Johns Hopkins Gazette: May 12, 1997

Recreating Silicon
Valley Not Easy Task

Emil Venere
News and Information
For industry and education leaders trying to create their own versions of Silicon Valley, Robert Kargon and Stuart Leslie offer a word of caution: easier said than done.

The two historians, who specialize in science and technology, have investigated why it is so difficult to recreate California's vital high-tech center. Silicon Valley owes its unparalleled success to an unusual interplay between corporate and university researchers and a truly unique set of circumstances, they concluded in a paper to be published next month.

"No one actually has been able to successfully replicate Silicon Valley, including the original father of Silicon Valley," said Kargon, a professor in the History of Science, Medicine and Technology Department.

Most Silicon Valley employers are headquartered there, many of them beginning as small firms that quickly grew large and successful during a Cold War era of big defense spending.

"There were millions and millions of defense dollars flowing into that area after World War II; that is a circumstance that is not likely to repeat any time soon," said Leslie, also a professor in the same department and assistant dean of undergraduate studies.

Other regional high-tech centers, such as Research Triangle Park in North Carolina, attract established firms by offering low taxes and other incentives. That strategy has been successful, creating many jobs and bolstering the regional economy. But the companies are based somewhere else.

"They are not self-generated," Leslie said. "That means that it's always going to be a satellite to someplace else, where the ideas are created."

The historians explored Silicon Valley's most vital components and various attempts to develop other regional high-tech centers based on its model. Their paper will appear in June in Business History Review, a quarterly journal published by the Harvard Business School.

Silicon Valley's genesis was in 1951, when Stanford University created the Stanford Industrial Park. It was the earliest effort to foster academic-industrial cooperation by developing a high-technology park on university land. Now the park's 59 tenants, which include such prominent firms as Hewlett-Packard and Lockheed Missiles and Space, pay about $1.2 billion a year in payroll and benefits to some 28,000 employees.

One of Silicon Valley's key ingredients of success has been a rare symbiosis between industry and university researchers, two cultures that often clash.

"A university culture has traditionally put theoretical work and pure work ahead of applied work, and frankly has had very little sympathy for proprietary research, which usually has been thought of as being at odds with the notion of academic freedom," Leslie said. "They want to publish."

"In industry, publication is not a priority," Kargon said. "In fact, sometimes you want to keep secrets, and that's against the university culture. How do you bridge those things?

"Just as universities have to be more sophisticated about industrial needs and aspirations, the reverse is also true. Industry has to be much more sensitive to the kinds of limitations and aspirations of universities. When that happens, very fruitful partnerships can emerge."

Another crucial element is cooperation between corporations. The Silicon Valley model requires an unusual relationship in which companies are willing to share information to achieve common goals. Many of the firms grew up together as the university matured. The result is a critical interweaving of corporate and university resources, which is sorely lacking in other high-tech centers.

Even the man whose vision spawned Silicon Valley, Stanford University electrical engineer Frederick Terman, was unable to successfully copy his creation anywhere else in the United States. When he tried to duplicate Silicon Valley, Terman tended to overestimate the importance of having a particular kind of educational institution as the catalyst, while underestimating how hard it is to convince competing firms to cooperate, Leslie and Kargon said.

Despite help from Bell Laboratories and Texas Instruments, efforts during the mid-1960s to foster high-tech centers like Silicon Valley failed in New Jersey and Texas. Lacking any Stanfords of their own, industry leaders set out to actually create new educational institutions to train scientists and engineers. The new schools would be free of the usual barriers that stymie corporate-university cooperation. But those institutions failed for lack of sufficient funding and corporate support; companies with a history of independent research and development labs could not get used to sharing ideas so freely within an academic environment.

Perhaps Terman took on the challenge as he would have tackled an electrical engineering project; if the schematic contains all of the necessary components, the system should function well.

"It doesn't really work that way," Kargon said. "You really need to slowly grow the relationship because of the culture differences between universities and industry. I think it really helps to build mutual respect, and that takes time. It takes a lot of history. That happened in Silicon Valley." Terman, who died in 1982, did eventually apply his model successfully, but not in the United States. His ideas have worked in South Korea, where a strongly interventionist government fostered, "if not compelled," fierce competitors such as Samsung, Goldstar and Hyundai to work together, Kargon and Leslie said in their paper. The Korea Advanced Institute of Science was founded to provide training for scientists and engineers, interacting extensively with Korean industry. It eventually was moved from Seoul to the Taedok Science Town, a center of national laboratories and research institutes located about 100 miles south of Seoul.

Meanwhile, back in the United States, cost-cutting priorities in recent years have made corporations more willing to work with each other and to team up with universities.

"I think many industries are more open to that kind of collaboration than before," Leslie said. "They want to cut back their own basic research efforts."

For example, in Rochester, N.Y., Eastman Kodak Co. and Xerox Corp. have decided that they need to leverage their investments by working together with area universities, he said.

Perhaps such a spirit bodes well for future attempts to develop regional high-tech centers. Hopkins President William R. Brody, in his inaugural address on Feb. 23, alluded to his own interests in that arena.

He said in his speech that universities and corporations in the corridor from Washington to Baltimore could one day work together to develop technologies and products associated with education, telecommunications and software, forging "the Chesapeake equivalent of Silicon Valley."

An alliance of university and corporate partners could provide significant economic benefits to Maryland and the mid-Atlantic region, Brody said.

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