Regional Advantage: Culture and Competition in Silicon Valley and Route 128

241 Pages·1996·2.54 MB·English

by  AnnaLee Saxenian

B
REGIONAALD VANTAGE
CULTUREA ND C O MPETIOTNI IN
SILI OCN VALLEY AND R OUTE 1 28
ANNALESEA XENIAN
HARVARDU NIVERSIPTRYE SS
CAMBRIDGMEA,S SACHUSEATNTDSL ,O NDONE,N GLAND
ToJ AMIWEH,O S ETT HED EADLINE
ANDT OM ARTYW,H OH ELPEMDE M EETI T
Copyrig©h 1t9 941,9 96b yt heP residaenndtF ellows
ofH arvarCdo llege
Allr ighrtess erved
Printiendt heU niteSdt atoefsA merica
Nintphr int2i0n0g0,
FirsHta rvarUdn iversPirteys psa perbaecdki tio1n9,9 6
LibraorfyC ongreCsast aloging-in-PuDbaltiac ation
SaxeniaAnn,n aLee.
Regionaadlv anta:gc eu ltuarned c ompetition
inS ilicVoanl leayn dR oute1 28I A nnaLeSea xenian.
p. cm.
Includbeisb liograprheifcearle nacnedsi ndex.
ISBN0 -674-75339(-a9l kp.a per)
ISBN0 -674-75340(-p2b k.)
1.H ight echnoloignyd ustries-CalNiofrotrhneiran,.
2.H ight echnoloignyd ustries-Massachusetts.
3.U niteSdt ates-Econocmoincd itions-1981-
-Regiondails parities.
I.T itle.
HC107.C22N67179 94
338.4'762'000979473-d9c32-03 9416
Designbeyd G wenF rankfeldt
C ONTENTS
PREFACET O THEP APERBACKE DITION VI
PROLOGUE x
INRTODUTCOIN: LOCALI NDUSTRIASLY SETMS
1 � GENSEI:S UNIVERISTEIS,M ILITARSYPE NDI,N G
AND ENTRERPENEURS 11
2 � SIILCON VALLE:Y COMPETIOTNI AND COMMUNTIY 29
3 � ROUTE1 28:I NDEPENDENCAEN D HIERARCHY 59
4 � BETTING ON A PRODUCT 83
5 � RUNNINGW ITHT ECHNOOLGY 105
6 � INISDE OUT:B LURRING FRIMS'B OUNDARIES 133
CONCLUISON:P ROTEAN PALCES 161
NOTES 171
HISTORICALD ATA 207
DEFINITIONS ADN DATA SOUCRES 209
ACKNOWLEDGMENTS 218
INDXE 220
PREFACET O THE
PAPERABCK EDITOIN
� Ine ar1l99y 5a,j uornaflriosBmto s tong gseusttheadRte g inoalA d­
vantagew asa lrye oaudtdda.Ht eec laimtehdat th eb oookf rfeeda n
accuartiepf,a inpfourlt,r aoyfta hlee x epirnecoe ft hReo ut1e82 e ocn­
omyt hrouhg the 198s-0butt hatthe situahtaidfo unn damentally
chnagesdi n1c9e9 0H.e p oinetdt os eevrarle ctes notfwaraen dn et­
workisntga- rputst,h feo rmatoifno enwb usisnsea ssioaictonasn,dt he
rsetrtuucrionflg a rfigrem lsi kteh eD igitEaquli pmeCnortpo ration
(DECa)se videonfac t eun rarouonftd h ree gioenocanolm y.
Thivsi e,cw ommoinnt hBe ostoanr etaoa d,yp osaed se peer aclh­
lneget o tahreg umaednvta nicnet dh ibsok o thamna yb ee vidaetn t
firsgtl an.Ic fte hReo ut1e82 cthenoliongdyu shtarrsybe ounedd,t hen
eihtetrh oer igcilnaailom fts h beoo kw erwer onogrt he ornse'c guitlure
andi nstithuatvibeoe nnet sr ansfdo.Tr hmefe ormoefrc ,o uer,is sm ore
likeAlfyt.e rR egainloallA, dv atnagceo nlcudtehsan to thilnegts hsa ann
openinogft hbeo nudaireasm ontgce hnolbousgiysn seeasnd b etwene
thseefi rmasn ds urrdoiunnfign anceidacula,t ioannadpl ub,l iscce tor
institwuitleilno anbstl here e gitoocn o pmeete fcfteivweiltyShl i icon
VallIetiy sd. i ffictuoil mta gianb eui senscso mmunoivtreyc omiinng
suhc bar iteifm teh ceu lrteau ndp rtaiccoefss e rcceys,e fsl-ufifciecn,y
andrs ika-veiroscno nsenitsldtyi sypelbday fi rmasn d eorit nhstitutions
inR out1e82 .Ind eetdh mee chaniosfsm osic al iannsdt itcuhtainognea l
woulnde etdob ef amro refl exitbhlaeInh avaer gufeodsr u hc cah ange
too ccur.
