Apr 21, 2015

Japan’s First Transistor

I read the following blog post last week. I’ve met David Manners a few times during my marketing days and always looked forward to his visits. Quite often, his posts lead me to do a little more research, as is the case today. He wrote:

http://www.electronicsweekly.com/mannerisms/yarns/man-made-japans-first-transistor-2015-04/#sthash.Neq3sWy4.dpuf
David Manners, 4/17/2015

The Man Who Made Japan’s First Transistor

Tadashi Sasaki went to America in 1947 to investigate ways of improving the vacuum tube technology used by his firm Kobe Kogyo.He visited Western Electric’s tube factories and had access to Bell Labs’ scientists one of whom was John Bardeen.Just before Christmas 1947 Bardeen hinted to Sasaki that they’d found something interesting.In 1951 Bardeen was more forthcoming, telling Sasaki about transistors and giving him some single-crystal germanium.In 1953, Kobe Kogyo became the first company in Japan to make a transistor.


I’m well aware of the post-war situation in Japan, the invention of the transistor at Bell Labs and the eventual licensing of the transistor technology. I’m also burdened with the Japanese stereotypes that tended to subdue individuals pursuing crazy ideas. So something about David’s post seemed to be missing.

Tadashi Sasaki was born in a small fishing port on Japan's western coast but grew up in Taiwan, then a Japanese colony. His father, a former samurai from the garrison at Hamada castle, was a teacher there. Sasaki studied electrical engineering at Kyoto University. During World War II, he was assigned to an aircraft maker called Kawanishi Machine Works, based in Kobe, where he did research on vacuum tubes for use in telephones, wireless, and radar.

Kawanishi separated its vacuum tube business as a new company called Kobe Kogyo. In post-war Japan, a top allied priority was the reconstruction of the telephone system, so many doors were opened. As you know, vacuum tubes were key components in telephone switching. In 1947, Sasaki was sent to study modern methods of tube production at Western Electric's factory in Allentown, Pennsylvania. When he didn't understand something, Sasaki was permitted access to the Bell Telephone Laboratories in nearby Murray Hill – none other than John Bardeen.

Timing is everything. Shortly before Christmas 1947, just as he was about to return to Japan, Sasaki had a meeting with Bardeen. Normally the most mild-mannered, soft-spoken of men, Bardeen seemed uncharacteristically excited. He told his Japanese visitor that he and his coworkers had discovered a most interesting new phenomenon but he was not at liberty to say what it was.

In September 1951, Sasaki happened to be in the U.S again, meeting with RCA on subminiature receiving tubes. Sasaki and a colleague, Arizumi Tetsuya, heard about the transistor symposium Bell Labs for its licensees. They took a train to Murray Hill and found Bardeen, who told them all about the transistor. Kobe Kogyo signed a licensing agreement with RCA, which had a cross-licensing arrangement with Western Electric. In early 1953, ahead of all other companies in Japan, Kobe Kogyo became the first company in Japan to bring the transistor to production. The company's first transistorized product was a car radio it supplied to Toyota, which in 1955 was just beginning to produce passenger cars in earnest.

I had never heard of Kobe Kogyo. It was destined to become one of those companies that disappeared. They failed to invest heavily in transistors, since they had a vacuum tube business to defend. Matsushita, linked to Toyota, pushed them out of the car radio market. Eventually, the banks stepped in and forced an acquisition by Fujitsu in 1963 – you may be familiar with Fujitsu-Ten, that’s what happened to Kobe Kogyo. Taking the blame for the company’s failure, Sasaki resigned from the company's board. His only reasonable option was to return to Kyoto University as a professor.

This is all well within the stereotype that I’ve been taught over the years. But what happened next wasn't.

