Chapter 8

Silicon Valley: Too Much Success?1

Henry Etzkowitz 2and Annika Steiber3

8.1 Introduction
A high-tech conurbation with an expansionary dynamic respects no bounds of nature, counter-culture,
exurban or urban life. Starting from Santa Clara County on the Peninsula, Silicon Valley is expanding in
all directions. Crossing the Santa Cruz Mountains to reach the Pacific coast, it is expanding into the city
of San Jose as firms, like Google and Apple, outgrow the willingness of smaller cities such as Mountain
View and Cupertino to accommodate their growth. Moving into and above Berkeley, it is spreading
across counties formerly considered as part of the Bay Area, itself an expanding geographical
classification. Even Oakland’s downtown, where murals hid some empty storefronts, is experiencing
signs of gentrification. Moving ever further east and south, Silicon Valley is expected to cross the
mountains into the Central Valley where the University of California, Merced, a new campus, provides an
anchor for future high-tech agglomeration in an agricultural region, much like the Valley itself 60 years
ago. Indeed, San Joaquin County has pro-actively defined itself as “Greater Silicon Valley” as part of a
concerted effort to promote the nascent trend.
A new growth dynamic emanating from further expansion of mega-firms like Google, Apple and
Facebook as well as start-ups converging from the rest of the world overlays the classic dynamic of
university-based start-ups and local firm spinoffs. Indeed, the Stanford Research Park, whose early
mission was to host firms that wished to remain close to their source, is virtually invisible in Silicon
Valley, although it occupies a large tract of land on the east side of the Stanford campus. The physical
format of low-lying buildings surrounded by green space became a model for the development of science
parks in other locations where it was often presumed that the architectural format, in itself, was the
attractor and generator of high tech development. Nevertheless, the Stanford Park is not seen as a
significant factor in the development of Silicon Valley even though it served as the model for the
contemporary science park.
Founded as an industrial park to attract manufacturing firms departing San Francisco and to raise
money to support the development of Stanford, its founders soon realized that its potential resided in
hosting firms emanating from Stanford that wished to stay close to their source for ease of continuing
interaction. Today, the Park hosts the headquarters of the two descendant firms of Hewlett Packard, the

1
Presented at the session on “Science Scapes” Heidelberg Triple Helix Conference, 2016.
2
International Triple Helix Institute, Silicon Valley www.triplehelix.net
3
Menlo College, USA
Skype subsidiary of Microsoft, various law firms, the Start-X accelerator and other elements of the local
innovation ecosystem. Silicon Valley’s current employment growth is driven both by the location of
branches of firms from Asian and Europe seeking to tap into the region’s technology as well as the
expansion of indigenous firms, both iconic and startups in long-standing and emerging technology fields.
Ironically, quality of life is driven down for all but a super-elite as the result of an imbalance that emerges
between private and public spheres. The traditional idea of management is to transform bad problems into
good problems. ‘Wicked problems,’ have been defined as complex issues, the entanglement of multiple
causations whose solution creates new innovation potential from the collaborative effort to meet their
challenge.4 This chapter discusses the sources of Silicon Valley’s success and issues that have arisen due
to “too much success, inducing, a “Katrina effect,” similar to the long-term consequences of the hurricane
for New Orleans.

8.2 Empirical Research: Methodology

Silicon Valley’s “paradox of success” led us to define three main categories of research questions. The
first category focused on how our interviewees defined ‘Silicon Valley’ and if ‘Silicon Valley, according
to them has changed over time. The second category of questions aimed to investigate to what extent
Silicon Valley is ‘place-bound’ and if this is the case what makes it place-bound. The final category of
questions tried to investigate if there is a ‘primary engine for renewal’ in Silicon Valley, and if so what
are the sources for this and what risks are there that could “damage” this engine for renewal?
Twenty face-to-face “elite interviews” were carried out during the period from July to October
2015. Our aim was to both identify people with deep knowledge of the Valley but also cover perspectives
from several parts of the ecosystem. For these reasons, we selected senior people from organizational
bodies such as Silicon Valley Leadership Group, Bay Area Council, California Workforce Investment
Board, Joint Venture Silicon Valley, and Collaborative Economics in Bay Area. In addition, we selected a
high profile journalist who has followed the tech sector in the Valley for decades, two senior members of
the VC community, two historians at Stanford University Library, people from the office of Economic
Development in San Jose as well as several people representing the corporate view but also had in
different ways reflected on Silicon Valley’s trajectory.
The interview guide was semi-structured with open-ended questions, which provides us the
opportunity to identify both similarities and differences in answers. Further, each interview was one hour
long and was conducted either face2face or over Skype with the video camera. Each interview was
documented and shared between the members of the research team. Data were coded by each one of the
4
Oksanen, K., & Hautamäki, A. (2015). Sustainable Innovation: A Competitive Advantage for
Innovation Ecosystems. Technology Innovation Management Review, 5 (10), 24–30.
members of the research team and main findings were then jointly identified in frequent meetings during
spring 2016 between members of the research team. Follow up questions identified were sent during
spring 2016 to relevant interviewees and their answers were then integrated into the final documentation
of key findings.