The document chronicles the history and evolution of Silicon Valley, highlighting key milestones from the early days of radio engineering during World War I to the rise of semiconductor and computer industries. It emphasizes the role of innovation, community, and grassroots movements in the development of technology, particularly in personal computing and the Internet. The growth of companies like Apple and Intel, along with the impact of venture capital and government investments, is also detailed throughout the timeline.

1. The Greatest Creation of Wealth in the History of the World piero scaruffi p@scaruffi.com scaruffi@stanford.edu
Beijing, China
September 2014

2. Sections
1.History of Silicon Valley
2. Trends
3. The Best Kept Secret in Silicon Valley
2

3. 1. History of Silicon Valley
3

4. World War I
•The Navy and amateurs turn the Bay Area into a hotbed of radio engineering
4

5. Meanwhile elsewhere…
•The automated office:
–typewriters (a field dominated by Remington Rand),
–adding machines (a field dominated by Burroughs),
–tabulating machines (a field dominated by IBM)
–cash registers (a field dominated by NCR)
•Midwest and East Coast industries dominate office automation
5

6. World War II and Cold War
•Fred Terman in charge of electronic warfare
•Fred Terman's students at Stanford: HP, Varian,…
•Stanford Industrial Park (1951)
•Main industry in Silicon Valley: Defense
6

7. Meanwhile (computers)
•Main centers for research on electronic computing:
–Boston (Harvard and MIT),
–Philadelphia (Moore School of Electrical Engineering, BRL),
–New Jersey (Bell Labs, Princeton, RCA Labs),
–New York (Columbia and IBM)
•First commercial computers: large office- automation players (Remington Rand, IBM, NCR, Burroughs)
•AT&T Bell Labs’ transistor (1949)
7

8. 8
Silicon Valley in 1950

9. Semiconductors in the Bay Area
•Shockley Semiconductor Lab (1956)
•Fairchild Semiconductors (1957), the first venture-funded "start-up" company of the Bay Area: Robert Noyce, Gordon Moore, Jean Hoerni, etc
•Fairchild moves from germanium to silicon
•The semiconductor industry does not require huge capital investment
9

10. Integrated Circuits
•1958: Jack Kilby at Texas Instruments invents the integrated circuit
•Exponential growth in chip density
•Gordon Moore’s law (1965): the processing power of computers will double every 12 (18) months
10

11. Integrated Circuits
11
dsprelated.com/blogimages/RickLyons

12. Integrated Circuits
•A self-sustaining manufacturing community that mixes Darwinian competition/selection with symbiotic cooperation
•The system exhibits a form of collective learning
•Note: Texas Instruments in Texas, Motorola in Arizona and RCA/GE on the East Coast do not spawn a similar genealogical tree of semiconductor startups
12

13. Integrated Circuits
•Role of the government
–The military serves as both a munificent investor that did not expect a return (and not even co-ownership) and as an inexpensive testbed
–NASA's Apollo mission to send a man to the Moon builds the Apollo Guidance Computer (1961-64), the first computer to use integrated circuits
13

14. Dynamic Memory
•Advanced Memory Systems (1968), Intel (1968) and Four Phase (1969): semiconductor computer memories instead of magnetic core memories
•Before the DRAM: the semiconductor firms make money by building custom-designed integrated circuits (small market but lucrative)
•The DRAM: a commodity sold in large numbers at a low price
•Constant downward pressure on prices
14

15. High-tech Creativity
•SRI
–Doug Engelbart’s NLS (1968): a graphical user interface and a hypertext system running on the first computer equipped with a mouse and connected to a remote computer (9 Dec 1968)
–An implementation of Vannevar Bush's article "As We May Think“ (1945)
–Engelbart’s research program: “Augmenting Human Intellect” (not Artificial Intelligence, but augmented intelligence)
–"Shakey the Robot“ (1969)
15

16. High-tech Creativity
•Xerox PARC (1970) :
–Alan Kay’s Dynabook and Smalltalk
–Ivan Sutherland (University of Utah College of Engineering + Seymour Papert (MIT A.I. Lab)
–Not faster computation but better interaction
–Casual, informal and egalitarian workplace
16