Returning from the United States in December 1963, he stopped for a layover in Honolulu. He had a chance meeting with Saeki Akira, senior executive director of a consumer electrical appliance maker called Hayakawa Electric Industry. Hayakawa had purchased vacuum tubes from Kobe Kogyo in the past. Over a meal on the terrace of his hotel at Waikiki Beach, Saeki invited Sasaki to join Hayakawa as head of the company's newly formed industrial equipment division. It was an exceptionally brave decision for him to accept. It was more characteristic of American entrepreneurs than my Japanese stereotype. Instead of taking a comfortable window office, he chose to jump from the frying pan into the fire – from a bankrupt firm to one that was in bad financial shape. Hayakawa was struggling so badly that it was believed it was about to be acquired by Hitachi.

He couldn't resist the challenge. "Everybody wants to join an elite company," he said, "because they want to have it easy. But I'd rather try and rebuild a company that has collapsed." A former colleague once said of him, "He has tremendous drive, and he's extremely interested in getting new technology applied in new product areas… Dr. Sasaki loves to talk, he loves to give ideas, he loves to encourage people to get into new areas – he's a tremendous man." This is not the type of description I expected.

At Hayakawa, his energy soon won him the nickname "Doctor Rocket." "Once he takes off, he's unstoppable," said Wada Tomio, a researcher who worked under Sasaki at Hayakawa for many years.

Hayakawa himself, the founder, was also an energetic entrepreneur. In 1915, his firm manufactured a mechanical pencil, dubbed in English, for export purposes, the Every-Ready Sharp Pencil. To this day, mechanical pencils (which are commonplace in Japan) are commonly known by the generic name shya-pu penshiru.

Later, on the lookout for promising new products, he discovered an early crystal radio set that had been imported from the U.S. One mark of a true entrepreneur is a refusal to be put off by lack of knowledge. Despite an almost complete ignorance of the principles of radio – or of electricity for that matter – Hayakawa decided to make radio sets. This was in 1924, the year before radio broadcasts were scheduled to begin in Japan. Hayakawa Electrical Industries would be the first Japanese company to make radios, which they sold under the name Sharp, the old brand from mechanical pencil days.

This spirit and enthusiasm for new, yet often unrelated, ideas is shared by Sasaki. Years before joining Hayakawa, one of Kobe Kogyo's picture tube customers was a Los Angeles-based television assembler called Packard Bell. This firm had entered Chapter 11 owing the Japanese firm a lot of money for parts already shipped. Sasaki went to L.A. to see what he could salvage.

Instead of forcing them to sell assets, he suggested product ideas to generate sales. One of the things he suggested was a wireless remote-controlled garage door opener. It was easy to produce, and it became a big hit product. When he joined Hayakawa, Sasaki remembered this asked himself what sort of product could pull the ailing firm out of trouble? His conclusion: an electronic calculator.

The idea of a calculator came from an obscure English company called Sumlock Computometer. The “Amita” was based on vacuum tubes that Kobe Kogyo manufactured. Perhaps Sasaki was at the right place at the right time, or more to my entrepreneurial stereotype, he knew a good idea when he saw it and matched it with the right technology when it finally arrived.

These were desktop calculators, some with CRT displays – not what we used in college. The leaps from vacuum tubes to integrated circuits to portable pocket calculators took vision. Around 1965, two men far apart geographically (yet similar in their strategic thinking) independently come up with the idea of the calculator as something more than an office tool. One was Sasaki. The other was Patrick Haggerty, chairman of Texas Instruments.

TI was one of the first companies to put transistors into production and it was clear to Haggerty that they needed a product to demonstrate its usefulness. Therefore, he launched an R&D program to build a pocket transistor radio. Eventually, they partnered with a small company to manufacture radios for them. That was their first step into the consumer realm. The next step was into calculators.

TI could conceivably also have been a major player in consumer electronics. In 1967, the R&D team prototyped the world's first handheld calculator. They had integrated a desktop machine into just four chips and a product slightly larger than the transistor radio. Then, as Jerry Merryman, one of Kilby's collaborators on the project recalled, things started to go wrong: "What they did was they assembled a marketing task force.” They essentially concluded there was very little market.