Thea vaildaabtlhaeow, e v,ed ron ostpu portth neo tioofan r egional
turnuanr.doI nf acitnt, h peer iofdr o1m99 0t o1 992( htem osrte ecnt
dataav abillaeatt hsiw ritiRnogu)t1,e82 l ossotm 9e3, 7j5bo si nt ech­
nolosgeytc orrsa ngifnrgoc mo pmutearnsdc omumnicateiquoin­ps
,
mentt oe lcetrocnoipmcon etn,sa erpoacsea,n di nrsutmenatnsda, d dde
onl1y0,4 8n ewj bosi n sof(tesweHa isretr oicDaatla. )
PREFACE .... VII
Eveinft he dantoait n ddoi cara cetoev reyi,st heorteeh re vidence
thatth Reo tue1 82r egiiorsne inveinsttleifLn?ag y oafttf hsme i nicom­
putefirr mhsa ve spaaw nneewgd e enratoifoc no mpanmiaensyo, f
whicahr er ejteicntgh em anagemmeondte ls opfr etdhseoescsrie.r
ChipcoCmor portaioan m,a nufacotfunr eetrrw koinhga rdwafroer,
exampwlaess, t aritne1 d89 3b yv ertaenosfD ataG eneraanld D E.C
Whilcea pitaolnil zoicneagxpl er tiisnce o pmutenre wtorkinCghi,­p
comf'osu ndaesrssi dsulayov uiodevde rtiinctaelg raantdmi aoinn tained
opecno rporate sbY.oe uatns wd iattrhhi reee gion'sst a-orputtsh,e rt he
queisotnr emaiwnhest heevre enn lightfiernmlesid k Cehi pcocma n
compewtiet hotuhated vtaganeosfa s puportirveeg ioennavli ronment,
particuwlhaerntl hye ciorm petdirtaoowrn s ainn dtursiianlfs rtacr­u
turaen dc ulttuhrabetot hd emandasn dfa citlerisat pacihda nogpee,n ­
ness,l eananirdn. g
Sveeroatlh ceorpm utenre tworfikrimnwsge rset rateidnt hReo ute
128r egidounr itnhg1e 890sB.yt heear l1y99 0sh,o wevtehrde,o m i­
nanptal yerisn t hbeu nseis-sCisc3oC,mo ,a ndB ayN ewtorks-were
badsi enS liicYoanl .l eAyinnd1 99,C 5hipcowma sa cquibry3e Cdo m.
Them ergceodm painnsyo w thoend l saerscgtpe layear$ 01ib ni llion
marktehtai tsg rowimnogr teha n3 0p erceanntn lulaOyn.c ea gaiinn
thceo pmutneert rwkoisnegtc oras, wsimetihc onduicntt hoe1r s69 0s
andm icropsrsroob-caseecdo pmuteirnst h1e 890st,h cee nrto efg ravity
in day namniecws �ctor hadse icssihvitefotlt hyewe de s t.
Chipcoimsn ot iaosnl ateexdap mleF.ir mtsh at hwaeeirdlea st he
upcomisantrgos f R otue1 82,f roPmo werstooWf etll leefth,a vbee en
acquibryeo drm erdg ewitShli icYoanl lceoypm aineso;t helrisk e
ThinkMiancgh inaensdI e(ndaSlqular eR esaerchha vgeo noeu t of
busiensEsv.e Lno tDuesv elopmtehnrete ,g ioonnl'nysa tionraeolcgl­y
nziedsf otwacroem pnyaw, asa qcuirbeyId B M.T hseea cuqsiitioofn s
eascto acsotm piaenbsyS liicYoanl lceoym petfiutrotrshsle orcw u ltural
chanigneR out1e82 .W hene asctoa scto mpanaireeas c quired the
cetneorf gravmiatnya gfeomiren nvta risahbitlfoytt shw ee s,dt imin­
ishitnhgle co aslpu ployfm angae.rT sodayt hearreve e rfye wp epole
int hBeo sotna raew hoa rep eeirxencienrd u nnibngigh ealttheyhc ­
nolocgoym piasen.
