Why the Valley Went First: Agglomeration and Emergence in Regional Inventor Networks

it has become increasingly fashionable to identify social networks as crucial contributors to regional innovative capacity (Marshall 1920; Piore and sabel 1984; Krugman 1991; stern and Porter 2001). networks have been argued to offer improved customersupplier relations, more efficient venture capital and legal infrastructure, and increased knowledge spillovers between firms and regional institutions. Knowledge spillovers are thought to be particularly crucial to fastdeveloping technologies such as semiconductors and, more recently, biotechnology. spillovers correlate with increased labor mobility (Angel 1989), relaxed enforcement of noncompete covenants (Gilson 1999), and increased labor mobility and brain drain (Marx et al. 2009, 2011). saxenian (1994) makes the functional argument connecting networks and innovative capacity, proposing that silicon valley’s rapid labor mobility, collective learning, interfirm relationships, and informal knowledge exchange gave it a decisive edge in competing against the more secretive and autarkic firms of Boston. nevertheless, there is still skepticism about the causal influence of networks in regional innovative productivity. For example, Kenny and Burg (1999) acknowledge that “all business activity is dependent upon networks” but contend that a region’s network(s) will adjust to suit its technological competencies over time. Where saxenian (1994) sees causal differences in silicon valley and Boston networks, Florida and Kenney (1990, 98–118) see indeterminate similarity and propose that technological trajectories drive regional advantage. turning the argument on its head, the skeptics propose that networks result from—and do not necessarily improve—regional innovative advantage (Feldman 2001). these opposing arguments for and against causality immediately raise the suspicion of coevolution. surely networks influence regional advantage and are in turn shaped by regional success or failure. But much of the current discussion about networks and regional advantage remains static (for important exceptions, see owensmith and Powell 2004), implicitly assuming that networks differ across regions but remain essentially unchanged within them. if this assumption were untrue—and could be cleanly unpacked—the discussion could be greatly enriched. With these goals in mind, this chapter has two objectives: first, to understand how isolated clusters of regional inventors become connected, and in particular, why silicon valley aggregated earlier than Boston; and second, to describe the information flows and creative ecologies of such networks. We begin by comparing the structural histories of the patented inventor coauthorship networks of Boston and silicon valley from 1975 through 1999. Following Fleming, King, and We would like to thank ivin Baker, Jeff chen, and Adam Juda for their help with matching algorithms and illustrations; christine Gaze for her editing; and the Harvard Business school Division of research for support. Most important, we would like to thank all the inventors who spent a great deal of time with us discussing their careers.