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Stanford Report, April 16, 2003

Scholar examines links between Stanford, Silicon Valley


In his introduction to the seminar series Research Universities 101: Stanford, a Case History, Dean of Research Charles Kruger said the logical place to begin was by exploring Stanford's place at the epicenter of technological innovation over the past half-century. History Professor Tim Lenoir, who chairs the Program in the History and Philosophy of Science, thus kicked off the series April 1 with his lecture, "A History of Stanford and Silicon Valley."

Lenoir, a historian of science who pays particular attention to the recent (post-1965) history of Silicon Valley, has like many others examined Stanford's closely intertwined relationship with the Valley. While it is commonly acknowledged that Stanford has heavily influenced the development of Silicon Valley, Lenoir said, an equally interesting question is the role Silicon Valley has played in shaping Stanford.

"What makes [Silicon] Valley work?" -- a question people around the world have pondered in their desire to replicate its success -- is a matter of "organizational ecology," Lenoir said. He cited the work of William Miller, former Stanford provost and former president and chief executive officer of SRI International, who developed a list of attributes found in Silicon Valley and Stanford that are key to fostering innovation. These include a mobile, high-quality workforce -- indicated, for instance, by a high number of Ph.D.s; a culture that rewards risk-taking; a spirit of community collaboration, even in a competitive environment; the availability of financial resources (the venture capital industry was born here); university interaction; a desirable quality of life ("The weather matters," quipped Lenoir); government involvement, particularly in terms of support of research; and specialized business support infrastructure, such as the law firms that focus on technology and start-up companies.

To that list, Lenoir added the factors cited by urban anthropologist AnnaLee Saxenian in her book Regional Advantage: university encouragement of entrepreneurial spirit and collaboration with industry; government (primarily military) funding of the electronics sector; the existence of local institutions such as the Valley-based Churchill Club, which provides a forum for the exchange of information among competing firms; and the nonhierarchical organizational structure typical of Silicon Valley firms.

Stanford's role as an incubator of technology is clear, Lenoir said, singling out a few choice statistics to illustrate: In the last 50-odd years, university faculty, staff and graduates have launched some 1,200 companies. Today, more than 50 percent of Silicon Valley's product comes from companies of Stanford alumni -- and that excludes Hewlett-Packard, one of the Valley's largest firms. In addition, Stanford is responsible for generating lots of patents -- as are many research institutions, Lenoir noted -- and those patents are heavily cited in other research. University faculty are encouraged to be entrepreneurial and, overall, have a very high involvement in Valley companies, whether as consultants, advisers, board members or even chief technology officers.

An element fostering Stanford's role is the funding of graduate students' research. "There is a direct correlation between research funding and [the production of] graduate degrees," which tend to run in five-year cycles, Lenoir said. In short, he added, "everything here is organized around research."

Lenoir laid out a timeline of the four major "waves" of innovation in Silicon Valley. The first wave began in the 1950s, with the development of microwave electronics, funded largely by the defense industry. That was followed in the 1960s by semiconductors and integrated circuits; the 1980s saw the shift from mainframe to desktop computing and the rise of PCs; and the 1990s was the age of the Internet that exploded into the dot-com bubble.

Lenoir backtracked to outline how Stanford was poised to help the Valley develop. After World War II, Stanford was in dire financial straits, with nothing like the reputation it enjoys today, he noted. MIT-trained electrical engineer Frederick Terman, appointed provost in 1955 after his success as dean of the School of Engineering, was charged to help make Stanford into a top-flight institution. In order to build up the (then-poorly paid) faculty, Terman faced the challenge of trying to lure top-notch people to what was then considered a rural backwater. But Terman saw the government's growing support of research as a major opportunity, and he looked for ways to bring scientists together with industry. He developed the "steeples of excellence" concept of hiring high-powered researchers who could win government grants and contracts; by using the grants to help pay their salaries, the university could afford to hire more researchers and thus grow the faculty.

The one resource Stanford had in abundance was land: The research park was built as part of Terman's plan to create a community of "technical scholars." He also devised programs to encourage researchers' collaboration with industry, such as the Honors Cooperative Program, in which companies could pay to send their employees to Stanford, and the Industrial Associates Program, which placed researchers in companies to build up the research program.

Other highlights of Stanford's central role in the development of Silicon Valley included the arrival from Bell Labs of William Shockley, co-inventor of the transistor and Nobel laureate, to the Department of Electrical Engineering, and the establishment of a solid-state electronics program. Engineering whiz kids from Shockley's San Antonio Road firm, Shockley Semiconductor Laboratory, would eventually break away to form the archetypal Valley startup, Fairchild Semiconductor, in 1957.

Another Valley milestone was the formation in the early 1980s of the Center for Integrated Systems, a partnership between Stanford and a consortium of companies that solidified links between graduate students, researchers and industry.

Lenoir concluded his presentation with a chart that starkly illustrated Terman's "steeples of excellence" theory in practice; it graphed, by department, the percentage of the budget covered by sponsored research. Whereas the philosophy and history departments have next to no such outside funding (relying almost entirely on the university's own General Fund), the reverse is true of the sciences. Lenoir noted that 80 to 90 percent of the Department of Biochemistry's budget is underwritten by research grants and contracts.

"We get the sense the engineering school and the biomedical departments fund the humanities at Stanford, which is an unfortunate thing to end on," Lenoir said wryly.

Note: The lecture series is being videotaped and will be available through the Stanford Center for Professional Development. A complete schedule is available at

Room change
Due to high turnout, the 4:15 p.m. Tuesday seminar, Research Universities 101: Stanford, a Case History, will move from Room 40 in Jordan Hall to the Science and Engineering Quad Teaching Center, Room 200, for all but one of the remaining lectures through June 3. (Only the April 29 lecture will take place in Room 40, Jordan Hall.)