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5 questions for Margaret O’Mara on Silicon Valley’s history | American Enterprise Institute

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Our technological progress in the modern world seems so
reliant on developments in Silicon Valley. How did all of that economic power
even develop? What was so special about this place after World War II? Do the
motivations of those early entrepreneurs still align with the interests of
Silicon Valley’s current tech giants? To explore these developments in Silicon
Valley, I spoke with Margaret O’Mara, the author of The Code: Silicon Valley and the Remaking of America.

O’Mara is a historian at the University of Washington. She
writes and teaches about modern America, the history of the technology
industry, American politics, and the connections between the two. She is an
expert on the history of Silicon Valley. She is also a contributing opinion
writer at The New York Times.

Below is an abbreviated transcript of our conversation. You
can read our full discussion here. You can also subscribe to my podcast on iTunes or Stitcher, or download the podcast on Ricochet.

What made Northern
California so different to other places in the US that this giant tech industry
could spring up?

The Santa Clara Valley, later known as Silicon Valley,
started as a fruit-growing region — that was it. But it had one thing that no
other valley in California had: Stanford University. While Stanford in the 40s
and 50s was not the “Harvard of the West,” there was incredible opportunity
that flowed its way because of the westward tilt of military spending.

Stanford does what it can do — because it’s a private
institution with a lot of flexibility in its mission to be entrepreneurial in
this way. So it’s very different from a lot of universities, particularly
public ones. It builds up physics, builds up electrical engineering, creates
labs that are building programs around the most cutting-edge electronics

With the defense contracting going on out there, you might think that the government had a deliberate intention to craft Silicon Valley into what it is today. Is that the case?

Oh, heck no! This is not just a story of big government coming in with giant research labs and command-and-control. Look, it’s the 50s! Ike Eisenhower is president — is Eisenhower a fan of big government? No, he is not.

So it grows indirectly — the money flows to private defense
contractors like Lockheed, which opens its Missiles and Space Division in
Sunnyvale in 1954. It becomes the biggest employer in the Valley until the late

When you look at the longer history, there’s this connection
between government and entrepreneurship. Particular entrepreneurs are engaged
with policymakers in creating a great container. So American society and the
American state — particularly during the Cold War — is creating this

The story of Silicon Valley forces us to hold two contradictory ideas. Government played a critical role. But the story of the Valley is also one of entrepreneurship. It’s not the government’s master plan. Eisenhower didn’t sit at his desk and say, “I shall build a science city.”

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Intel Corporation Chairman and former CEO Andrew Grove (L) congratulates the new CEO of the company, Craig Barrett (R), at a press conference in Santa Clara. REUTERS

So is the existence
of a great technology sector in a place like the Valley dependent on a crisis like
the Cold War?

Well there was a consumer-electronics industry before the
Cold War, even before World War II. It was east coast-based — think RCA. And
there was a nascent computer industry that got its public financing from the
military. But you know, the Cold War creates this tsunami of money, and it
wasn’t because America loved science — it was for these geopolitical

I don’t think we’d be getting 21st-century technology at the time we did if there were no Cold War. But I think it doesn’t necessarily have to be a geopolitical urgency. It can be other things: economic competition, the climate, or something. But there has to be a bipartisan sense of urgency.

So, barring some kind
of emergency that creates a massive influx of capital, is there a recipe in
your book for creating new Silicon Valleys in other places?

Well, Silicon Valley in all its particulars is an unrepeatable miracle, just as Renaissance Florence was. But there are some basics. There’s a recipe for state involvement there, on the model of “Throw a lot of money in its direction and get out of the way.”

This is something that other nation-states have a hard time
with. It’s kind of incompatible with their political traditions. You have
multi-billion dollar projects on beautiful research parks and innovations, but
the government doesn’t get out of the way enough. They haven’t allowed for the
free movement of people and capital, a phrase you hear constantly from Silicon
Valley entrepreneurs.

Immigration is also a big part. And not just the educated
ones like Albert Einstein, but also people like Andy Grove who later becomes
the CEO of Intel, who come into the country as teenage refugees. And I’m sure
the immigration officer who encountered him at the border was like, “Who’s this
geeky kid who doesn’t speak English,” you know?

I’d encourage tech leaders to think more deeply about the
Andy Groves, because there’s a human potential argument when you think about
the long range.

We’re seeing a
“techlash” now, where people are worried about the effects of technologies like
social media and smartphones. Do you think this is a Silicon Valley problem, or
do we just need to have bigger dreams for the technology sector?

Silicon Valley alone is not going to dream big. They’re profit-making companies and they’re making a heck of a lot of money doing what they’re doing now. So, Silicon Valley needs to dream big, but so does America.

But we also should not underrate the aspirations of Silicon Valley. For example, when Mark Zuckerberg talks about connecting the world in very optimistic terms — and up until quite recently, lots of political leaders shared that optimism— he’s building on many decades of technologists saying, “If we put a computer on every desk and we wire them together and communicate by computer, we’re going to forget our gender differences, ethnic differences, and all of the inequalities of the world will melt away. Because we’re going to be in a chatroom.”

I know that sounds silly now, but that optimism about technology is what fuels these companies. They’re the product of that history, whether they know it or not.

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