Conventional wisdom in Japan was similar, but Sasaki pursued his vision. He was convinced that calculators needed to be truly portable and that MOS (Metal Oxide Semiconductors) technology was the key to integration and low cost. At the time, the three biggest Japanese chip makers were NEC, Hitachi and Mitsubishi. None of them were interested, they all viewed LSI MOS-ICs as untried technology, bound to fail. A logical opinion at the time; it was extremely difficult to produce reliable MOS components. Sasaki continued to aggressively pursue his vision; he was desperately searching for a company which could supply MOS-ICs.

Sasaki flew to the U.S., where he visited Fairchild and most other semiconductor companies from Silicon Valley to the East Coast. "We're too busy making chips for the Air Force, we don't have any spare capacity for you." (If you recall your Fairchild history, you know how important the military market was in the early days.)

His last visit was at Autonetics, the electronics arm of the giant aerospace conglomerate North American Rockwell in Los Angeles. If you've seen Jim William’s artwork, you’ll recognize Autonetics as a manufacturer of defense products, too. Sasaki offered an order worth tens of millions of dollars. But profit margins would be low. He thought he had convinced Fred Eyestone, who headed Autonetics. But once again the answer was a polite, "Sorry, we'd like to help you, but we're fully booked."

He went to LAX airport to fly home. Then, just at boarding time, he was paged: "Would Dr. Sasaki please come to the information desk?" There he found a message that a helicopter was waiting to fly him back to Autonetics. Timing is everything.
Sharp QT-8D, under the hood

In September 1969, Autonetics shipped its first 25,000 MOS chips. The following year, Sharp produced one million calculators equipped with Autonetics/Rockwell MOS-ICs.

Today, Sharp is still making calculators. Rockwell is no longer making calculator chips. Toshiba replaced Rockwell and soon migrated to new C-MOS (Complementary MOS) technology. CMOS calculators would be truly portable. Sharp finally chose to make their own chips.

As an aside, Sasaki felt an obligation to Robert Noyce for licensing the planar patent. Noyce in turn, asked for advice after he left Fairchild. Sasaki shared his thoughts on a single-chip calculator, while in parallel had invested 40 million yen into a company run by his old Kyoto University friend, called Busicom. As you are now predicting, Busicom contacted Intel in 1969 to develop ICs resulting in the single microprocessor known as the 4004. I’m sure you know the rest of that particular story.

I recommend reading Bob Johnstone’s book. It certainly reversed my stereotype. Here was a story about an engineer with boundless energy, creativity, charisma and the drive to break with convention to follow his vision.


NOTES
http://www.xnumber.com/xnumber/mister_rocket.htm
http://www.vintagecalculators.com/html/history_of_electronic_calculat.html
http://www.vintagecalculators.com/html/rockwell.html
http://www.barnesandnoble.com/w/we-were-burning-bob-johnstone/1111985584?ean=9780465091188 “We Were Burning: Japanese Entrepreneurs and the Forging of the Electronic Age”, By Bob Johnstone

http://www.jamesbutters.com/kobekogyokt75.htm
http://www.radiomuseum.org/dsp_hersteller_detail.cfm?company_id=7428
http://ethw.org/Oral-History:Tadashi_Sasaki

Feb 27, 2015

The Heart of the Matter

Sometimes you get off track temporarily, and sometimes you change course completely. I have many interests and Analog Footsteps is only one of them. I’ve been off track lately. Cycling is another interest and usually there is almost no crossover between the two. Cycling picked up for me in the fall and consumed a bit more of my free time. So did another chip veteran’s story. If I were writing “Digital Footsteps” then the two tracks would have been aligned perfectly.

