Dwight Eisenhower never declared, “I shall build a science city in Northern California.” Yet the military spending and space program spending that started under Eisenhower was the launching pad for Silicon Valley’s rocket.

@medium: The Hidden History of How the Government Kick-Started Silicon Valley

So in Silicon Valley, or the tech industry more broadly, you have these genius individuals who do extraordinary things. But these breakthroughs are made possible by a larger cast of thousands around them, by broader social structures, and by other things that America, writ large, makes possible — whether it be public policies or public education.

The government often becomes a catalyst in ways that are perhaps not consciously intended. And that is part of the magic. Dwight Eisenhower never declared, “I shall build a science city in Northern California.” Yet the military spending and space program spending that started under Eisenhower was the launching pad for Silicon Valley’s rocket.

How did federal contracts create those building blocks? How is Fairchild Semiconductor, an early, transformative Silicon Valley company that built semiconductors and circuits, an example of the collaboration between government and industry?

In the 1960s, the space race creates this opportunity for, and this demand for, smaller and smaller things. So the military and nonmilitary work are closely intertwined.

Federal contracts were Fairchild Semiconductor’s bread and butter. The integrated circuit was developed at Fairchild by Bob Noyce and others which proved to be an extraordinary advance in transistor technology — the beginning of the microprocessor that would eventually become a computer on chip miniaturization. It was an extraordinary device, but there was no commercial market for it. Then the Apollo program becomes a customer, and when NASA orders up a whole slew of those chips, that drives down the price. Then you were able to scale it up and make it something that can be a commercial product.

No one was sitting behind a desk in Washington saying, “Oh, this is how we’re going to build a tech industry.” But that is what happened.


Why did the Santa Clara Valley become come the country’s tech hub, rather than Boston, where you have Harvard, MIT, and a plethora of researchers? What was special about California — and, specifically, this area?

For the first few decades after World War II, Silicon Valley was always trying to compete and catch up to Boston. And while people like to talk about how they were rivals, the power of both places came from a symbiotic relationship. You had people bouncing back and forth. You have people educated at MIT coming out west. It’s really not until the 1980s and 1990s with the rise of the mini-computer industry that Boston falls off the map.

The Valley was isolated — which initially made it difficult to get people to move there. And so the people who did move there were these kind of young, scrappy people who might not have had the family connections or the wealth that would have gotten them a job at a Fortune 500 company. That might have made them more willing to come out west and try something new.

East coast companies, like IBM, opened outposts in the Valley in the 1950s, and the reason they’re coming is Stanford. Stanford is now mentioned in the same breath as Harvard, right? But Stanford and Harvard are radically different institutions in conception and design. Harvard was created to educate 17th century clergymen. It’s a liberal arts school that has grown to be a major research institution. Even MIT is the product of a certain time and place. But Stanford is a product of the 19th century, founded by a railroad baron and his wife with an explicitly pragmatic purpose: to put useful things into the world.

Also, Stanford created industry affiliate programs for people to work at local electronics companies and get their graduate degrees on the side for free, making it very appealing to the young smart guys who didn’t have a lot of money. They also did something none of their peers were doing: building entire engineering programs oriented towards the cutting edge of industries. …come back to Stanford and set up an entire lab and program that trains people in semiconductor technology.

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There was legitimate worry that the big companies that controlled speech, or controlled communication, would find some way to somehow squash what Mitch Kapor (co-founder of the Electronic Frontier Foundation and the creator of web browser, Firefox) memorably called the “Jeffersonian Internet” [in a 1993 Wired article]. We’re not Jeffersonian anymore. Not even Hamiltonian — it’s bigger than that.

I’ve spent a lot of time thinking about the Progressive Era in the 1920s. There was a similar, dizzying degree of change — new industries had grown very large, and there was great anxiety about the immense power of companies like Standard Oil, and the lack of consumer choice that came along with it.

We’re at another moment like that. This is the great dilemma of 2019 Silicon Valley: How do you harness the dynamism? Even though the mood is kind of sour right now, there are a lot of good things coming out to the Valley.