17. High-tech Creativity
•Computer games
–Nolan Bushnell’s "Computer Space“ (1971), the world's first coin-operated videogame (a free-standing terminal powered by a computer)
–Atari’s “Pong“ (1972)
17

18. Meanwhile elsewhere…
•Arpanet (1969): Utah, UCLA, SRI, UCSB but run by BBN (Boston)
•Unix (1971) – from Bell Labs (New Jersey)
•“The Unbundling” by IBM (1969) creates the software industry
•Minicomputers (Digital Equipment, 1968) - Boston
•Largest computer companies in the USA: IBM + BUNCH (Burroughs, UNIVAC, NCR, CDC, & Honeywell) – none of them in California
18

19. The Microprocessor
•Four Phase Systems’ AL1 (1970)
•Intel’s 4404 (1971), as powerful as the ENIAC, but millions of times smaller and ten thousand times cheaper
•Bill Pentz at California State University in Sacramento proves that a microprocessor can be used to build a computer (1972)
19

20. The Home Computer
•"Radio Electronics", "QST" and "Popular Electronics" publicize the microprocessor among hobbyists
•Kits by mail-order for hobbyists to build machines at home: Scelbi (1974), …, Altair 8800 (1974)
•The microprocessor reaches a wider audience than its inventors intended to reach thanks to the magazines
•The most creative and visionary users are not working in corporations but at home
•The Homebrew Computer Club (1975)
20

21. The Home Computer
•IBM, the "BUNCH“ and DEC had the know-how, the brains and the factories to produce desktop computers for the home market. They did not do it.
•The market for home computers is largely created by a grassroots movement of hobbyists who work outside the big bureaucracies of corporations, academia and government.
•They create their own community (via magazines, stores and clubs)
•Journalists and store owners are the real visionaries
21

22. The Home Computer
•Obstacle to widespread diffusion: the home computer is expensive (because the Intel microprocessor is expensive) and pretty useless (because it has no software)
22

23. Software: Databases
•Leadership in database technology: IBM’s IMS
•IBM's Almaden Research Center starts the “relational” database management system System R (1973)
•Berkeley’s Ingres (1973)
23

24. The GUI
•Leadership in user interface: IBM’s form-driven 3270 terminal to connect to mainframes
•Xerox PARC unveils the Alto, the first workstation with a mouse and a Graphical User Interface (1973)
24

25. The Apple Vision
•Apple I vision (1976):
–A computer without a programming language is an oxymoron
–A real programming language requires DRAM
–Enabling technology: the 4K DRAM, just introduced in 1974, much cheaper than the static RAM of the Altair
–Roberts had basically just dressed up a microprocessor to create his Altair. Wozniak dresses up a memory chip to create the Apple I
–Wozniak also writes the BASIC interpreter
–Target user: the hobbyist
25

26. The Apple Vision
•Apple II vision (1977):
–Fully assembled, with a monitor and a keyboard, requiring almost no technical expertise
–The look and feel of a home appliance
–The first affordable floppy-disk drive for personal computers, which replaces the cassette as the main data storage
26

27. A New Office Tool
•VisiCalc (1979), the first spreadsheet program for personal computers for the Apple II
•Apple’s IPO (1980) raises a record $1.3 billion
•Visicalc ported to the Tandy TRS-80, Commodore PET and the Atari 800, the first major application that is not tied to a computer
•Lesson learned: the value of software
•Venture capitalists move to Menlo Park
27

28. A New Office Tool
28
http://arstechnica.com

29. The Microprocessor Wars/ II
•Intel assigns the task of designing the 8086 (1978) to a software engineer
•14 million microprocessors are sold in 1978 but only 200,000 personal computers are manufactured
29

30. Communications
•3Com (1979): Ethernet for personal computers
•Ungermann-Bass (1979): Ethernet-based local-area networks
30

31. The GUI/II
•Exodus of brains from Xerox PARC towards Silicon Valley companies (1977)
•Xerox 8010 Star Information System (1981) that integrates a mouse, a GUI, a laser printer, an Ethernet card, an object- oriented environment (Smalltalk) and word- processing and publishing software
31

32. BSD
•Berkeley Software Distribution (1977) spreads in universities
•The world's most portable operating system
•Onyx (1980), Apollo (1980), SUN (1981), Silicon Graphics (1982): a microcomputer running UNIX, a cheaper alternative to the PDP-11
•DARPA chooses Unix for the Arpanet (1980)
32

