Growing where you are planted: Exogenous firms and the seeding of Silicon Valley

Abstract

What are the respective roles of indigenous and exogenous factors in the development of high-tech regions? Entrepreneurs and their start-ups have dominated Silicon Valley's economy in recent decades, but a different dynamic was at work from 1940 to 1965, when the Valley emerged as a formidable high-tech region. In key industries (electronics, semiconductors, computers, and aerospace) that defined Silicon Valley as a high-tech cluster during that period, companies based elsewhere played critical roles in planting the organizations that would – through the innovations they made, the technical talent they attracted, and the start-ups they spun off – help make the Valley the world's most admired and emulated high-tech region.