A friend sent me a link to a story about an executive from Intel who had a stroke. His recovery was amazing, given the severity of the stroke, and now he’s planning to ride his bicycle across the country to raise awareness for the American Heart Association. So I began to research the story of Sean Maloney and it fueled my own bike riding. Although he received the Lee De Forest Award from the Radio Club of America (for WiMAX), Sean was not an analog circuit engineer. Sean’s background is in software and microprocessors – although he does concede that analog engineers are more and more important. Accordingly, he wouldn’t normally be of interest for this blog but portions of his story are closer to my own than many of the others that were recounted in the cloud-space occupied by Analog Footsteps.

Born on July 5th, 1956, Sean Maloney grew up the Lewisham district of South East London. It was a rough place to be a kid. He was the youngest of six, the grandson of a dock worker, and got kicked out of school at age 15. In the 1970s, he sold left-wing newspapers outside the docks in London for the Socialist Labor League, a group pitched against the neo-Nazi movement. Sean organized anti-government demonstrations and used his passion to recruited new members while developing his charismatic speaking style. “That boy has a skill,” his father told Sean’s mother once, “He’ll do something great with it or something terrible. Either way, he’ll inspire people.”

Sean attended Thames Polytechnic in London – formerly Woolwich Polytechnic prior to 1970 (and now the University of Greenwich since 1992). However, he didn't finish his degree. Instead, he became interested in programming and discovered an enthusiasm for computing. He worked briefly at Barclays writing mainframe software, and then joined Intel in the UK office. “I joined Intel because of the microprocessor. I believed, like many people, that the microprocessor was going to change the world.” He said, “I came to Intel for a pay cut. I was in software, and deliberately came to Intel because I believed the microprocessor was it.” “If not the 386, then the 486 ...eventually they would rule the world.” He was right.

“I started out as a field applications engineer with responsibility for LAN technology,” said Sean. And constantly promoting Intel, he added “we created the first LAN networks. Later on, we built Wi-Fi.” Sean rose through the ranks; applications engineering manager, then country manager and then director of marketing for Intel Europe. In less than 10 years, he had the unique good fortune to be hand-picked by Andy Grove to be his technical assistant. It wasn’t luck, of course, he relentlessly pursued Grove for the position. Grove needed someone with knowledge of the Internet, network bandwidth and communications. But Sean also brought a gritty determination and work ethic, a visionary quality and was a truly gifted, passionate, inspiring speaker.

He said Grove was the first boss who totally knew what he was doing. “Some days, he would really piss me off because he would say to me, ‘It’s not good enough. It’s not good enough.’ And then, late at night, he would call me at home and he’d say, ‘I know I went too far.’” He said Grove kept the pace red hot. “He’s very kind as well. He didn't come across as being kind at work, but he was really kind.”

Sean rose quickly to EVP of Intel Communications Group, Chief Sales and Marketing Officer, and co-GM of the Architecture Group. Eventually, Sean was being touted as next in line to be CEO. Along with a punishing work schedule and global travel, Sean was an avid sculler. (“Rowing” is a generic term, I've learned. Athletes with two oars – one in each hand – are scullers. Athletes with only one oar are sweep rowers.) During the Olympics in 2008, while in Beijing on business, he managed to get a boat and permission to scull down the Olympic course at Shunyi. He still recalls the awesome feeling of rowing down the lanes where the world’s best would compete a few days later.
Sean Maloney at the Shunyi Olympic Rowing-Canoeing Park in Beijing




Then he had a stroke.

On February 18th, 2010, his youngest daughter, Catherine, – a premature baby who was still on a respirator – almost died. Sean was away on business and chartered a private plane to fly home to be at Catherine’s side.

By Sunday, Catherine’s condition had stabilized and that afternoon he felt normal enough to run the Stanford Dish, a hilly loop near Stanford University. He ran with his son George, competitive as usual.

Around 4 o’clock, he had an awful headache and felt “really weird,” he told George. “I went up and sat on my bed,” he said, “and the stroke happened.” His carotid artery seized up and – bam!

