Silicon Valley Model Research Articles

Asian-Americans, we must resign from our role as Silicon Valley's model minority mascot

This article interrogates the role of the "model minority" myth in the lives and careers of Asian Americans in tech. The author shares research as well as her own experiences and that of her peers to illuminate the harmful misconceptions and microaggressions that make up daily life. This article is particularly poignant as we mark the conclusion of Asian American and Pacific Islander Heritage Month in the United States.

The Legal and Institutional Foundations of Silicon Valley’s Technological Innovation: An Interdisciplinary Literature Review

This article reviews interdisciplinary literature to explain how state legislation and the practice of law in California influenced the success of Silicon Valley in creating a startup business culture involving the commercialization of technologies built on venture capital finance. Scholarship has identified four major factors in the rise of Silicon Valley: business culture, symbiotic institutional relations with research universities, California contract and employment law, and Silicon Valley law firm culture. Both law and institutional support have been central to the commercialization of scientific knowledge that is the hallmark of Silicon Valley. Silicon Valley companies have remained leaders in technological innovation for over sixty years, encompassing various technologies from semiconductors to personal computers to the Internet. This entrepreneurial approach to technology continues to this day as exemplified by the successful DoorDash and Airbnb IPOs launched in 2020. The paradigmatic Silicon Valley technology company consists of a small group of entrepreneurs building a start-up technology company funded by a venture capital fund. The venture capitalists (VC) maintain hands-on management of the company and receive seats on the board of director and preferred stock rights. If the business plan is successful, the company offers shares to the public through an initial public offering (IPO), or arranges additional funding from another VC fund. This Silicon Valley model is characterized by a tolerance for failure and high labor mobility. Technology company employees have the freedom to leave established companies to start their own ventures.

Exploring the motivations and success metrics of everyday entrepreneurs: A qualitative examination

Entrepreneurs are diverse. However, the concept of entrepreneurship has evolved over time to become synonymous with exceptional ventures – the high-growth, technology-focused, and equity-financed ventures indicative of the Silicon Valley Model (SVM) of entrepreneurship. The academic research associated with entrepreneurship has similarly evolved along this path. Unfortunately, this focus on a narrow type of entrepreneurship has undermined research on everyday entrepreneurs, who are responsible for much of the entrepreneurial activity around the world. Following calls in the literature, we explore these entrepreneurs to better understand this often-overlooked group. In this qualitative study, we address two research questions related to motivation and success in the everyday entrepreneurship context. We conclude with a discussion of the importance of this research and how it contributes to the extant literature.

The Chinese platform business group: an alternative to the Silicon Valley model?

The current understanding of platform expansion is based upon the experience of US West Coast firms. China, with its largely protected but enormous internal market, provides an ideal ‘experiment’ for examining how platform business models might develop different evolutionary trajectories in different environments. Based upon a study of the two largest platform firms, Tencent and Alibaba, and the far smaller but dominant Chinese online travel agency platform, Trip.com, we demonstrate that a different business model has emerged in China. In contrast to the West Coast model—in which the expansion occurs through internal development and introduction, acquisition, and venture capital investment—Chinese firms have employed two other strategies. The first is listing some of their existing operations separately on the stock market (what we term a ‘sell off’) but not giving up control. The second strategy is interfirm cross investments. The use of these two strategies has led to the formation of an organizational form, that we term the ‘platform business group (PBG)’, which extends and transforms the existing Chinese business group model. We discuss the environmental conditions that enable PBGs to pursue business strategies in a different manner than their Western counterparts and to identify the key conditions that allowed the PBG model to develop. Our extension of platform studies to China enriches and extends theoretical and practical understanding of Chinese platforms. Finally, we discuss the difficulties that PBG firms face in employing their business model internationally.

A Context-Choice Model of Niche Entrepreneurship

Entrepreneurship research has gravitated towards a singular focus on the Silicon Valley model as the standard model of entrepreneurship. By contrast, some entrepreneurship scholars have more recently suggested embracing entrepreneurship as diverse and colorful. We build on this latter stream of literature by analyzing the diversity of entrepreneurship from complementary institutional arrangements inherent in national economies. Drawing from Robert’s (2004) model of complementarities between context and organizational choice variables, we analyze the contextualization of diverging entrepreneurship models. Our findings indicate that some economies are complementary to a specialized niche strategy, while others instead promote a scalable mass-market manifestation of entrepreneurship.

