What got Silicon Valley going is clear --
aerospace for US national security and
NASA. That was it.

IMHO, the article:

(1) Neglects how much of what caused
and/or enabled Silicon Valley really
happened and still happens outside of
Silicon Valley, e.g. Bell Labs in NJ, IBM
near Poughkeepsie, NY, and in Boca Raton,
Florida, Microsoft in Redmond, WA, US DoD,
NASA, and DARPA in DC, CERN in
Switzerland, and Linux wherever.

(2) Overestimates the role of Ph.D.
holders in nearly all of the financial
successes of the companies in Silicon
Valley based heavily on software.

(3) Greatly underestimates the importance
for economic productivity of the main uses
of the work of Silicon Valley, (A)
document preparation that got rid of
typewriters, paper spreadsheets, and graph
paper and (B) digital communications.

(4) For the last 20 years or so of Silicon
Valley, overestimates the role of
originality as illustrated in Renaissance
Florence, Italy.

How Silicon Valley Did Get Started:

US aerospace needed a rapidly flowing
ocean of electronics that desperately
needed digital signal processing from
transistors, integrated circuits, and
microprocessors instead of analog signal
processing from vacuum tubes.

So, aerospace was constantly just
screaming for many multiples of more,
smaller, faster, lower power transistors.
Make a little progress in that direction,
and US aerospace would buy, cost no
object. So, desperate customers, deep
pockets, wanting, in one word, more, and
cost no object.

Before WWII, Bell knew very well that they
needed an electronic amplifier better than
vacuum tubes and started the research on a
solid state amplifier. WWII delayed the
work, but just after the war we had
transistors -- Bell gave it to the world.

Soon the needs of US aerospace from the
Korean War, the Viet Nam War, the Cold
War, and the space race and the huge flows
of US Federal money got us Silicon Valley
and microprocessors. The key background
was solid state physics.

Then, with microprocessors, could attack
that huge time waste in the offices --
word processing or document preparation.
The waste was enormous. So, a PC, some
word processing software, and a printer
would totally blow away any and all
typewriters and did. Presto, bingo, we
got the IBM PC, Intel, Microsoft, Apple,
Lotus, Adobe, Seagate, Western Digital,
Gateway, Dell, etc. Right -- document
preparation.

Then, dialing phone numbers, with some
phone modems, already available for
selected high end needs, got us bulletin
board software, AOL, and a start on social
media.

Then put the TCP/IP stack from BSD into
Windows, and, again, presto, bingo, got
the explosion of the commercial Internet
to replace dial up connections.

Then Tim Berners-Lee, at CERN wanted a
word processing mark-up language to ease
writing newsletters for the particle
physics community to be distributed over
the Internet, then common at research
institutions, and we got HTTP and HTML.

To read the HTTP and HTML, we got Web
browsers. We're talking just a simple
word processing markup language of which
by then there maybe a dozen popular ones
and many dozens more. So, we got Web
browsers for Windows, etc.

Then soon nearly every organization in the
world wanted a Web site if only as an
electronic replacement for a paper
brochure.

Then there got to be a lot of Web sites
and a need to let people find what they
would like -- we got Yahoo and, then,
Google. We needed IP routers, and Cisco
got rich.

People wanted to interact with others, and
we got social media and Facebook.

Meanwhile, we made great progress in the
infrastructure. Especially, Bell Labs to
the rescue again -- GaAlAs heterojunction
solid state lasers and optical fibers for
the data rates needed by the Internet
backbone.

We needed, and slowly got, much more and
better infrastructure -- data
communications, data storage, processors,
main memories, BIOS features, virtual
machine software, operating systems,
programming languages, disk file systems,
and database software, and security
borrowing heavily from the history on
mainframes, lots of hardware
communications standards, and, then, the
great miniaturization of mobile devices.

Then we got a lot more in on-line
shopping, information, news, video, etc.

So, Bell Labs gave us transistors; US
aerospace gave us microprocessors; the
mainframe history gave us infrastructure
software; DARPA gave us the Internet; Bell
Labs gave us the optical fibers to carry
the Internet data; and here we are.

We might pour a little cold water on the
hype about Silicon Valley with two points:

(1) As from Kauffman in

http://www.kauffman.org/newsroom/2012/07/institutional-limit...

and from AVC in

http://www.avc.com/a_vc/2013/02/venture-capital-returns.html...

on average, the VC returns have been poor.

(2) We get another Microsoft, Cisco,
Apple, Google, or Facebook only a few
times each 10 years.

Okay, but, now what?

Maybe next year the world will say,
"Silicon Valley, what have you done for me
lately?".