33. BSD
•A technology ignored by the big computer manufacturers and left in the hands of a community of eccentric independents
•Dynamics that mirrors the dynamics of the computer hobbyists who have invented the personal computer
•Universities serve as community aggregators more than magazines, clubs or stores
33

34. Biotech
•Genentech (1976) to genetically engineer new pharmaceutical drugs
•Applied Biosystems (1979) to build biotech instrumentation (protein sequencer, DNA synthesizer)
•The US Supreme Court rules that biological materials (as in "life forms") can be patented (1980)
•Calgene (1980), Chiron (1981), …
•Cetus’ IPO (1981) raises a record $108 million
34

35. Meanwhile elsewhere…
•The IBM PC (1981), a personal computer from off-the-shelf, widely available components based on the Intel 8088 microprocessor and running an operating system by Microsoft (derived from Unix)
•The “open” model of the PC creates an industry of "clones" (Compaq, Olivetti) and an industry of independent software companies
35

36. Meanwhile elsewhere…
•Commodore 64 (1982) is sold in retail stores instead of electronics stores
•Osborne 1 (1981), a portable computer
36
http://arstechnica.com

37. The Apple Vision
•Apple Lisa (1983), the first personal computer with the GUI pioneered by the Xerox Alto
•Apple’s added value: it looks cool
•Apple’s model: a proprietary Apple operating system
37

38. Software
•Sales of personal computers skyrocket because they have become useful: Apple thanks to office programs (Visicalc, Context MBA) and the PC thanks to the DOS-compatible applications (Lotus 1-2-3, dBase ($700)
38

39. Software
•Activision (1979), Electronic Arts (1982): computer games
•Autodesk (1981): CAD
•Adobe (1982): desktop publishing
•Symantec (1982), Borland (1983): tools for software developers
39

40. Software
•1950s-1970s: the hardware represents most of the cost of a computer
•1980s: the falling prices of hardware components enables ever more sophisticated software applications and triggers a growing demand for them; and the need to run more sophisticated applications motivates the hardware industry to produce more powerful chips
40

41. The Internet
•Just like the personal computer and the Unix, the Internet too is largely shaped by a community of eccentric independents
•Decentralized model that involves the very users of the Internet to submit proposals for future directions
•A government-mandated grass-roots movement
•The consumer is the producer
•E-mail itself is a user invention, never planned by the Arpanet's bureaucracy
41

42. The Internet
•The Arpanet as a project in progress, a concept that is more likely to be accepted in military projects than in commercial product development
•The Arpanet changes mission over time, transforming from a military project to survive a nuclear attack into a system for interpersonal communication and knowledge sharing
42

43. The Semiconductor Wars
•Japanese firms introduce low-cost 256K DRAM chips (1984) and gain 70% of the market (1985)
43

44. Outsourcing the Fab
•1985: The government of Taiwan hires Morris Chang who promotes the outsourcing of semiconductor manufacturing by US companies to Taiwan
•Whenever a Silicon Valley manufacturer outsources a project to a Taiwanese fab, it directly improves the Taiwanese plant both by injecting capital and by the project's new requirements and therefore does a favor to its own competitors who can use the same factory
44

45. The PC goes corporate
45
http://arstechnica.com

46. The Peacetime Dividend
•End of the Cold War (1991): Silicon Valley does not depend anymore on the military industry
•The main change: need to generate a profit as quickly as possible (the great investor of the 1950s and 1960s, the military, thought long-term, with no interest in return on investment)
46

47. Meanwhile elsewhere…
•1991: Tim Berners-Lee invents the World-wide Web
•1993: Mosaic (later renamed Netscape in Silicon Valley)
•1994: WebCrawler (search engine)
•1995: The US government blesses the commercial use of the Internet
47

48. The Dot Coms
•The importance of Netscape’s browser:
–Free for ordinary users
–Illiterate computer uses can browse the Web the same way that a pro does
–The non-intuitive cluster of digital information that has accrued on the Internet becomes intelligible to ordinary people
–More and more people are motivated to add content to the Web
48

