Path-dependency of transformational technologies

It would be historically naive to suggest that the present status of Silicon Valley as a technologically unrivalled region was the intended result of an instant process of industrialization and innovation. Technological hotspots do not originate overnight but are rooted in longer geographic and economic developments. In this chapter, we will argue that the growth of the hightech industry in Silicon Valley has to be understood from (much) earlier technological (and industrial) developments in this formerly agricultural region, some of which go back to the beginning of the 20th century. There is a certain pattern of path-dependency in successive (upstream and downstream) cutting edge innovation waves that made Silicon Valley into the number one innovation area in the world. Earlier vacuum tube radio technology was a fruitful breeding ground for later technologies such as microwave tubes, semiconductors, and integrated circuits. These later technologies, in turn, paved the way for the more recent hardware and software revolution which now brings about a non-stop stream of smart phone and other mobile devices apps.

The Valley's success has obvious historical antecedents that need to be highlighted in order to grasp its full meaning. We cannot understand the hightech revolution that the Valley witnessed in the past decades without looking at technological developments and innovations that fed this revolution. Silicon Valley has a geographic and economic history that is region-specific and therefore its innovation achievements are unlikely to be copied successfully by other areas. Replication of the Silicon Valley success story is not an option: history cannot be repeated. This in itself is an important policy lesson for regions elsewhere in the world that have grand innovation and growth ambitions. Advanced technological regions do not start from scratch but have to build on the available resources and circumstances, on elementary forms of existing ecosystems of innovation, entrepreneurship, and culture. There is no such thing as an innovation master plan, no one-size-fits-all approach.

But the argument of the need for historic sophistication goes further, much further even. The developments that helped to transform Silicon Valley into the innovation champion it is today, also foreshadowed basic elements of its entrepreneurial economy, its startup culture, its talent pool, its outstanding research universities, its VC funding agencies, its public and private R&D investments, and its support system and networks.