Society, Technology and the Future in Tech Development

Much attention has been brought to the techno-futures of “Californian Ideology” (Barbrook/Cameron 2001) and the popular discourse of Silicon Valley. This paper explores techno-futures as collective orientations (Bohnsack 2010) of tech developers outside of tech world’s epicentre. Two group discussions among tech workers are used to identify their understanding of society, of technology’s role in it, and visions of the future. This analysis relates to two sociological approaches: the sociology of future imaginaries and utopias and the sociology of critique. These perspectives shed light on future imaginaries as interpretations of society and technology’s role in shaping it as well as normative judgements on capitalism and technology. The findings suggest that variations of the well-researched Silicon Valley technology discourse can be detected in the discussions. In contrast to a Solutionist Polis legitimising the Silicon Valley model of disruptive innovation (Nachtwey/Seidl 2017), the respondents demand democratic and social control of technological development. Yet, this is only associated with the sphere of the application of technologies, while the production of technologies is imagined as independent from the social and political sphere. The orientations thus indicate a technologized vision of the future, in which society has a reactive role vis-a-vis technological changes.

Have we oversold the Silicon Valley model of entrepreneurship?

The Silicon Valley model of entrepreneurship has captured the imagination of the public, the attention of the public policy community throughout the world who want to emulate it, and the focus of scholars seeking to understand it. Entrepreneurship has enabled the Silicon Valley region to harness the opportunities afforded by globalization rather than succumbing as a victim. The purpose of this paper is to suggest that there are limits to the Silicon Valley model of entrepreneurship in addressing the most compelling contemporary economic and social problems and that a broader, more inclusive understanding of and approach to entrepreneurship might be more useful.

Avoid Startup Traps

Beware entrepreneurs, don't get lured into the startup ecosystem. Venture capitals (VCs), accelerators, incubators, universities and governments all promote startups, usually with good intentions, but lack of certain basic qualities of entrepreneurs may lead to devastating effects, which needs to be taken into context while starting and running a startup. Exponential growth in technologies like artificial intelligence (AI) and robots have led to a myth that there may be an expected loss of jobs drives many of these stakeholders to rapidly assign resources to copy Silicon Valley's model of startups without clear understanding. The success stories of Google, Tesla and Apple have also prompted many Indian entrepreneurs to start ventures. Entrepreneurship, or the journey of turning a founder's vision into a "sustainable," real venture, is clearly not something new, and has always been ingrained into every human being. It promotes the capacity and willingness to have courage, intuition, emotional intelligence (EI), creativity and networking. These are fundamental traits required of entrepreneurs involved in startups. With almost 98 out of 100 startups failing globally one must analyze why the success rate is not that great.

The Quotidian Labour of High Tech: Innovation and Ordinary Work in Shenzhen

The literature on the production of high-tech electronics in China—following a Silicon Valley model—focuses on either large-scale manufacturing or the role of start-ups and ‘makers’. The aim of this article is to turn to other kinds of spaces and work in the production of high-tech electronics. I focus here on three kinds of spaces in Shenzhen: the Huaqiangbei electronics market, small-scale factories and industrial design workshops. The electronics economy depends critically not just on ‘makers’ but on all kinds of other labour. In particular, it depends on lower middle-class and low-class work—devices made by small factories and shops, sold by small enterprises and designed for the less wealthy, especially in developing countries. The human networks that connect these individuals are critical to the size, speed and density of the markets, allowing devices to be built and shipped rapidly, for parts and customers to be available.

The venture capital state: the Silicon Valley model in east Asia

Milton Friedman famously said: ‘If you put the federal government in charge of the Sahara Desert, in five years there'd be a shortage of sand’ (p. 11). The venture capital state offers high-powered ammunition against such neo-liberal attacks on the state. It argues that even quintessential neo-liberal bastions like Silicon Valley have been the result of the visible hand of the state. It is an important contribution to scholarship on entrepreneurship and venture policy along the lines of Josh Lerner's seminal Boulevard of broken dreams (Princeton, NJ: Princeton University Press, 2008). The book's premise is threefold. First, venture capital (VC) markets have not sprung from a free-wheeling market bedrock. In the same vein as Linda Weiss's American Inc.? (Ithaca, NY: Cornell University Press, 2014) and Mariana Mazzucato's The entrepreneurial state (London: Anthem Press, 2013)—both accounts of the instrumental role of the state in advancing the American technology sector—Klingler-Vidra argues that the state intervened to foster venture capital in Silicon Valley. Moreover, governments have deployed tax incentives, investment and regulatory reforms to fuel its internationalization. She makes this assertion based on a proprietary covering from 45 countries, and through deep case-studies of Singapore, Hong Kong and Taiwan.

