The Silicon Valley innovation puzzle

Sooner or later discussions about Silicon Valley raise the question whether other countries or regions can learn from this innovation miracle. What is its secret? Or as they say in the Valley: “what's the secret sauce?” What is so special about it? What do you need to become and remain an innovative top region? How can we solve the Silicon Valley innovation puzzle? In order to answer this basic issue, we bring together the conclusions from our interviews with startup entrepreneurs and stakeholders with literature research and our own observations. Two questions are leading: what are the main pieces of the innovation puzzle and what are the pieces missing in Europe and the Netherlands?

As argued throughout this book, the various parts that make up the innovation miracle in Silicon Valley constitute a remarkable and highly developed “Innovation & Startup Model”. The different parts reinforce one another, and as John Seeley-Brown, former Chief Scientist of Xerox, argues, make for a “perpetual innovation machine”. A well-oiled knowledge ecology that encourages the creation of a stream of new firms and stimulates the fast growth of existing companies. An ecology that has led to pioneering companies and pioneering products. Companies and products that are often inspired by disruptive thinking and disruptive technologies. An ecology that is rooted in high trust (openness, sharing) and solid social capital (networks, community) and that is welcoming to outsiders. The core of the ‘Silicon Valley Innovation & Startup Model’ is that all parts are indispensable, stripping the value chain is not an option.

The Silicon Valley story shows that innovative regions have an innovation history. It started with already present electronic giants such as Fairchild Semiconductor, and spin-offs like Varian Associates, Hewlett-Packard, and Intel. The acceleration of its development came later. There was, in other words, a favorable breeding ground for innovation, for R&D, and for the commercialization of new products. The Valley did not start from scratch. The implication is evident: innovation regions are unlikely to flourish in the middle of nowhere. There needs to be some sort of a common innovation history, of early technological pioneers, that provided the right conditions for new innovation initiatives to reap the benefits.