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Innovation Clusters

Six perspectives on Silicon Valley

Curricular materials created for the 2016 SAIL seminar:

Silicon Valley as an Innovation Ecosystem

Silicon Valley is the epitome of innovation clusters, but discussions of innovation often approach it from very specific points of view or focus on very specific aspects of Silicon Valley. Its almost mythical status and its sometimes romanticized, sometimes vilified culture make it difficult for students with no personal experience to understand Silicon Valley. This module aims to give students a more holistic view of the Silicon Valley innovation ecosystem through six different perspectives.

This module could fit naturally into a course on innovation or entrepreneurship, but it could also fit in an Industrial Organization type economics or Urban Studies course.

The most effective way to use the modules would be to devote three to six sessions to them, interspersed throughout the course. The modules do not require any particular prerequisites and can be included in introductory or more advanced courses.

Economics of Innovation and Entrepreneurship: Advanced economics course studying models of innovation and entrepreneurship and the history of technological innovation

This module appears towards the end of the course as part of a unit on innovation clusters. It provides a multi-dimensional real-life example of an innovation cluster, the most famous one, to complement the more abstract, theoretical treatments of innovation and entrepreneurship.

In Pursuit of Innovation: Introductory hands-on innovation course

This module consists of six separate submodules that are mostly independent, and any combination of those could be added as a stand-alone unit in an existing course.


Goal: To gain a multi-dimensional understanding of the Silicon Valley innovation ecosystem.

Higher order thinking skills: Understanding an innovation cluster requires students to reconcile sometimes conflicting, even contradictory, perspectives and to consider the complexity of economic and social phenomena in a vibrant community.

Multidisciplinary analysis: The various perspectives considered in the submodules use different approaches. Students will be exposed to historical, sociological, economic, and business thinking.

Other skills: Students will need to use critical thinking skills to evaluate arguments, explanations, and narratives that appear in this module. A number of people (in and outside of academia) have fairly strong ideological stances that may bias their explanations, models, or narratives in connection with innovation and Silicon Valley, and students will hone their skills in identifying these potential sources of bias.


Each of the six submodules starts with a list of sources (readings, videos) that provide background for discussion (see Resources & Materials). Each submodule can be an hour-long class session, but two or three units could be shortened and combined into one class as well. It works best to discuss these six units in the order in which they appear.

Perspective 1: History of Silicon Valley

Innovation clusters are recognized as crucial components of an economy’s innovation engine. The goal is to gain insight into how such a wildly successful innovation cluster came to be.


  • A New Age of Entrepreneurship
  • Early dominance of defense funding
  • The history of computing is at the center of the rise of Silicon Valley

Perspective 2: Stanford University

Most students of innovation clusters agree that a university is a necessary component of a successful cluster. This is certainly the case for Silicon Valley, where Stanford has always played a central role in the ecosystem. Students will explore the role of Stanford today and, more broadly, the role of universities in innovation clusters.


  • Florida’s three T’s: technology, talent, tolerance.
  • Stanford’s special place in the Silicon Valley ecosystem
  • The relationship between basic science, applied science, and innovation
  • Greed and Silicon Valley
  • The role of universities in innovation ecosystems

Perspective 3: Science, entrepreneurship, and QB3

While the popular perceptions of startup culture that has recently burgeoned in the US often feature a new app or software startup, entrepreneurship can play a very important role in science-driven innovative products and even in creating new scientific discoveries. This submodule focuses in on startup culture in the natural sciences.


  • Science incubators
  • History of QB3
  • Funding models: Angel investors, venture capitalist firms, and corporations
  • Mission Bay Capital
  • Success stories
  • History of corporate research labs

Perspective 4: Band of Angels

Innovation can only flourish if there is a healthy funding environment. Students learn about funding by studying one very famous group of angel investors and their funding approach, their philosophy, their views of Silicon Valley.


  • Who are angel investors?
  • Shaping startup culture

Perspective 5: The Cultures of Silicon Valley

The hope is that creating an innovation cluster will ignite the local economy and bring progress and prosperity. The spectacular success of the Silicon Valley innovation cluster has certainly changed the communities around it significantly. Students will learn about some of the impacts that the cluster has had on those communities.