The German Mittelstand: antithesis to Silicon Valley entrepreneurship?

While internationally, the Mittelstand in Germany is admired and many countries try to emulate it, the current debate in Germany praises the Silicon Valley model of entrepreneurship, contrasting the Mittelstand as low growth, low-tech and non-innovative—in short, as a hindrance to Germany’s economic future. We therefore ask whether the Mittelstand actually is the antithesis to Silicon Valley entrepreneurship. We show that Mittelstand is about more than just small and medium enterprise size, identifying as its distinctive features the identity of ownership and management and a sense of belonging. In this regard, we also discuss the influence of historical paths and current institutional settings of the Mittelstand. Asking to what extent the Mittelstand is distinctive, we address its diverse contributions to economy and society. We suggest that the Mittelstand is an excellent example of everyday entrepreneurship and a vibrant segment of the economy which is also competitive, innovative, and growth-oriented, albeit in different ways compared to Silicon Valley entrepreneurship. In conclusion, we outline ideas for future research and implications for policymakers. In our view, future research and policies should stand back from dichotomies such as “Mittelstand versus Silicon Valley entrepreneurship” and acknowledge the vibrant diversity and heterogeneity of entrepreneurship.

Hidden champions and unicorns: a question of the context of human capital investment

The Silicon Valley model of high-tech entrepreneurship has been placed in the spotlight by academics in the past at the expense of the plenitude of Main Street businesses — businesses beyond the high-tech and ICT sector and the highly scalable platform economy. This study aims at resolving this one-sidedness contributing to unexplained aspects of entrepreneurship theory. Our focus lies on a subgroup of Main Street companies, known as hidden champions, as the counterpart of Silicon Valley high-growth firms, the unicorns. In spite of a worldwide distribution, just as unicorns are highly skewed to a few countries and regions, so are hidden champions. On a snapshot, it appears that unicorns and hidden champions are substitutes rather than complementary to one another. We illustrate that the emergence and skewed distribution of these two types of firms can be explained by the institutional context, in particular the provision of human capital. In an explorative approach, our line of reasoning puts forward that the centralization (public provision) vs. decentralization (individual investment) in organizing the accumulation of human capital helps to explain the different and path-dependent evolution of both, the Silicon Valley and the Main Street models of entrepreneurship.

Three waves and counting: the rising tide of contextualization in entrepreneurship research

Although the field was initially slow on the uptake, contextualization of entrepreneurship research has come a long way in recent years. Arguably, entrepreneurship demands contextualization more than many other fields, because not only is entrepreneurship broad and diverse in its scope but it is also frequently about the creation of differences. In this paper, we outline three recent and overlapping waves of contextualization in the entrepreneurship field. The discussion has moved from challenging the “standard” or Silicon Valley model of entrepreneurship by considering the why, what, and how of entrepreneurship (first wave) towards considering more subjective elements and the construction and enactment of contexts (second wave), through challenging us to deepen our theorizing by broadening the domain of entrepreneurship research (third wave). The articles in this special issue on “Entrepreneurship in Context” represent this third wave. Taken together, they illustrate entrepreneurial diversity and comprehend entrepreneurship and innovation as everyday activities. We end with a brief consideration of where the rising tide of contextualization may take the field during the next few years.

Diffusion and adaptation: why even the Silicon Valley model is adapted as it diffuses to East Asia

Diffusion scholarship expects little adaptation of core elements of policy models. However, the empirical reality is different; diffusion of even highly regarded models, such as the Silicon Valley venture capital (VC) policy model, results in marked adaptation. This article demonstrates why the Silicon Valley VC model is necessarily adapted differently by policy-makers in the geographically, ethnically and economically proximate states of Hong Kong, Taiwan and Singapore. More specifically, these policy-makers' interventionist orientations, private sector financing preferences and international versus domestic firm promotion biases drive contextually rational – and unique – adaptations of the Silicon Valley VC policy model.

The ‘soft company’ business model of high-tech growth

Despite the overwhelming emphasis placed upon it in the innovation and entrepreneurship literature, the Silicon Valley model of venture capital investment is not the only way to develop new high-ri...

