Kindle Notes & Highlights
“Local engineers recognize that the quality of the feedback and information obtained through their networks depends upon the credibility and trustworthiness of the information provider. This sort of quality is only assured with individuals with whom you share common backgrounds and work experiences.
infrastructure allowed the region’s start-ups to focus on specific areas of expertise, without the burden of manufacturing every part of a product or performing every organizational function.
As this process of industrial specialization and fragmentation repeated itself, the region developed a diverse and adaptable industrial ecology. The difficulties of any single firm could no longer destabilize an entire industry; the failure of an industry could no longer threaten the entire region.
David Packard, chairman of Hewlett-Packard Corporation, led the formation of the Santa Clara County Manufacturing Group (SCCMG) because of his strong belief that the future of the electronics industry was directly related to the future of Silicon Valley.
2,000 specifications for silicon wafers were in use by scores of U.S. silicon vendors, and the wafers were manufactured in a variety of different shapes. This lack of uniformity created problems of waste, inventory, and planning for vendors and customers alike.
“A small organization can turn on a dime and change direction. You suggest another way to do things and you can get it implemented in a week or two. When you have 10,000 people to change the direction of, it just doesn’t happen that way. What you do, or hope you can do, is to break the organization down into small manageable units so that you can change the direction of one unit at a time.”
Unlike Silicon Valley, where firms clustered in close proximity to one another in a dense industrial concentration, the Route 128 region was so expansive that DEC began to use helicopters to link its widely dispersed facilities.
In Boston, breakfast table talk in city restaurants turns to politics, religion, sex, and business of all types. In Santa Clara, the people to your left and right are almost universally talking about semiconductors, operating systems, networking typologies, interfaces, high technology start-ups, and high technology rocket drops.
Risk-avoidance became self-reinforcing along Route 128.
Its structure and its fees reinforce a tendency toward arms-length relations and exclude most small and medium-sized companies.
One’s personal life and one’s business life seem borderless.
Networking on Route 128 occurred almost exclusively within the large firms, not between them. As a result, information on markets and technologies remained trapped within the boundaries of individual corporations, rather than diffusing to other local firms and entrepreneurs as in Silicon Valley.
Whereas an engineer leaving a Silicon Valley company typically stayed in touch with former colleagues for the rest of his or her career, those who left DEC were often ostracized and completely cut off from the DEC community.
The East Coast is locked into the number of years you’ve been out of school. If you don’t have grey hairs then you can’t be a vice president, even at a start-up. You’ll never find anyone under fifty in the top ranks of the big Route 128 companies. Those companies hand out charts to all the employees showing number of years out of school and pay scales. That’s the trouble with the parochial East Coast business environment, it’s too rigid and conservative. There’s no incentive for someone who’s bright and energetic but has no degrees.
Figure 2. Employment in electronic components and semiconductor firms, Silicon Valley and Route 128, 1959–1980. Data from County Business Patterns.
In addition, a multiplicity of new production techniques were developed based on oxide-masking, diffusion, planar, and epitaxial processes emerged in the early 1960s.
Science!
As a result, Route 128 companies did not turn their attention to semiconductors until a new generation of chip-makers—largely based in Silicon Valley—began to flourish.
Engineering and design were thus isolated from manufacturing; and suppliers, subcontractors, and customers were frequently treated as distant entities or adversaries. As a result, these firms lacked the opportunities for interactive learning and improvement that were built into the structure of the Japanese system.
DEC’s Ken Olsen claimed in the late 1970s that “the personal computer will fall flat on its face in business” and prohibited the use of the term “personal computer” within the company.
By the mid-1980s DEC insiders acknowledged that their biggest adversaries were internal DEC divisions and groups, not other companies.
As a result, DEC’s early PCs were overengineered, overpriced, and undermarketed. It is not surprising that they attracted few customers.