49. The Dot Coms
•The importance of Netscape’s browser:
–The personal computer boom of the 1980s has placed a computer in millions of households and the browser turns them into the audience of the Web
–The computer monopolies are forced to adopt open standards for the Web
49

50. The Dot Coms
•Netscape IPO (1995)
•Yahoo (1995)
•Excite. AltaVista (1995), Hotbot (1996), Google (1998)
•Java (1995)
•WebLogic (1995), Apache (1996)
•Craigslist (1995)
•HotMail (1996)
•GeoCities (1995)
•eBay (1995)
•Netflix (1997)
50

51. Cloud Computing
•1990: General Magic
•1996: Oracle's Net Computer
•1999: Salesforce
•2006: Amazon's Simple Storage Service
•2007: Google Docs
51

52. Hotmail’s Lesson
•Founded by hardware engineers: a user’s idea, not a technological idea; a sturdy no-nonsense "product“
•Advertising as a source of revenues
•Internet startups offer free services because their real product is the user base
•The boom of the Web is not a consequence of the Internet but of the boom in advertising: cable television revenues stage an 82% growth rate in 1994-95 just when the Web is maturing
52

53. Meanwhile elsewhere…
•East Coast: Human Genome Project (1992)
•Finland: Nokia introduces the smart phone (1996)
53

54. The Nasdaq Crash
•Between 1998 and 1999 venture-capital investments in Silicon Valley firms increases more than 90%
•The Internet and Y2K booms generate a bubble that bursts in 2000
54

55. The Nasdaq Crash
•Venture capital investment never went back to the 2000 high
55

56. The Nasdaq Crash
•Silicon Valley before the crash:
–Personal computers: HP and Apple dwarfed by IBM, Compaq, Dell and Japanese
–Videogame consoles: Japan rules
–Semiconductors: The Far East rules
–Mobile phones: Europe rules
–Chips for mobile devices: ARM rules
–Software: Microsoft and SAP dwarf Oracle
–Dotcoms: No profits
56

57. Beyond the Crash
•Paypal (2000)
•Apple iPod and iTunes (2001)
•Wikipedia (2003)
•Facebook (2004)
•YouTube (2005)
•Twitter (2006)
•iPhone and Androir (2007)
57

58. Beyond the Crash
•Facebook (2004)
58

59. Beyond the Crash
•Yahoo and Google de-facto turn the Web into an advertising tool which incidentally also contains information
59

60. The Age of Uploading
•Wikipedia
•Blogs
•P2P tools
•Social networking sites
•YouTube
•Flickr
•Digital cameras and camcorders
•Smartphones
60

61. The Gift Economy
•The audience “gifts” content to the companies that make money out of it
•The companies are small but handle a huge amount of content
•The companies make money as advertising platforms
•The audience receives a free service but also provides a free service
61

62. The Demise of the Computer
•The smartphone (a computer that also does voice)
•Cloud computing (an invisible, omnipotent, virtual computer)
•Applications are written for social networks (Facebook apps) and smartphones (iPhone apps), not for an operating system
62

63. The Great Internet Wars
•Google vs Microsoft: Microsoft owns the operating system but Google owns the search engine (Internet traffic)
•Google vs Facebook: vying to become the premier advertising platform
•Apple vs Google: proprietary or open smartphones
63

64. Diversifying
•Tesla
64

65. Diversifying
•Apple iPhone (2007) and Google Android (2007)
65

66. Diversifying
•Biotech
66

67. The 2010s
67

68. The 2010s
68

69. The 2010s
69

70. Silicon Valley 2014
•World's #1 company in…
–Internet services: Google
–Social Media: Facebook
–Semiconductors: Intel
–Personal computers: Hewlett-Packard
–Business software: Oracle
Most valued company in the world: Apple
Location with the most venture capital: 3000 Sand Hill Rd, Menlo Park
70

