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Historians Weigh Forces That Shaped Silicon Valley

Dec 21 2017

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Which of many factors was most responsible for the postwar rise of Silicon Valley? Was it the unleashing of investment capital? Cold War-era military spending? Immigration policy, the rise of the counterculture, or even the decisions of Stanford University administrators? The historians Leslie Berlin and David M. Kennedy pondered these questions and persistent myths like that of the “lone inventor” at an event celebrating Berlin’s new book, “Troublemakers: Silicon Valley’s Coming of Age.”
 

How Technology Rises (and Falls?) Leslie Berlin and David M. Kennedy in conversation at Stanford’s CEMEX Auditorium on Nov. 13. What lessons can we draw, Kennedy asked, from the decline of Kodak’s technology hub in western New York, above. Complete video of the event is available on our website. Geoff McGhee

By Surabhi Balachander

On November 13, 2017, the Bill Lane Center for the American West and Stanford Libraries hosted Leslie Berlin in conversation with David Kennedy. Berlin serves as Project Historian for the Silicon Valley Archives housed within Stanford Libraries, and has held this position since completing her PhD in History at Stanford in 2001. Kennedy, who is Donald J. McLachlan Professor of History, Emeritus, as well as Director Emeritus of the Bill Lane Center, served as her doctoral advisor. To Berlin, he said, “It’s a great honor for me to be here with you, and to see that a former student is doing so very, very well.”

The conversation centered on Berlin’s new book, Troublemakers: Silicon Valley’s Coming of Age, which focuses on seven individuals who were prominent figures in the development of five industries – personal computing, video games, biotechnology, modern venture capital, and advanced semiconductor logic – that define Silicon Valley today. Within the span of seven years in the 1970s and 1980s and within a thirty-mile radius, Berlin argues, these men and women transformed the world.

Why this place? Why this time?

Kennedy framed the conversation by discussing Rochester, New York, which lies near the Erie Canal. Once considered one of the world’s greatest engineering marvels, the Erie Canal became obsolete within years, and is now the site of a recreational bike path. In the years immediately following World War II, Kennedy noted, Rochester was a major technological center, the home of Polaroid and Eastman Kodak.  He showed photos of Rochester today – postindustrial, in decline. Kennedy challenged the audience to imagine the same for Silicon Valley in 100 years, suggesting the image of self-driving vehicles passing the empty shells of tech companies along Highway 101. “Most historical eras do come to,” Kennedy said, “if not a conclusion, a cadence.” The big question of Berlin’s book, as Kennedy saw it, is this: “Why did Silicon Valley take root in this particular place at the particular time that it did?”

Berlin’s book opens in 1969, when, in her words, “Silicon Valley still wasn’t called Silicon Valley.” She briefly spoke to the Valley’s agricultural history, noting that at that time, the area was known as the “Valley of the Heart’s Delight” and primarily consisted of stone fruit orchards. In 1969, Hewlett-Packard was already 30 years old, and microchip companies were in their second generation, yet, as Berlin described it, technological industries operated mostly “gearhead-to-gearhead” – microchip companies would sell to microchip users. “The notion of a computer was almost entirely abstract,” Berlin explained, “or it was something like HAL, from 2001: A Space Odyssey.” No one could imagine having one in their home. Berlin shared the image of the first personal computer she could find – the Honeywell Kitchen computer, advertised in the 1969 Neiman Marcus Christmas catalogue alongside other impractical items such as baby elephants. The computer cost $10,600, or $70,000 in today’s dollars. Within decades, Silicon Valley made the personal computer concrete, affordable, and ubiquitous. Berlin’s mission in Troublemakers was to trace the transformative forces in this interval.

Major players behind the scenes


Leslie Berlin
 

When selecting the seven figures to profile in her book, Berlin used three criteria: that they represented something important about the Valley and its history, that they were largely unknown, and that they were genuinely fascinating stories in and of themselves – “real narrative arcs that you could follow.” In framing the history of Silicon Valley, Berlin was careful not to over-represent famous innovators. Berlin used a metaphor to explain the reasoning behind this choice – “Innovation is like a baseball game where the pitcher has thrown a perfect game.” The pitcher’s teammates, such as the catcher or outfielder, make calls and plays that make the perfect game possible, “but all that goes into the record book is that the pitcher threw a perfect game.” According to Berlin, innovation is typically recorded in the same way. Berlin’s mission is “to talk about the engineers who no one ever hears about, the people who were behind the scenes.”

