The origins and dynamics of production networks in Silicon Valley

Abstract

Computer systems firms in Silicon Valley are responding to rising costs of product development, shorter product cycles and rapid technological change by focusing and building partnerships with suppliers, both within and outside of the region. Well-known firms like Hewlett-Packard and Apple Computers and lesser known ones like Silicon Graphics and Pyramid Technology are organized to combine the components and sub-systems made by specialist suppliers into new computer systems. As these firms collaborate to both define and manufacture new systems, they are institutionalizing their capacity to learn from one another. Three cases a contract manufacturer, a silicon foundry, and the joint development of a microprocessor - illustrate how inter-firm networks help account for the sustained technological dynamism of the regional economy.