. JANUARY 24, 1848
Eureka !
“Gold Mine Found”, The Californian, March
15, 1848
“California, no doubt, is rich in mineral wealth;
great chances are here for scientific capitalists”
11. CALIFORNIA IN 1865
• Population has soared to 365,000
• Wheat crop more valuable than gold
• Manufacturing revenue $20M greater than
gold mined in foothills
25. THE IMPORTANCE OF NETWORKING
“In the early days of the semiconductor industry
there were certain places that everyone frequented
and the standing joke was that if you couldn’t figure
out your process problems, go down to the Wagon
Wheel and ask somebody.”
Annalee Saxenian, Regional Advantage (1996),
p. xi
28. THE ROLE OF PROXIMITY
IN INNOVATION
“To the extent that product and process
innovation is based on new ideas and that the
creation of ideas is a social process involving
discussion, then geographic proximity is
important in innovation”
Michael Best, The New Competition: Institutions
of Industrial Restructuring (1990), p. 235
31. THE GOLD RUSH LEGACY
Business & Professions Code Section16600
“Except as provided in this chapter, every
contract by which anyone is restrained from
engaging in a lawful profession, trade, or
business of any kind is to that extent void.”
36. WHY SILICON VALLEY SUCCEEDED
• "It's the regulatory environment, the cultural
attitudes, the social and professional networks
that connect people. It's the attitude toward
failure - how you deal with that. Those are things
that are much harder to change than it is to build
up the research facilities."
Prof. William Miller, Stanford