71. 71
GDP ($million):
1 USA 16,800,000
2 China 9,240,270
3 Japan 4,901,530
4 Germany 3,634,823
5 France 2,734,949
6 Britain 2,522,261
7 Brazil 2,245,673
8 Russia 2,096,777
9 Italy 2,071,307
10 India 1,876,797
11 Canada 1,825,096
12 Australia 1,560,597
13 Spain 1,358,263
14 South Korea 1,304,554
15 Mexico 1,260,915
16 Indonesia 868,346
17 Turkey 820,207
18 Netherlands 800,173
19 Saudi Arabia 745,273
20 Switzerland 650,782
21 Argentina 611,755
San Francisco Bay Area ~600,000 (8 million people)
GDP per capita ($): 1 Qatar 98,814 2 Luxembourg 78,670 San Francisco Bay Area 74,815 3 Singapore 64,584 4 Norway 54,947 5 Brunei 53,431 6 United States 53,101 (World Bank, 2013)
Nobel Prizes (2013)
1.USA 349
2.Britain 116
3.Germany 101
4.France 66 San Francisco Bay Area 42
•Sweden 30
•Russia 27
•Switzerland 26
•Canada 23
•Austria 22
•Italy 20
•Japan 19

72. Today
72
1950

73. Lessons
1. Industrial park around university (Terman's model)
2. Ecosystem of small competitors instead of dominating giant (Fairchild model)
3. Government funding for advanced technology (DARPA, NASA)
4. People buy the application, not the technology (the VisiCalc lesson)
5. Big monolithic corporate research is slower to realize the potentiality of a new technology than a distributed system of independent eccentric hobbyists (personal computers, dot coms)
73

74. Lessons
6. Augmented intelligence, not just automation (SRI, Xerox PARC)
7. Inventions can come from anywhere, disruptive innocation comes from disruptive societies
8. Corporate and government platforms are opportunities for new applications (Internet, Unix)
9. The business model for a new technology is never obvious (the Hotmail lesson)
10. Technology does not exist in a vacuum
74

75. Trends…
•… the next SMALL thing!
75

76. Social Media
•Facebook (1 billion users!) and Twitter: age of social entertainment (and political activism!)
•The next step: streaming your life live to the world (Twitch.tv)
76

77. Social Media
•A different use of social media: investment and services
–Crowdsourcing
–Sharing economy (collaborative consumption
77
Citylab.com

78. Sharing Economy
•Collaborative consumption
•A side-effect of the financial crisis
•Enabled by social mobility, by Amazon/Yelp customer reviews (“trust”), and by… a wasteful society (idling capacity)!
78
Citylab.com

79. Sharing Economy
•Technology is changing the future of capitalism from competing to sharing
•“By the end of this decade, power and influence will shift largely to those people with the best reputations and trust networks, from people with money and nominal power… giving a voice to what we once called "the silent majority."
79
Craig Newmark

80. Sharing Economy
80

81. Sharing Economy
81
jwtintelligence.com

82. Mobile Computing
•Mobile payment
82

83. Mobile Computing
83

84. Big Data
•Very soon Homo Sapiens will be producing more data every year than in the previous 200,000 years
•Artificial Intelligence
•Automated knowledge management
•But also…
84

85. 85

86. Hessian matrix from a quadratic programming problem
86

87. Frequency-domain circuit simulation
87

88. Linear programming problem
88

89. Computational fluid dynamics: shallow-water equations
89

90. Linear programming problem
90

91. Social network: people and the web pages they like
91

92. Big Data
•What those pictures are: solving a large system of linear equations with a large number (millions) of unknowns
Images by Margot Gerritsen (Stanford Univ), Tim Davis & Yifan Hu http://www.cise.ufl.edu/research/sparse/matrices/
92

93. Cloud Computing
•Personal digital life synchronized through devices
•Offering anything as a service
93

94. Cryptography
•Post-quantum cryptography
•Bitcoin blockchain
•Zero-knowledge proofs
•Indistinguishability obfuscation
•Secure multi-party computation
94

95. Education
•Massive Open Online Courses (MOOCs)
•The largest university in the world is Coursera with 5 million students
•There are thousands of MOOCs and they will adapt and evolve faster than traditional universities
•2014: 81% of students in thge USA take at least one online course
•Talent identification and recruiting
95

96. Health Care
•In the USA 18% of GDP is $1 trillion, of which 70% is to cure the ill and 30% is diagnostics
•Expected to grow to 50% in 5 years thanks to sensors and nanotech, to keep people out of hospitals
96

97. Health Care
•Life expectancy is increasing: every year by 3 months
•Neurodegenerative diseases increase accordingly
•This means fewer doctors and more diagnostic centers (and their staff)
97