Sean’s stroke resulted from a clot in his left carotid artery, the main supplier of blood to the brain’s left hemisphere. The left hemisphere controls movement in the right side of the body and, for most people, speech as well. So he couldn't talk. The doctors didn't know whether he would ever walk or talk again.

During his first week in Stanford Hospital, he was frustrated, angry and impatient. “By Wednesday or Thursday, I was thinking, ‘How can I come back?’” he recalls, adding, “I had to get back.” A few days after the stroke, the right side of his body came back to life. One of the first words he was able to croak out was “now!” Ten days later he was heading home to Palo Alto. Margaret remembers driving Sean home as he excitedly pointed and grunted directions: “Uhhh … Uhhh … Uhhh!” He was taking her to the rowing club. Margaret recalled “With his left arm, he lifted the boat. He uncovered it, washed it off, and put the cover back on.”

The next morning Sean appeared, dressed in his rowing clothes and pointing toward the car. Margaret called Jean-Pierre van Tiel, Sean’s rowing buddy from Intel. Sean and J.P. took out a double scull. In the weeks that followed, he started rowing alone, at first in circles (“I nearly cried,” he says) but straighter and straighter each time.

Learning to speak has been his toughest challenge. The stroke destroyed a walnut-size section of his brain that produces language, so he had to learn to speak from the right side of his brain. To help him relearn the “flow and melody of speech,” speech pathologist Lisa Levine Sporer says they read poetry  Keats, Byron and Tennyson, his mother’s favorite  standing up, because talking to 1,000 people is Sean’s natural way of speaking.

Once a month the doorbell would ring and Margaret would open the door to find Steve Jobs asking whether Sean could come out and, well, play. “Like this nice, giant adult kid,” Margaret recalls. They occasionally walked and biked around the neighborhood together.

On Jan. 3rd, 10 months after suffering his stroke, Sean Maloney returned to Intel.

Determined to prove his worth, he led the company’s business in China, but he got passed over for the CEO position and decided to retire and focus on preventing strokes in others. He became chairman of the American Heart Association’s Silicon Valley Chapter. The viral success of the Ice Bucket Challenge for the ALS Foundation gave him the idea for the “Heart Across America” bike ride. He will ride his bike from Palo Alto to New York City to raise money and awareness about stroke and heart-attack prevention. He will launch his ride on March 22nd. It will be “the second-hardest thing I've ever done.”

And he’s recruiting friends – execs at companies such as Apple, Hewlett-Packard, Qualcomm, Dell and Google – to ride at least part of the 5,000-mile route with him through San Diego, Dallas, Chicago and a dozen other cities, where the American Heart Association will host events. He’s creating a movement and reaching out to everyday cyclists like me to join him for a day or even a few hours.

This is not a complete course change for me, however, just a little shift. I’ll get back on track with more analog stories. But for now, I’m riding for Sean. I donated. I tell people about arterial ultrasound scans. I had the scan, myself (clean). I rode over 1,400 miles in January as a fundraiser, with friends and coworkers pledging a penny or a dime per mile. And I’ll ride a few days with Sean in California and a few more days in Mississippi. If you are a circuit cyclist, consider riding with us (www.heartacrossamerica.org). If you are feeling charitable, donate (heartacrossamerica.kintera.org/todd_nelson). If you have the classic profile of an analog guru, please get the scan. If you are an endurance athlete and feel immortal, get the scan anyway.
Todd Nelson (me) and Sean Maloney after a bike ride

I've spent some time with Sean. He’s kind and appreciative but clearly very determined and mildly impatient. You can’t help but be inspired. Sometimes I forget he had a stroke and see him as a cyclist in training for a long ride. Knowing how his brain was affected by the stroke, it’s amazing he can ride at all. But he’s so eminently likeable; you just want to join him.