Nori st hitsr elnidk etlocy h agne.T odaSyli icYoanl lbeoya sftasr
morseat r-tpusi nk eya reasn eltiwkoer kwiinrgse,lsc e ommuantiicons,
multidmiaean,id n teranppeltoi nc.saA tsi tihn1e 9 80mosr,te h atnrh ee
timeassm anyv entucraep idtoalll aarrbese i ngi nvseteidnS liicon
Vallteceyh nolsotga-yrpu tst hainnN ewE nglavnedn tsuM.ro ereover,
VIII� PREFACE
thceo nevsratiosftm h eea scto avsettn urcea pictoamlm unmiatkyse i t
veryd ifficfuoclrot m pantiheabstol dldye nfien ewm arkettogs a in
fund:ie nngtrreepneswu irtgho doi deasR oount1 e2 a8r eei etrhf oerdc
tos cadloewn t hevisiri oqnu icokrhl yo ok wuiptv he tnurcea piftraolm
thwee sta nd caornev intcome odv eto t heV allTehyih.se p lse xplain
whya,s ifdreo Lmo tuisti, sd iffictuonl atm ea n ationsauclceslsyf ul
Rotue1 2s8fot wacroem pa,wn hyiSlliei cVoanl lheapysr oducekde tm ar
leardsle ikNees tcaep,O ralceI,n tuaintdA, d boe.
Thef ormatoifto hnMe a ssachsuettsS oftwaCrouen cialn dt hMea ­s
scahustetTse cloemmunicaCtouinocnaisrlp e os itsiivgeon fcs h aen gin
three ogniT.h esger ouhpasv reje cetetdh oep positpioolnioatfli ctsh e
MasshaucstesHt igThe chnoClooungcyia ln di ntseapdro vieds pupotr
sevriceansd n etwkoirnogp portteiusnf iorl oaclfi rm.s Mosts i­g
nifictalntyh,e hya vdei steadtn hcesmelvfersotm h seh otsr-itgehtda x
cuttaignegn tdhaah ta ism opveirshtehdre e ognis'p ubliicn stiiot.nu st
Theq uetsiorne maiwnhest htehrse e naeswsi oactiaonndos ht esrw ill
bea blteoc erataeb roacduelrt oufcr oel laboirnta htreie ogni. on
Iti sp erhatpesll intgh at wRehgiinloaleA dvatnaghea psr ovoskie­gd
nificiatnnetr aemsotn rge igonpaoll -imcaykearnsdb usisnsee xceuvteis
froOmre gont oN ewM exitchoe, resopfto hRneos uet 1e2 c8o mmutyn i
tot heb oohka sb eelna rgienldfyie nfrtei,fn oth ost.iI lnep artt,h is
relfetcst hei nlsauroift y oaln-di lnien druisactlo mmnuitty-hve eyr
probltehmbe o odke rsbicesB.ut �e ixposaed se epperro blaeswm e ll:
thaebs necoef o pportuinnti htreie eigso fno cro lledcitsicvuness. s iIon
SliicVoanel yla m yraido ff orubmrsi tnogg etihnedri vifdruoadmli sf ­
fertefi nrms ianndsdrut iefsr,o pmu bcla indp rivsaettceo rasn,df rom
financeidacualt,i onaanldt, r ainiinnsgti inots.u teTshgea therbiotnhg s,
formaanldi nforemnaalb,il ned diuvai-losftedne tmeirnecdo mepti­
tors-dtsiouc scso mmopnr obledmebsa,ts eou ltioannsdd, e nfiet he
sharieddet nittiheaestn ablien dauns ctormimauln tiotta ryn scetnhde
itneerssot fi nedpentdfi ernm.sO nlys uhca ni ndtursicaolm munciatny
ceratea ndr ercearteeg ioandavla ntiantg oed acyo'msp etgiltoibvea l
econyo.m
,hTeJ aapnerseeps onsteo R egoinlaA dvantargeem aimnoss t st.r iking
Althotuhgbeho kob aremleyn tiJoanpsa inht,a gsen erdar teemarkable
ands uasniteda ttenftriooJmn�a a nseep olilcey adaenrdis n dusetxr­y
euctivaeg sr-opu thahta rse paeteddlemyo nstriattaseb di ltiot aylr ne
quciklfyr ofmo reiidngunrs ital enxcep.e rie
PREFACE....
