Geography Reference
In-Depth Information
the small firms. These must change towards cooperation with each other in order
to survive.
Hi-tech flexibility: the Californian computer industry
The examples from Italy concern mostly technology which is not avant-garde
but modest and well established. Flexibility can also enhance the most modern
kinds of industry, as is demonstrated by the case of computer equipment in the
state of California, USA. In this state, there was a modest start in electronics prior
to the Second World War with the establishment of Hewlett Packard in 1937 by
two graduates of Stanford University, and some other small firms linked to this
university and located in the Santa Clara valley, south of San Francisco Bay. But
most growth was from the 1950s with the creation by Stanford University of an
industrial park, and the arrival of many established firms alongside the small
local ones—established firms such as Lockheed, IBM, Raytheon and
Westinghouse.
In the period from 1955, a remarkable growth of firms occurred, mostly
involved in the manufacture of semiconductors, the basic building blocks of
computers; 31 semiconductor firms were set up in the 1960s alone, and many of
these would fail or become amalgamated with others. At the same time, a variety
of infrastructural firms were set up providing services to the computer firms,
such as those of finance and legal services, metalworking, and consultancies on
business operation. Software firms developed which had the advantage of
working closely, and often informally, with the hardware companies, and linking
in easily to the academic environment of Stanford University and the Berkeley
campus of the University of California. Community colleges also worked
directly with some of the commercial firms, supplying them with research results
and courses for employees. By 1980, over 3000 electronics firms existed in the
Santa Clara valley, known since 1971 as Silicon Valley (Saxenian 1994). The
industry grew in a dynamic atmosphere in which firms were created and shut
down or recombined over short periods, and firms acted both in competition with
neighbours, and in cooperation when advantage could be seen in the sharing of
knowledge. Cross-licensing of patents to competitors was frequent, as were
technology agreements to allow progress, and joint ventures which took
companies forward together. Products were second-sourced (alternative suppliers
found in case of difficulties with the first supplier), and this provided for more
firms surviving. The corporate culture was one of horizontal linkages, and little
sense of hierarchy.
Saxenian (1994) contrasts this ebullient atmosphere and long-term success
story with that of the other main computer manufacturing region, Route 128, the
region along the main road running north-south immediately west of Boston. In
contrast to Silicon Valley, Route 128 grew up over a long historical period, from
big companies manufacturing electrical goods, with 1930s links to the defence
establishment in Washington, consolidated in the post-war era. Large firms were