“I am incredibly grateful for my life” says Sean. While he appreciates his family more than ever, he has the same inspiring grit and the same drive that got him this far. “Never give up,” he says. “No matter what anyone says, you can attain your goals if you never give up.”

Sean Maloney is back.

NOTES

“Intel's Sean Maloney: The man who couldn't speak” By Patricia Sellers, September 9, 2011, http://fortune.com/2011/09/09/intels-sean-maloney-the-man-who-couldnt-speak/ This article is from the September 26, 2011 issue of Fortune.

“Sean Maloney Looks Back” December 26, 2012 (https://www.intelfreepress.com/news/sean-maloney-looks-back/3627/)

“Andy Grove: How to Be a Mentor” By Andy Grove, September 22, 2011 (http://www.bloomberg.com/bw/magazine/andy-grove-how-to-be-a-mentor-09222011.html )

“Intel’s executive vice-president Sean Maloney on the future of Culv and how he’s solving a chicken-and-egg problem with cheap chips” Jack Schofield, Wednesday 10 June 2009 (HTTP://WWW.THEGUARDIAN.COM/TECHNOLOGY/2009/JUN/11/INTEL-CULV-SEAN-MALONEY )

http://www.heart.org/HEARTORG/Affiliate/Sean-Maloney-joins-local-board-to-advance-stroke-awareness-in-Silicon-Valley_UCM_463050_Article.jsp
http://fortune.com/2014/10/30/intel-maloney-bike-ride-stroke/
Sean Maloney’s Rowing Recovery” Published by David Churbuck

“Back in the running and rowing” By Kathrin Hille, February 26, 2012, The Financial Times LTD (London) http://www.ft.com/cms/s/0/8a0ddbb8-5d6b-11e1-889d-00144feabdc0.html

Feb 9, 2015

Fairchild, Oldsmobile - Spin-off Comparison

I grew up in Michigan as a "car guy" with virtually no awareness of what what happening in Silicon Valley ...when everything was happening in Silicon Valley.  Detroit was the place to be.  And I went, only to find out that I didn't want to be there because it wasn't what it used to be.  After accepting a generous package to voluntarily quit General Motors, I moved to Silicon Valley.  Seeing both places up close and personal, I concluded that they had nothing in common - in fact, they were polar opposites.  Imagine my surprise to find a research paper proposing that they were quite similar!

To compare the two areas in context, the study focused on the period when growth and spin-offs were rampant.  For Silicon Valley they chose 1957 through 1986 and for Detroit they chose 1900 through 1924.  So, for those of you who think of Detroit as GM, Ford and Chrysler (and GM as Chevy, Buick, Olds, Cadillac, GMC and Ponitiac; Ford as Ford, Mercury and Lincoln; and Chrysler as Chrysler, Dodge and Plymouth) as I did, that's not they way it looked back in 1924.  But let's start in 1895.

As the semicoductor industry did not start in Silicon Valley, the automotive industry did not start in Detroit.  The early companies were in New York, New England and the closet to Detroit was Cleveland.  And these companies did not start out building cars with internal combustion engines - the technology wasn't there yet.  Those companies were established horse-drawn carriage makers, sewing machine and bicycle manufacturers who branched out.  The technologies were steam, electricity and eventually gasoline.  The first significant gasoline-powered car was from the Olds Motor Works - founded by Ransom E. Olds in Lansing, MI, about 100 miles from Detroit.  Olds used two main sub-contractors in the Detroit area: the Dodge Brothers, and Leland & Faulconer.

Meanwhile, a young Henry Ford was working for Edison and left to start his own company: the Henry Ford Company.  But Henry Leland (subcontractor to Olds) was brought in to manage the company so Henry Ford quit - and Leland renamed it Cadillac.  Henry Ford then started the Ford Motor Company that we know today with significant investment from the Dodge Brothers (subcontractor to Olds, and now the captive engine supplier to Ford).  Eventually, the Dodge Brothers started their own company.  So now we have Cadillac, Ford and Dodge as spin-offs of Olds.