IX
Theg realtoen-sgttme rtrhetasto tSlhiiec Yoanl leeocyn omayr neo t
simpflryo Jma pa(nna dt hre esotf aA,)sh ioweevrC.ol sret oh ome,
conteidnr ueudctioinnps u blfiucn difnoCgral iforenduicaat'iso inna­l
stitu-tfirooinmts esel metnarayn ds ceondasrhcyo otlost hsepo histi­
ctaende twoorfck o mmunciotlyl se,sg teautnevi ersiietasn,dt he ­Uni
versiotfyC alifosrynsita- ejmepoarditzheer icshu pplyt ecohfn ical
taleanntdt hrese eracbha steh ahta vhei sitcoarslulpyop tretdh re e­
gioneaocln oym.
NonheetleSslisi,c Yoanl lceoyn teisnt uofl orusihi nt he1 990sB.y
1994,t wenotfty h ree giso cnth'enolcoogmyp anbioseatse mdo rteh an
$1b illiinso ansl ( eocmparteood n lfiyve i nt hReo ut1e28 r eognia)n d
collecStliiivceVolanyl lteceyh nolfiorgmyss ur pass$e1d60 billiino n
sasl.Te hseefi rmsa ree xpandtihnreg ti isew ith Ptahcei Rfiicm ­
explotihteiaincrgc etsois tb soo minmga rkeatndsah ighslkyi lAlseida n
worokrf.cM eorevoe,rt hteh reeea-oryl-Jdo iVnetn t:uS rlieicVoanel yl
Netwohrakse ngeadgl iteralleyd osf hp uonlydi-rcamkeresnr,te rpe­
neuresxc,eu vteisc,o nsul,at nadne tduscationro sn goienfgf otroet ns­
hancteh ree gicoonl'ls aboardavtainevt.ea g
Ins horitm,p ortoarngta nizaatnidco unlatldu irfarflee nscc eontinue
tod efinet hdei verfgoeurnnttse tohf eSl iicVoanl laenydR out1e28
eocnomsi.Teh idso enso t mean thiasnt o ptc ohisalbsn.egC eul utrse
andi nstitaurtneio ostnt sa ttihce,y caornet incuraaeltleaydn dr erce­
atde throucgohn flanidcs tt rugagswl eel als r outsi,hn aebiatnsd,
praccet.sAi sa natoiftv heBe ostoanr ,e amIa yw ish tthhReao tu te
128r egitounr instsle fa rouqnudi ckalsay s;hc olaIkr n,o wt haitti s
likteolt ya kdeea cdetsoo vercotmheme a nagempernaitcc ste,cu lture,
andi nstittuhtahitao vnhesni dertehdre e giiontn h pea .s t
San Farncisco
Augu1s9t9 5
PROLOGUE
� JeffIra(elybs irgenferdot mh Dei giEtqauli pmCeornpto raitnti hoen
sprionf1g 89 7I.a( lwba so neo ft hmei nicpoumtgeira nrti'sssi tnsga, r
andh sid epratuwraesy eatn otbhleorw to a tchoahmtap dra encye ntly
losdtoz enosft alenetxceeudt si.vF erutasrteadn db unredo ut,Ia (lb
retnuerdt oh is nCaatliivfeo jrinoniiatn,hg ee x odoufes n ngieefrrso m
thtee hcnoolgyr egiaornon udR out1e2 i8nM asshauecstttsoi tWse st
Coascto unterSlpiiacrVota,nl .l ey
Ia(lbm'osv refle etcemdo re thdaesnie r af or ac lsiaumt.ne nByy the
lat1e89 0sth el ocoufst cehnoloignincoavla itnic oonm puthiandg
shifdteceids itvote hley WEexsptreei.n ceednn geiemrosv etdo tNho­r
erCn alifotronj iionaa negwen eartioofnc ompanoirle,is k Ia(el bt,o
trtyh ehiarn adt e ntreenpuerrsiph.
Ia(lbf oundtehdeM aPsarC omputeCror poraitineo anr l1y89 8.
MasaPrw ast ypiocfaa w la voef s pceialsiatztre-pdus t hawte rfeu eling
ane ocnomibcom o iSnl iicoVnal lTehye.fi rmc oncen�t orna te
massiveplarya clolmepltu inagn,a rchittehcatitun rcaersd eet hsepe ed
andp ower coofpm utesry smtse byh avitnegn osf t housaonfd s
prcosessow rorikn p aralrlaet!ht"eh ras nqe uenti,at lopl rycoessi fnor­
maiton.