The Legal Framework Governing Business Firms and its Implications for Manufacturing Scale and Performance: The UK Experience in International Perspective

This paper review empirical studies examining the economic effects of laws governing the formation, financing and organisation of business firms with the aim of putting the UK experience in a comparative perspective. The literature identifies two models of legal support for manufacturing which imply different directions for policy: on the one hand, the Silicon Valley model of venture capital funded growth which depends on liquid capital markets and flexible labour markets, and the northern European and Japanese model which is based on long-term innovation, stable ownership, and institutionalised worker-management cooperation. The UK has some of the legal features of the Silicon Valley model, but important parts are missing: for example, the Californian rule under which post-employment restraints (‘restrictive covenants’) are void on the grounds of their anti-competitive effects has no equivalent in the UK. Conversely, although the UK has certain elements of the northern European or east Asian model of institutionalised corporate governance, it is unlikely to be able to replicate the ‘productive coalition’ approach of these countries as long as the legal framework prioritises shareholder rights and the market for corporate control, and provides limited encouragement for job security. The Silicon Valley and ‘productive coalition’ models are ideal types which can distract from the fact that most countries, the UK included, are hybrid systems with some of the characteristics of each model. Rather than designing laws and policies exclusively with one model or the other in mind, it may be preferable to consider specific laws and policies on their own merits, while bearing in mind that a given legal rule or policy does not operate in isolation from others and that there may be some ‘network effects’ in operation due to the way that particular rules interact.

The development of the successful high tech sector in Israel, 1969-2009

This article describes the events and processes that led to the development of the Israeli high tech cluster. Understanding the Israeli cluster is important because Israel is probably the most successful example of replication of the Silicon Valley model outside of North America. It explains the development of multiple factors, including sophisticated human capital, technological institutions and an open, global environment, that were crucial for building the Israeli high tech cluster. This is most important for policy makers who want to learn about the successful structuring of a high-technology innovative sector in a small, open economy.

The next Silicon Valley? On the relationship between geographical clustering and public policy

Inspired by the success of geographical clustering in California, many governments pursue cluster policy in the hope to build the next Silicon Valley. In this paper we critically assess the relationship between geographical clustering and public policy. With the help of a range of theoretical insights and case study examples we show that cluster policy in fact is a risky\ venture, especially when it is tried to copy the success of regional ‘best practices’. Therefore, we advice policy makers to move away from the Silicon Valley model and to modestly start from a place-specific approach of ‘Regional Realism’.

The internet enlightens and empowers Chinese society

Charles Zhang is founder, chairman, and chief executive of Sohu.com, a company incorporated in the U.S. state of Delaware with headquarters in Beijing. In 2004, Sohu took in more than $100 million (U.S.) in revenue by providing online information and services. Zhang established the company in 1996 as Internet Technologies China and two years later launched the first Chinese-language search engine Sohu, or "search fox." Sohu.com was listed on the NASDAQ stock exchange in July 2000; its market capitalization topped $1.4 billion in 2003 before declining in 2004.Zhang pioneered the Silicon Valley model of entrepreneurship in mainland China and is often referred to as China's Bill Gates. In 1998, Time Digital named him one of the world's Top 50 Digital Elite, and the World Economic Forum identified him as a Global Leader of Tomorrow. In 2003, he was featured in Time magazine as one of its 15 Global Tech Gurus, and in BusinessWeek as one of 25 global e-business CEOs. In 2004, he was selected the Distinguished Executive of the Year by the (U.S.) Academy of Management. He spoke with me during and after the 64th Annual Meetings of the (U.S.) Academy of Management in New Orleans, August 2004.

Entrepreneurial Models and the Software Sector

Young, radically innovative, growth-orientated and publicly listed high-tech companies in Silicon Valley, together with venture capital financiers, gave birth to the concept of the ‘Entrepreneurial Business Model’ (EBM). This concept has become central to the debate about the innovative capacity of nations in information technology and its promotion became an important policy objective in Germany during the 1990s. This paper addresses the question of whether German software companies on the former ‘Neuer Markt’ of the Frankfurt stock exchange were able to successfully implement business models similar to that of the typical entrepreneurial company in the USA. The paper focuses on the performance of software companies and venture capital investments on the ‘Neuer Markt’. A number of findings emerge from this effort. First, successful German software companies implement traditional business models. The most successful German companies specialize in IT – and software services. Such firms do not specialize in standardized software products which require little service and customization. Secondly, German venture capital for the most part was not able to establish successful entrepreneurial companies on the Silicon Valley model. Nor were they able to create a successful German variant of venture capital involvement in more traditional companies.