in 1991 of the role of Stanford Professor and its former Provost, Frederick Terman
The presence of Stanford University was a key factor in the development of the technology enterprise now known as Silicon Valley. More than anything, it was Terman, his students, and the encouragements and opportunities that he gave them that enabled this great enterprise to flourish.5
Stanford University was founded by Leland Stanford, a former governor of California and U.S. Senator who had made his fortune in the railroad industry. From its inception in 1891, Stanford’s leaders saw its mission as service to the Western United States, to serve as a counterpoise to the region’s exploitation by Eastern economic interests.6 Stanford looked to MIT as a model, reflecting the fact that MIT functioned as an incubator of new firms. “Stanford and MIT were both committed to an endogenous strategy of encouraging firm formation from academic knowledge.” The university’s founders believed that it could achieve greatness only if it were surrounded by technology-intensive industries, which, because they did not exist in California at the time, would need to be created.7 Executing this task was the responsibility of Stanford’s Engineering School, which was a “repository of trained people and existing technical knowledge that could be utilized for firm formation, even before the development of advanced research as a spin-off source.” In 1900, California depended on the East for electrical equipment, so Stanford’s first president and a number of faculty members invested in start-ups launched by recent Stanford graduates in the electrical business.8
THE LEGACY OF FREDERICK TERMAN
Frederick Terman grew up at Stanford, where his father was a faculty member, and earned an undergraduate degree in chemistry and a master’s degree in electrical engineering from the university. He earned a ScD at MIT in 1924,
5C. Stewart Gillmore, Fred Terman at Stanford: Building a discipline, a University, and Silicon Valley. Stanford: Stanford University Press, 2004, p. 230.
6"A sense of solidarity permeated the eleven western states in the first half of the Twentieth Century. Westerners complained about having a ‘colonial’ relationship with the East; their raw material base—with corresponding jobs, profits, and economic growth—was ‘plundered’ by distant forces. The region’s perceived exploitation at the hands of eastern interests fueled booster like attempts to build indigenous and self-sufficient local industry" Steven B. Adams, “Regionalism in Stanford’s Contribution to the Rise of Silicon Valley,” Enterprise & Society 4(3): 522-23, 2003.
7Henry Etzkowitz, “Silicon Valley: The Sustainability of an Innovation Region,” pp. 2, 5, 2012.
8Ibid. p. 5. Perhaps the most important spin-off was Poulsen Wireless Telephone and Telegraph, later renamed Federal Telegraph, established in 1909 by Stanford graduate Cyril Elwell with the substantial backing of David Starr Jordan, the president of Stanford’s Engineering Department. Federal Telegraph made major contributions to the early development of radio communications. Sturgeon, “How Silicon Valley Came to Be,” op. cit. p. 19.