Ina ni nterivni1 e99w1 I,a( llbo okbeadkc onh idse ciiostno s atrt
MasaPri nS liicVoalnl ey:
Therea'f su ndamednitfafle rientn hcseet rucotftu hrieedn ursyt
bewteeRno ut1e82 andh eer.R out1e82 iso rganiiznetldoa er g
copmansi etdhaott h eoiwrn t hnig. ADti giwteah la,d oouwrn
capabeisfl oiertv iyetrhinnogjtsu tl ittle butbtho irandgscs,hp, i s,
,
monirtsod,i sdkr iveevsre,y th.iI ntgv'esyr difficfuolart s mall
compatnoys uvrivien t haetn vironwmheenrtye,ou ca'ntg et
copmonentesas i.lI y'tsn ota nyonei ndivitdhuianIlgt .t' hse
amounotf eerngiytt aekst og eetv reyth.in.g.
PROLOGUE
� XI
Theraera el arnguemb eorf peerxinecdep epolhee rweh oh ave
reitrebdu ta res tialclt iivnte h ei ndsutrayn da raev ailaasb le
contsaunlmtesm,b erso fb oradosf dctiorroesrv, e ntcuarpei stt.as li
Theriesah ugseu ppolfcy o ntrlaaocb-rtf amro re thanu teo n Ro
128.If y ouw antto d egsniy ouorw nc hisp,t hearreae w holleo t
ofp epolaer ouwnhdo j sutd oc ontrcahciltpa yoauntdd eisg.n
Youw anmte chandiesciaglIn t?h' esr teoo .T he'rjsesu tab ouatn ­y
thinygo u wiannt th iisn frasrterT.uh cattwu'hsyI s ya into'ts
jsuto net hi.nI gtl'asob ,ri tm'ast eriitaa'lcsssc ,est os hposa,n di t's
tim.e
Youc agne atc scest o steth heinbgaksct hesroeno eorr l atbeurt,
wheny ou'irnae s ta-rpumt odet,i miese veryt.Th iimn-egtoa-­rm
ket isb eirhnicdga hstih ny ouprr iosra isats iteta-rpu.W hent hings
are rdiogwhntt h set er,ted eicsnisgo emta deq uciklIyt.n' osot n e
thinbgui,tyf o us pendl ootfst imoena iprlasna end tohnpe h o,n e
playpihnogn tea ygo,u c agne atn o ver2a0-l30lp ercesnlto wdown
int im-etmoa-rk.et. .
TheV allevyey rf ias-sm otvianngd s ta-rputsh avteom ovfea .s t
Thew holceu ltouftr heVe a lliesoy n e cohfag ne.W el auagbho ut
how toefpne polceh anjgboes. T hej koei st hayto uc anc haen g
jbosa ndn ot chpaanrgkeli on.tgT s heesr' cau ltausorscei daw tieth
that wshyaistc hham to viinosgk a,ty harta pcihda nigtseh neo rm,
thaittn 'osct o ndseirneedg atoinyv oeu rre mseu. .S.oy ou have
thicsu ltoufrr ea pdidei csnisor,a pmiodv emernatp,ci hdna ges,
whicihs acetxltyh een virontmheayntot u fi ndy ouerlsifna sa
stta-rpu.
In teharel dya yosf t hesm eiconducitnodru stthreey rw ere
certapilnas c tehaetv erybfoerdquyen teda ndt hes tanding
jkoew ast haitfy ouc ouldnfi'gtu roeu t yporuorc persosmb sl,e
god ownt ot heW agoWnh eela nda sksm oeboyd.W eltlh e'rse
stilllot to at hta.W e taalboku tth ei nformasthiaornii nnJ ga­
panw,i tthhe es majro progratmhsa ctua sei nformattobi eo n
shadr.Te herse 'vae cliotoyfi nformahteirioentn h Vea lltehya t
isv eyr hignho,ta sh igahs i tu setdob eb,u tIc ana ssuryeo u
thaitti sm uhc higehrt haint i si nm osott hearra eso ft he
countrTyh.im sea ntsh artle aitonshairpeesa siteo r edolepvh ere
thainnt hEea stU.nl esyos'u eva ctalulwyok redi ni ty,o ud on't
realrlceyo gnhiozwev erdyi ffetrheSeni tl iVcaolnli enryfsa tcr­u
turie.s