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II. Silicon Valley – The Top Research Cluster in the U.S.

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Introduction: A Valley of Silicon?• Silicon Valley, located

between San Francisco and San Jose, CA

• Home to many of today’s leading companies in computer, Internet and venture capital businesses including Google, HP, Oracle and Sun Microsystems

• Close Proximity to Stanford University and major employer of many of its computer science, engineering and business students after they graduate

• Considered to be the number one “hotbed” for technological development along with Internet entrepreneurship in the U.S.

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What’s so special about the San Francisco Bay Area?

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Great schools fuel great minds

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Silicon Valley

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Silicon Valley today: a scientific/commercial renaissance

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What are the top strengths of doing business in SV?

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The Venture Capital Capital

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Some of the companies founded in Silicon Valley

Count how many companies you’ve heard of….

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Highway 101 – The tech industry’s Madison Avenue

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California's Silicon Valley, the arc of towns stretching between San Jose in the south and San Francisco in the north, is the unofficial capital of the global computing industry. Far from making geography obsolete, the internet has in some ways made it more important than ever. The best engineering talent generally wants to live where the top employers of software engineers are located. And any company that wants to hire loads of top computer programmers needs to be present in the Valley to recruit them. Meanwhile, one major source of venture capital financing for new startups is rich tech company founders who've already cashed out. And regardless of origin, top VCs like to locate where both startups and potential buyers of young companies are thick on the ground — Silicon Valley. Yet, while past technological revolutions have led to explosive urban growth, the impact of the technology boom on the Valley has been different. Strict zoning rules have prevented the vast suburban areas from urbanizing, and already-dense San Francisco is resistant to becoming even denser. The result has been skyrocketing housing prices that have created windfalls for people who bought property at the right time but that make it difficult for working-class people to share in the Bay Area's growing prosperity.

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The Origins

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The Early Years

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The Early Years

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Waves of Innovation 1950 - 2010

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Silicon Valley’s transistor and computer sector had a clear role in drawing such a large population increase

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The heady 90’s of high flying stocks & bonuses

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The dot-com bubble

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Cash or stock, you make the call

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Cash or stock, you make the call

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A win-win way to recruit in Silicon Valley

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2011: Largest venture capital deals

Greater Bay Area

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2011: Largest IPOs in the Greater Bay Area

Free On-line Games

Biotechnology company transforming plant-based sugars

into high-value oil

Social business software

Professional Networking

Online Music

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2012: Largest venture backed companies

Greater Bay Area

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2012: Largest IPOs in the Greater Bay Area

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• Silicon Valley Ranked #1 with 226 private tech companies acquired.

• Silicon Valley was home to nearly as many private tech companies that were acquired as the rest of the Top 5 metro areas combined. 

Source: www.privco.com

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Industry Make-up

Source: 2006 Bay Area News Group

Hewlett-Packard and Apple, focusing solely on computer sales, maintain a strong position

More than half represented by “Other” – (e.g. companies specializing in business software and network equipment)

Apple and HP make the most profit BUT many opportunities for specialized companies like Sun Microsystems and Oracle

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Microsoft and Apple, Inc

• Competition between Microsoft (Seattle) and Apple (Silicon Valley)

• Race between the companies rooted in animosity over “who really invented the PC”

• Microsoft has always been ahead of Apple. Apple been making up for this in its recent renaissance iPod, iPhone, iPad, etc…

• Microsoft is still the leader in the operating systems market

Video: Apple vs. PC commercialsVideo: Pirates of Silicon Valley trailer

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Internet Integration

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Stanford Research Park• technology park located in Palo Alto on land

owned by Stanford University

• Built in 1951, as Stanford Industrial Park, it claims to be the world's first technology-focused office park.

• played a key role in creation of Silicon Valley

• Early tenants included HP, GE and Lockheed. Still home to HP and until recently Facebook

• (7 km²) 162 buildings holding 23,000 employees who work for 140 different companies.

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“Stanford University fosters a climate where collaboration with industry thrives, generating both breakthrough discoveries and the science and technology that can support continuous innovation. With a long history of vey productive relationships with corporations of all sizes, from startups to mature, successful enterprises, Stanford provides firms with education, research partnerships, consulting and connections to world class faculty and students.”

James F. Gibbons, Special Counsel to the President for Industry Relations, Stanford University

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“If western industry and western industrialists are to serve their own enlightened and long-range interests effectively, they must cooperate with western universities wherever possible, and strengthen them by financial and other assistance.”

Stanford Research Institute, Honors Cooperative Program, Stanford Industrial Park