  • Is Silicon Valley culture the future?
  • Silicon Valley and San Francisco
  • Meritocracy and the power of social networks
  • “Don’t be evil”: Corporate culture versus counter culture

Perspective 6: The inside dissenter: Jaron Lanier

Silicon Valley has become synonymous with the new economy that turns on knowledge and information. Students will consider the broader implications of the transition from a manufacturing economy to an information economy. Jaron Lanier has been a Silicon Valley insider who has thought, speculated, and written extensively about those implications, and his perspectives will form a stimulating starting point for discussion.


  • Does technology empower people?
  • Power and information superiority
  • Capitalizing off free information (e.g. Google Translate)
  • Cognitive diversity and cultural homogeneity in the tech world
  • Staying on the “tech track”: Young people’s attraction to the tech elite

Dissemination Strategies

Teaching Notes

The balance between lecturing and discussion depends on the background and preferences of the instructor. If the instructor has some significant background knowledge of Silicon Valley, then they should modify the units to include that personal perspective and lean more towards lecturing. An instructor without much personal experience or background knowledge can still teach these six submodules in a productive way.

Because the topics covered reach so many aspects of society, culture, and the economy today, it is very likely that any instructor will be able to bring some personal perspective and expertise to the discussions. The same will usually be the case for the students, who will have significant personal experience and knowledge of the technologies and the culture that originate from Silicon Valley.

After reading the sources suggested and perhaps consulting other sources as well, s/he should identify focal points and emphases for the discussions, and then run a largely discussion based class.

Resources & Materials

The Silicon Valley Innovation Cluster: Six Perspectives

Outline with full submodule descriptions, including sources, topics, and assessment questions

History of Silicon Valley

Entrepreneurship Strengthens a Nation | Steve Blank, Stanford Engineering

A history of Silicon Valley and “lean” entrepreneurship

“Get Rich U” | Ken Auletta, The New Yorker

The history and multiple perspectives on the relationship between Stanford and Silicon Valley

Secret History | Steve Blank, steveblank.com

The rise of the Silicon Valley innovation ecosystem and its relationship with defense research

Computer History Museum

A longer history of computing via online exhibits (this museum is only a few blocks away from Googleplex)

Stanford University

“The Flight of the Creative Class: The New Global Competition for Talent” | Richard Florida, Liberal Education Vol. 92, No. 3

Tech, talent, tolerance, and the creative economy

Innovation as the Crux of Entrepreneurship | John Hennessy, President, Stanford University

The evolving relationship between universities and commercial progress

“Stanford and its Startups” | Nicholas Thompson, The New Yorker

Investing in startups founded by Stanford students

Science, entrepreneurship, and QB3


General background on QB3

Mission Bay Capital

Venture funding connection

Success Stories

ViewPoint Therapeutics

Cell Design Labs

Band of Angels

About the angel investor group

Angel Podcast

The Cultures of Silicon Valley

Silicon Valley Culture Project

Long-term ethnographic study of the people and communities whose lives are connected to Silicon Valley

 “How ‘Silicon Valley’ nails Silicon Valley” | Andrew Marantz, The New Yorker 

“Hackers? Techies? What to call San Francisco’s newcomers” | Geoff Nunberg, Fresh Air, NPR 

“How Silicon Valley became the man” | Justin Fox, Harvard Business Review 

The Inside Dissenter

Jaron Lanier

“You are not a gadget” | Jaron Lanier

“The Visionary” | Jennifer Kahn, The New Yorker

Who Owns the Future?  | Jaron Lanier

Outcomes and Significance

Student Assessment

Since students will discuss a variety of sources and perspectives, it’s best to assess their understanding through questions that ask them to synthesize and reflect upon the topics covered. In the outline (see Resources & Materials), each topic includes assessment questions. Since the questions are not focused on memorizing, assessment need not take place in class, but could be assigned outside class. Assessment questions could also be used as discussion prompts in class and then still used in the assessment.

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