The death and rebirth of the manufacturing sector in Silicon Valley

Earlier this year, search engine giant Google paid over $1.6 billion to acquire the video sharing service YouTube. The 18 month-old startup had just over sixty employees, and made nothing of its own, other than a little software code; the value of the company rested in the vast audience that uploaded and shared videos. For many, the sale seemed to mark the return of the dot-com boom days, and the coming of age of "Web 2.0."

Once upon a time, though, Silicon Valley was famous because it made things. In fact, one of the best recent books about the Valley, Christophe Lecuyer's Making Silicon Valley: Innovation and the Growth of High Tech, 1930-1970, argues that the unique challenges of making electronics drove the creation of the Valley's distinct culture. The book starts with one vast insight about the nature of technology. This is it: manufacturing isn't boring. Figuring out how to produce thousands or millions of units of complicated, high-performance components requires as much ingenuity and creativity as inventing a new device in the first place, and sometimes even generates new innovations. In fact, Jean Hoerni invented the planar process for manufacturing semiconductors-- a process that is the Valley's equivalent of mass production, interchangeable parts, and sliced bread, all in one-- in response to military demands for ultra-high performance components. No military demands, no planar process, no Silicon Valley.

This attention to the factory floor leads Lecuyer to another discovery. Long before the place was famous for attracting engineers from around the Pacific, it was drawing strength and creating world-class technical skill by remixing technical and national cultures. In the 1920s, the radio scene was a mashup of professional radio engineers, amateur radio enthusiasts, and naval intelligence officers; this is one reason San Francisco-- far from either the procurement wizards in the Naval Shipyard in Washington, or the East Coast electronics factories-- had a world-class radio tube industry in the 1930s.

This is a timely book, because manufacturing isn't completely gone from Silicon Valley; in fact, it might be coming back. Nanosolar, one of a slew of new Silicon Valley companies that works on alternative energy, just announced plans to build its new factory not in China or India, but in San Jose. As one venture capitalist put it, the photovoltaic solar cell company is "trying to move the photovoltaics industry from the economics of the semiconductor business to the economics of the printing business"-- precisely the kind of move that requires manufacturing genius of the sort Lecuyer describes. Who was one of Nanosolar's early investors? Google.

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