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Previous Research on Silicon Valley- 2/5

Updated: Jul 10, 2023

In her book, Saxenian examines Silicon Valley from the perspective of "industrial systems" and emphasizes the relationship between firms' internal organization, their connections to each other, and the social structures and institutions of the region. She identifies three dimensions of a region's industrial system: local institutions and culture, industrial structure, and corporate organization.

Saxenian argues that when production is integrated into regional social structures and institutions, firms compete by leveraging local knowledge and relationships to create innovative products and services. Industrial specialization becomes a source of flexibility rather than fragmentation. She believes that a region's industrial system is not defined by a single technology or product but by the competence of its constituent parts and their interconnections.

The book highlights the importance of the locality's hard and soft capital, discussing organizations such as HP, Digital Equipment Corporation (DEC), and offshoots of Fairchild Semiconductor Corporation, including Intel Corp. It mentions the role of influential figures like Terman, who was involved in the West Coast Electronics Manufacturers Association and served as Deputy Secretary of Defense under President Nixon.

One intriguing aspect of Saxenian's work is her exploration of community building and leadership styles in Silicon Valley. She examines the leadership of Ken Olsen at DEC, portraying him as a benevolent patriarch who occupied an old mill. She describes DEC's strong loyalty to the company, stating that those who cut ties were not welcomed back. The influence of local industry oligarchs and the spillover of leadership from the East are also discussed.

The text briefly mentions an anthology called "Understanding Silicon Valley: The Anatomy of an Entrepreneurial Region" edited by Martin Kenney. It covers the history, legal and financial institutions of Silicon Valley, but lacks commentary on religious institutions and practices. However, it does acknowledge the military foundations of the region as an important part of its history.

Ken Olsen posing in front of the DEC headquarters was formerly a wool mill in Maynard, Massachusetts, from 1957 until 1992. Photo courtesy of Computer History Museum.

One aspect of Saxenian's work that is especially fascinating is regarding community building and leadership styles in the Valley. This concept was elaborated in two cases: Digital Equipment Corporation (DEC) under the leadership of Ken Olsen, and Robert Noyce & Intel Corporation. Saxenian points out that Olsen was a "modern-day" Puritan and occupied a 200-year-old Assabet Mill, a former site of the American Woolen Company off Route 128. Saxenian says, "Olsen's role was that of a benevolent patriarch, the brilliant, demanding, but supportive father figure." Looking back, Saxenian goes on to reminisce about DEC's sacred command. She says, "If you were stupid enough to cut yourself off from the Mother Church, Digital's attitude is don't bother to come back" (87). There was a dependence on local oligarchs of industry, and there was a leadership spill-over from the East, at least in the early days of tech industrialization.

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