Ransom E. Olds was pushed out of the Olds Motor Works and he started REO (presumably they made the Speedwagon); another spin-off.  Two other Olds defectors, Benjamin Briscoe and Jonathan Maxwell teamed up to start the Maxwell-Briscoe Company in New York (with financing from Buick).  It struggled, succeeded, was bought out, then spun out in a new location near Indianapolis and struggled some more.  New management moved the company to Detroit where it did quite well.  Much later, during another struggling period, Walter P. Chrysler was brought in and it eventually became the Chrysler Corporation.  Chrysler had just left the Willys-Overland company (the original Jeep), but his early career was at Buick.

Henry Leland also founded the Lincoln Motor Company after selling Cadillac to William Durant.  Durant was the head of Buick and on a buying spree that eventually became General Motors.  That spree went too fast and Durant was pushed out and so he founded Chevrolet with Louis Chevrolet (a former racer employed by Durant at Buick).  Years later, General Motors acquired Chevrolet and things began to look like what I remembered.  Incidentally, both Mercury and Plymouth were never independent entities; they were creations of Ford and Chrysler, respectively, for marketing purposes and both are now defunct.  Pontiac was somewhat similar for General Motors, and is also gone.

From 1895 to 1924, there were 112 new firms in the automotive industry in Detroit and 48% of them were spin-offs.  As noted, many firms were acquired so the actual number of spin-offs was 142 which exceeds the estimate for semiconductor spin-offs (91).  Olds and Buick each had seven spin-offs.  Cadillac, Ford and Maxwell-Briscoe had four each.

I will assume you are familiar with the semiconductor genealogy; from vacuum tubes to Bell Labs and the transistor; from early transistor companies like Transitron; and Shockley and Fairchild and all the Fairchildren in Silicon Valley.  So you recognize that the tube companies didn't make the jump to transistors.  And the transistor companies didn't make the jump to integrated circuits - just like the carriage and bicycle companies didn't make the jump to automobiles; and the steamers and electric car companies didn't make the jump to gasoline-powered cars.

There is another parallel with the types of cars and with management style.  Many of the early car companies made big luxury cars and failed to see the market for smaller, affordable cars and so people left to pursue those markets.  I view this as similar to what many semiconductor spin-offs did, for example, leaving a digitally-focused company to make analog circuits.  And a lot of the defections were basically disagreements with management or stockholders about how to run the company.  Like Fairchild and Intersil disputes about stock options.

Both Fairchild and Olds were first to jump on the new technology.  Both were full of very talented engineers yet had ineffective management.  Their success was enough encouragement for people to venture out on their own.  And in the beginning, neither area had venture capitalists.  But while some talented people from Fairchild and Olds started companies, other talented people from Fairchild and Olds used their new-found wealth to help finance those start-ups.  The study uses the term agglomeration to extend to all of the support companies necessary for the industry and the abundance of experienced labor. It is probably an effect, not a cause of the growth.  Other studies point to the perfect storm of Stanford University, venture capitalists, the cold war and Silicon Valley's flat hierarchical structures as the reason for its growth.  But Detroit lacked all these things yet seemed to spawn more spin-offs.

Of course, we have the benefit of hindsight to see how Detroit evolved.  Forty years after 1924, Detroit was peaking in world domination only to get derailed by the oil crisis a decade later - of which it's arguably never really recovered.  Forty years after 1986 is just around the corner for Silicon Valley.  To some extent, the semiconductor industry is not the only game in Silicon Valley anymore.  Regardless, it's still the epicenter of the semiconductor world.  Will it get derailed in the next few decades?  Are there lessons to be learned?

NOTE:
"Silicon Valley -- A Chip off the Old Detroit Bloc", Stephen Klepper, Carnegie Mellon University, January 2007