Clustering in ICT: From Route 128 to Silicon Valley, from DEC to Google, from Hardware to Content

One of the pioneers in academic entrepreneurship and high-tech clustering is MIT and the Route 128/Boston region. Silicon Valley centered around Stanford University was originally a fast follower and only later emerged as a scientific and industrial hotspot. Several technology and innovation waves, have shaped Silicon Valley over all the years. The initial regional success of Silicon Valley started with electro-technical instruments and defense applications in the 1940s and 1950s (represented by companies as Litton Engineering and Hewlett & Packard). In the 1960s and 1970s, the region became a national and international leader in the design and production of integrated circuit and computer chips, and as such became identified as Silicon Valley (e.g. Fairchild Semiconductor, and Intel). In the 1970s and 1980s, Silicon Valley capitalised further on the development, manufacturing and sales of the personal computer and workstations (e.g. Apple, Silicon Graphics and SUN), followed by the proliferation of telecommunications and Internet technologies in the 1990s (e.g. Cisco, 3Com) and Internet-based applications and info-mediation services (e.g. Yahoo, Google) in the late 1990s and early 2000s. When the external and/or internal conditions of its key industries change, Silicon Valley seemed to have an innate capability to restructure itself by a rapid and frequent reshuffling of people, competencies, resources and firms. To characterise the demise of one firm leading, directly or indirectly, to the formation of another and the reconfiguration of business models and product offerings by the larger companies in emerging industries, Bahrami & Evans (2000) introduced the term `flexible recycling.’ This dynamic process of learning by doing, failing and recombining (i.e. allowing new firms to rise from the ashes of failed enterprises) is one of the key factors underlying the dominance of Silicon Valley in the new economy.