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Silicon Valley in California and Route 128 in Massachusetts are America's leading centers of electronics innovation and entrepreneurship. The regions are similar in many respects: both trace their origins to university research and military spending, and both faced severe downturns in the early 1980s. Today, however, Silicon Valley is again flourishing while Route 128 continues to decline.
What accounts for this difference in fortunes? Why did Silicon Valley adapt successfully to intensifying international competition, while Route 128 ceded its longstanding advantage in computer design and manufacturing to the west? AnnaLee Saxenian argues that despite similar histories and technologies, Silicon Valley developed a decentralized industrial system that encourages experimentation, collaboration, and collective learning among networks of specialist companies, while Route 128 came to be dominated by a few self-sufficient corporations.
Saxenian demonstrates that Route 128 was slow to adjust to changing markets because skill and technology remained confined within independent firms. In contrast, companies in Silicon Valley created a regional advantage by drawing on local knowledge and relationships to create new markets, products, and applications at a rapid pace. In doing so, they blurred the traditional boundaries between customers, suppliers, and competitors.
The result of hundreds of interviews with executives, entrepreneurs, and policymakers, Regional Advantage highlights the importance of local sources of competitive advantage in a volatile world economy. It also underscores the need to develop regional as well as national and sectoral economic policies.
AnnaLee Saxenian is Assistant Professor in the Department of City and Regional Planning at the University of California, Berkeley.
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