Berlin emphasized the sociopolitical climate of San Francisco and the Bay Area in 1969, a year of massive protests and marked “animosity between authority figures and the young people.” This animosity, Berlin argues, had practical impacts on the development of Silicon Valley – because of it, young technological experts who would once have pursued careers at the Department of Defense or in a university lab were determined to “go their own way,” and instead went to work for independent, high-tech companies.

The federal government, in Berlin’s view, was also a major player in the development of Silicon Valley: “It’s not a stretch at all to say that Silicon Valley exists because of the federal government.” The Department of Defense started Arpanet, which eventually became the Internet. The federal government bought all of the first microchips to be produced, as the production process was prohibitively expensive for any other investors. Berlin argued that “the federal government served, in a way, as the major venture capitalist.” Later, the government reformed laws that had prohibited the use of pension funds in high-risk investments, allowing for venture capital as we now know it to take root.

Returning to Silicon Valley’s geographic location, Berlin argued, “Technology [plopped] down at the same time that the area [was] starting to industrialize.” The ongoing transition away from a rural economy allowed for a “custom-built environment” for Silicon Valley – infrastructure was built around industry. The Bay Area also allowed for serendipitous, behind-the-scenes interactions – “parents meeting because their daughters were in the same class, or because they attended the same religious services” – that led to great technological partnerships.

Leslie Berlin and David M. Kennedy.

Stanford’s Part

Kennedy made sure to ask Berlin about Stanford’s role in the history of Silicon Valley (cue video), saying, “Part of our on-campus mythology is that Stanford spawned Silicon Valley, or midwifed it.” Berlin mostly concurred: “Stanford led the way in patenting innovations to come out of university labs,” so as to benefit the university as well as the inventors. Berlin elaborated that before Niels Reimers established the Office of Technology Licensing in 1970, “in the previous 13 years, Stanford had earned $3,000 total from all inventions by faculty, staff, and students; within a year of the establishment of that office, the university had earned $55,000.” Now, Stanford’s earnings include revenue from their stake in Google and the recombinant DNA patent. “At this point, the OTL has brought $2 billion into the university,” Berlin said. She noted that establishing this office took hard work. Universities such as Stanford experienced many concerns and pushback, both on inventions – protesters compared recombinant DNA to Hitler’s wish for the perfect human race – and on ideology – whether these offices would undermine the fundamental mission of universities, pushing them to back only the most profitable ideas. Reiterating Berlin’s major theme, many of the most crucial moments in the history of Silicon Valley occurred behind the scenes.

The Role of Immigration, and of the American West

Kennedy asked Berlin about the role of the “West,” as a region, in the formation of Silicon Valley. “Is there anything to that at all?” Berlin said yes, there is. “The notion that you move beyond existing barriers and you create something new,” in the tradition of pioneers and the “wide open spaces” of the West, certainly connects to Silicon Valley’s pioneering spirit. Berlin brought up a point Kennedy had raised as her advisor: “It’s also not “west” for everyone who comes here.” Coming from Asia, it’s east; from Latin America, it’s north. “[Metaphors of the West do not] necessarily [resonate] with people from other places.”

Along these lines, Berlin identified immigration as one of the most important forces in Silicon Valley’s history. According to her, immigrants have served “as a vital refresh in the system” of the Valley. When Troublemakers opens, Silicon Valley was already in the midst of a massive wave of young, well-educated immigrants – “the equivalent of one new person moving to the Valley ever fifteen minutes for twenty years.” This immigration was initially from within the United States, but quickly became primarily international. Kennedy and Berlin both pointed to Silicon Valley’s ability to recruit top-class talent from all over the world as crucial in the region’s success. “Two-thirds of men and seventy-six percent of women who work in tech in the Valley were born outside of the US,” Berlin said. “No immigrants, no Silicon Valley. Full stop.”


Simon & Schuster
 

Our Historical Moment

The Bill Lane Center and Stanford Libraries co-hosted the conversation, which took place in the heart of Silicon Valley before an audience of over 400 people. Berlin and Kennedy emphasized that there has never been a more important time to discuss the history of Silicon Valley. To reflect this moment, Kennedy read from the introduction of Troublemakers: “’When five of the six most valuable companies on the planet are high-tech firms, three based in Silicon Valley; when the high-tech sector accounts for nine percent of US employment, seventeen percent of gross domestic product, and sixty percent of US exports; when four hundred hours of video are uploaded to a single platform, YouTube, every minute, and more than 200 billion emails are sent every day; … when United States manufacturing jobs continue to disappear, many of them lost to automation …’ in light of all that, Leslie says, it makes sense to ask how we got here.”  

Complete video of the event is available on our website. To learn more about the book, Troublemakers: Silicon Valley’s Coming of Age, visit Leslie Berlin’s website.