How important is location for the history of the computer industry?

The computer industry in the United States largely developed in two main geographic areas. The first in the North East, located along Route 128 and the second is Silicon Valley in California. Geographical advantages and a new attitude to industrial organisation were significant in the success of the computer industry in America, especially that of Silicon Valley compare to Route 128.

Route 128 in Massachssetts

There were several key advantages to the geographical set up of Silicon Valley that aided the development of the computer industry in America. One key advantage of location was the network created between educational institutions and industry. Famous universities such as Stanford or Berkeley provided the sector with skilled engineers. They also created programs cooperating with industry, Stanford’s Honors Cooperative Program for example, and made research facilities available to industry. Additionally, lesser known state colleges or community colleges also provided labour to the computer Industry. The development of specialist services tied to the computer industry in the region such as lawyer firms, PR firms, market research firms, consulting companies were also important for the development of the industry.

Silicon Valley in California

However one has to bear in mind that in addition to location, industrial organization and management played a significant role in the success of Silicon Valley. If one compares Route 128 and Silicon Valley, they both had geographical advantages but Silicon Valley had a more successful fate than Route 128. The attitude and management organization that was used in Silicon Valley, which was in stark contrast to the previous business organization of firms in Massachusetts. The development of a competitive but cooperative attitude between firms and employees was key to the spread of ideas in the computer industry. Employees from different firms would often have lunches, help each other out if they had problems, even exchange materials or equipment if they ran out. Moreover, firms such as Intel or HP tried to minimize levels of hierarchy and executives were encouraged to interact with all employees. This development of informal relations between and within firms helped Silicon Valley adapt to the fast changing world of the IT and semi-conductor industries.

Co-operation

Geography could also have reinforced some of the business or industrial organization that were present in Silicon Valley. An example of this is the fact that all firms are in the same location eases the mobility of employees and executives across firms. One of the key advantages of Silicon Valley was that people could move to and from firms extremely easily. Since people could change firms without having to relocate, without having to change their children’s schools, this made this mobility far easier. Moreover, as people who worked in the industry all lived in the same area, attended the same restaurants, went to the same conferences, this reinforces the informal network which seemed to play such an important role in the development and success of Silicon Valley. Therefore it seems location may also have promoted the industrial organization that developed in the area.

Employee mobility

Thus location was important in the success of the computer industry in America with the development of networks within these specialized regions. The development of different social structures and industrial practices can help explain the diverging fates of Silicon Valley and Route 128. However geographic clusters can also bring certain disadvantages (high housing costs, congestion, etc.) which may hinder the future of a so far very successful industry in Silicon Valley.