WHY SILICON VALLEY IS HERE !

These are the blooms of prune trees. Located in a geologic trough, the Santa Clara Valley in California was once known as the Valley of Heart's Delight due to its farmland filled with flowers and fruit, including prunes. How did a region known for its fruit and flowers... become an intellectual capital? During World War II, American engineer Vannevar Bush basically led wartime R&D. And in 1945 he published an essay called “Science: The Endless Frontier”.

Bush reported to President Roosevelt that the pioneer spirit is still vigorous within this nation. Though focused partly on problems like the war against disease... the report also set an expectation... that science and continuing science funding... was necessary for the public welfare. Just a few years later, the National Science Foundation resulted as Harry Truman wrote, Henry Ford to promote industrial development in national defense.

This funding meant facilities like NASA's Ames then called NACA... and Navy stations near San Francisco, provided a continuing engineering talent base to the San Francisco Bay Area. That was paired with proximity to Stanford University... the college that had greater land resources than cash. Built from the land grant of Leland Stanford the university was land rich.

You can see in this early proposal how a small campus was surrounded by farmland. But Stanford didn't have a ton of cash. The region had a lot of unrealized potential... and one of Vannevar Bush's former students... wanted to realize it. Frederick Terman was a professor of electrical engineering at Stanford as well as an iconic name in radio science. He worked on stuff like jamming Nazi radar during World War II and he also wrote a radio engineering textbook that sold hundreds of thousands of copies.

Even before Terman was appointed university provost in 1955 as a professor and as a dean, he sought ways to develop the Valley of Heart's Delight. This 1950s land use study shows that Stanford intended to use some of its land primarily for the campus and residential development. Stanford developed the Stanford Shopping Mall to help remedy their lack of cash. It's still leased by the university today. This is their California Pizza Kitchen.

More importantly... Terman helped the university develop Stanford Industrial Park... today called Stanford Research Park. This is what it looked like in 1953. The park provided affordable 99 year leases to tenants with a strict development plan to preserve the character of Palo Alto Construction. They insisted on low buildings and preserved grassland... that the Valley of Heart's Delight was known for. But it was more than just a development on the university's land. From the beginning, Terman imagined a new cycle.

Stanford to companies... to Stanford to companies... [repeating and overlapping] to Standford to companies... As he said in one interview for Palo Alto 75th anniversary... “And I would say university made a major contribution... to the development here.” “But then the companies made a major contribution to the development of those parts of the university that contributed to these companies.” He encouraged this in many ways including allowing professors to spend time in corporate roles and get corporate paydays... and helping companies enroll employees as Stanford students.

He proudly clipped this article about faculty eggheads becoming millionaires. And he gave speeches about how Stanford is also a source of highly trained manpower for those companies... at a time when such manpower is in short supply. Crucially, this cycle wasn't predicated on silicon or semiconductor companies. Stanford Industrial Park was open for any tenant that wanted to be near Stanford. Houghton Mifflin, the book publisher staked to claim in the Stanford Industrial Park.

Other hi-tech but not computer-focused companies also found spots there, as shown in this 1960 picture. Here's Terman at the announcement of a Stanford Research Park building for SpinCo, a maker of centrifuges and division of a larger company looking to expand in Palo Alto. Stanford's landholdings quickly changed. You can see how it expanded through 1955 with 120 acres into 350 acres by 1960.

Terman explicitly said this cycle would not only affect the Bay Area but the national labor market. It worked and in electronics focus grew from Terman’s own interest in engineering. West Coast electronic firms produced 22% of the US’s electronic market in 1960, and it kept growing. This was a competition between regions. Terman said if the Midwest continues to plod along in electronics... it is destined to become the peon group... in the nation's electronics industry.

He also argued that growth industries depend on brains... and the best source of brains is the nation's major universities. Proximity of markets no longer will play a key role. This is the Palo Alto garage where Hewlett-Packard was founded. Terman had been a teacher. And his personal solicitations helped bring them to the West Coast. And later, a short drive away in Stanford Industrial Park... where HP secured a 40-acre site. Stanford Industrial Park became a platform for any successful industry that might emerge. William Shockley's Shockley Semiconductor Laboratory is widely credited with starting the Silicon semiconductor boom... and Fred Terman solicited Shockley to start his business in the Valley. He did so in nearby Mountain View.

Shockley Semiconductors became a demonstration of the final cycle that Terman initiated: Engineers in the ecosystem would found new companies in the same area. Employees split off Shockley to form Fairchild Semiconductors in Mountain View... and then those employees split off to form Intel locally... and so on and so on. This paired with development of more recognizable companies that started in the industrial park. Renamed the Research Park in 1970.

Xerox's Palo Alto reach center, PARC was located there. “This is an experimental office system.” “It's in use now at the Xerox research center in Palo Alto, California.” As venture capital grew in the 1960s... bearby Sandhill Road was an obvious location due to its proximity to the Stanford epicenter. By 1971, journalist Don Hoefler former publicist for Fairchild Semiconductor labeled the region Silicon Valley for a series of articles. It was an allusion to the silicon chips that had taken over the valley.

As Hoffler wrote... The pace has been so frantic that even hardened veterans of the semiconductor wars... find it hard to realize that the Bay Area story covers an era of only 15 years. The Valley became home to Oracle... and Next and Adobe and Sun Microsystems. And from Netscape on powered forward... in the first dotcom boom. “In 1994 and 95... Netscape was known as the fastest growing company in the industry... with all the requisite valley attributes.” And even in a remote work era: Meta, Apple, and Google have all maintained Silicon Valley... as a substantial hub.

Terman’s vision made that cycle possible. And today's Silicon Valley has fewer prunes... but it remains in all its complicated ways... a Valley of Heart's Delight. Hey, thanks for watching this history of how Silicon Valley became Silicon Valley. But I've got— One more thing. Is that corny? No? Should I have not done that? Anyway. The map that I use of Stanford Research Park... It goes up to a certain point in the video... but it actually comes from a historical survey... that continues in time. So I want to show the rest of that to you here.

By 1965, it is up to 500 acres. That's the yellow area. The light green area shows you that it's ballooned to 575 acres by 1970. By 75, it's at 600 acres. That's the dark green. And then you've got the blue, which shows you up to 1980 which expands Stanford Research Park to 700 acres.