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Regional Advantage: Culture and Competition in Silicon Valley and Route 128, with a New Preface by the Author

AnnaLee Saxenian

3.94 · Rating details · 98 ratings · 9 reviews

Why is it that in the '90s, business in California's Silicon Valley flourished, while along Route 128 in Massachusetts it declined? The answer, Annalee Saxenian suggests, has to do with the fact that despite similar histories and technologies, Silicon Valley developed a decentralized but cooperative industrial system while Route 128 came to be dominated by independent, sel ...more

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Paperback, 240 pages

Published March 1st 1996 by Harvard University Press (first published March 1st 1994)

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Start your review of Regional Advantage: Culture and Competition in Silicon Valley and Route 128, with a New Preface by the Author

Jan 20, 2010 Frank Stein rated it really liked it

A well-done ethnographic study of the different cultures in the high-technology industry in Silicon Valley and the Boston region, coupled with a short history of each.

The Route 128 industry actually started first, after WWII, boosted by the power of MIT and its star pupil Vannevar Bush, who went into the federal government and managed to steer 1/3 of all scientific research contracts into MIT's businesses (how convenient). In 1946 MIT professors even created America's first venture capital compa A well-done ethnographic study of the different cultures in the high-technology industry in Silicon Valley and the Boston region, coupled with a short history of each.

The Route 128 industry actually started first, after WWII, boosted by the power of MIT and its star pupil Vannevar Bush, who went into the federal government and managed to steer 1/3 of all scientific research contracts into MIT's businesses (how convenient). In 1946 MIT professors even created America's first venture capital company in order to fund these start-ups. The military soon became the single largest buyer of semiconductors and circuits from Route 128 and the region boomed. After Vietnam ended the area transfered all its energies into successful "minicomputers."

Silicon Valley was basically created by MIT-refugee Frederick Terman, who moved to Stanford determined to end the West's reputation for being a semi-colonial backwater. He started the Stanford Industrial Park, along with a number of Stanford-based continuing education programs for businesses (e.g. the Stanford Honors Cooperative Program) and he funded Hewlett Packard out of his own pocket. The region got some high-tech military contracts, but its distance from DC kept it undercapitalized.

In the 1970s, however, Silicon Valley's semiconductor industry surged ahead of the then dominant Route 128, and Saxenian shows why. Silicon Valley had an informal culture, one that rewarded constant innovation, mobility, and disrespect for authority. Most of its corporations were headed by 20- and 30-somethings who had already failed at other ventures and yet who managed to create small, nimble companies that operated in large networks of suppliers. Route 128 businesses, on the other hand, tried to mimic General Motors and General Electric, and had older Harvard-educated leaders. They created vertically-integrated behemoths that could not evolve with the times.

East Coast culture and history also exerted a powerful pull against innovation. One simple contrast demonstrates the difference. Hewlett Packard famously created its audio-oscillator in its founders' garage in Silicon Valley, while the now-defunct Digital Equipment Corporation along Route 128 started in the 200 year-old Assabet Mill of the American Woolen Company. As one employee pointed out, in the East everybody knew everyone's family going back decades, and failure was personally devastating. In the West, no one knew where anyone came from and there were no expectations of immediate success.

Often Saxenian belabors this contrast, and she can get fairly repetitive. She also seems to ignore the success of Apple, which operated by closing itself off and yet created innovative proprietary systems.

Still, this is one of the better books on why some industrial regions evolve and thrive and some die out. ...more

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Dec 18, 2020 TEELOCK Mithilesh rated it it was amazing

Shelves: business-leadership, communication-social-skills, leadership-motivation

In her book Regional Advantage: Culture and Competition in Silicon Valley and Route 128 (1994), Saxenian proposes a hypothesis to explain why California's Silicon Valley was able to keep up with the fast pace of technological progress during the 1980s, while the vertically integrated firms of the Route 128 beltway fell behind. She argues that the key was Silicon Valley's decentralized organizational form, non-proprietary standards, and tradition of cooperative exchange (sharing information and o ...more

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Jul 15, 2010 Adam Calhoun rated it really liked it

As I sit in one of the largest concentration of biotech in the country - and probably the largest per capita - I wonder, how did this happen? Certainly there were competing centers that could have become these same hubs. In Regional Advantage, Saxenian sets out to answer this question for the computer and hardware industries. Why did Silicon Valley beat Route 128 so drastically? While she offers a few different arguments for the superiority of Silicon Valley, it's hard to disentangle what, preci ...more

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Jun 21, 2013 JW rated it it was ok

Shelves: old-life

Read Frank Stein's excellent review for the gist. Some other thoughts:

Context:
in the US, the early 1990s saw the emergence of a new school of economic development research, arguing that factors such as regional culture and institutions, and the nature of local economic networks, were as predictive of local growth as the more traditional, quantifiable factors of size and # of firms, capital invested, output value, avg unit costs, etc. -- ie, all those clean and tidy measurables that you'd undou ...more

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Oct 22, 2014 Kangning Huang rated it really liked it

Shelves: directed-reading

This book analyze the difference between Silicon Valley, CA and Route 128, MA. The author tries to answer why did Silicon Valley survived the recession and competition from Japanese competitors during 1980s, but Route 128 did not.

Silicon Valley:
"A regional network-based industry system that promotes collective learning and flexible adjustment among specialist producers of a complex of related technologies."
"Encourage horizontal communication among firm divisions and with outside suppliers and cu ...more

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Aug 28, 2014 Akrabar rated it liked it

This review has been hidden because it contains spoilers. To view it, click here.

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Nov 07, 2010 Luis rated it really liked it

Shelves: san-francisco

This book is very useful to understanding the structural causes of Silicon Valley’s success, showing that it was increased interpersonal and intercorporate sharing that made Silicon Valley continue to succeed after the shocks of the ’80s hammered both Silicon Valley and Boston’s Route 128. Definitely something I recommend to all newcomers to SF/the Valley.

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May 14, 2015 Sarah rated it liked it

Can be difficult to follow, but draws a clear distinction between the practices between the two regions that led to success in Silicon Valley and a slow down in Route 128.

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Apr 09, 2011 Antonio Baclig rated it really liked it

Interesting thesis on the cultural and institutional differences between Silicon Valley and the Greater Boston area that allowed the former to flourish.

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