98. Health Care
•The most dramatic and rapid gains have occurred in East Asia, where life expectancy at birth increased from less than 45 years in 1950 to more than 74 years today.
•Percentage Change in the World’s Population by Age: 2010-2050 (UN estimates of 2010):
98

99. Wearable Computing
•Health monitoring
•Integration with medical records and social media
99

100. Fashion
100

101. Industry 4.0
•Innovation driven by scale:
–Until 1989 the scale was the millimeter
–In 2014 the scale is the nanoscale, heading towsars quantum and biological scales.
–Biology and not the machine is the new reference model (eg, build batteries with viruses).
101

102. Industry 4.0
•Lower technological barriers to entry
–a distributed system of innovation: the innovation system expands to highschool kids
–rapid diffusion of tools and know-how through open source
–rapid prototyping
102

103. Industry 4.0
•3D printing (2014: New Matter)
–will reduce transport costs just like Amazon killed the bookstore
–but uses more energy
–print at home might be too expensive: where to print?
103

104. Industry 4.0
•Amazon:
–2010s: Amazon’s colossal PHX6 fulfilment center at Phoenix (Arizona) is transformed into an automated, robot-intensive facility
–The whole supply chain is made available to other merchants as well
–Rapidly moving online business towards same- day delivery and mobile shopping.
104

105. Industry 4.0
•Crowdfunding
–$3-5 billion
105

106. Industry 4.0
•What is changing:
–actors
–process
–investors
106

107. Hardware
•Quantum Computing?
107

108. Sensor revolution
•Thanks to progress in micro-electronics, batteries and wireless connectivity, sensors have become orders of magnitude cheaper
•The “cloud” enables them to communicate
108

109. Sensor revolution
•Networked sensors open virtually infinite horizons to a new generation of applications.
–Wearable computing
–Self-driving cars
–Embedded nanotechnology
–Robots
–Cashier-less payment
109

110. Internet of Things
•Communication standards
–AllJoyn (Qualcomm): objects can broadcast what they can do to all other objects nearby (WiFi or Bluetooth)
•Eg a television can announce that it can display notifications
–Industrial Internet Consortium (AT&T, Cisco, IBM, GE, Intel)
–Open InterConnect Consortium (Broadcom, Samsung, Dell)
110

111. Networked Cars
•2014: 8% of cars have some kind of networking capability
•April 2014: all new BMW models will embed a SIM card
•2020: 90% of new cars will have a SIM card
•Apps for the networked car:
–Search for parking space
–Communicate road hazards and accidents
–Exchange information about traffic
–Monitor driver’s behavior (eg, your son)
–Ride-sharing
111

112. Nanotech
•Nanomedicine
•Nanobots
112

113. Biotech
•Moore's law vs Cost per genome
113

114. Biotech
114

115. iGEM Revolution
•“Open source” biotech
•iGEM = International Genetically Engineered Machine
•Thousands of student bioengineers from all over the world create new life forms and race them every year at the iGEM Jamboree in Boston (since 2004)
•2,500 competitors from 32 countries (2014), including high-school teams
•Global grassroots synthetic-biology revolution
•Repository of 2,000 genetic components called BioBricks.
•They create mostly microbes (e.g., organisms detecting and eliminating water pollutants)
•Drew Endy (Stanford) : cofounder of iGEM and co- founder of the BioBricks Foundation
115

116. Biohacking
•“Biology is technology” (Rob Carlson)
•A community of worldwide hobbyists
•Public domain database of genetic parts
•20,000 biological parts
•Registry of Standard Biological Parts - MIT
–parts.mit.edu
–parts.igem.org
116

117. Biohacking
•Biocurious (Sunnyvale)
- -20C Freezer
– PCR Machines
– qPCR
– Balance
– Autoclave
– Micropipettes, single and multi-channel
– Fluorescent Microscope
– Microcentrifuges
– Protein Purification System
– Vortexers
– Ultrasonic Bath
– CO2 Incubator
117

118. Biohacking
•OpenPCR (Polymerase Chain Reaction)
•PCR printers (identify a piece of DNA and make copies of it)
•Cambrian Genomics: a 3D printer for living beings
118

119. Biohacking
•Autodesk’s Project Cyborg: design tools for biohackers (quote: “Project Cyborg is a cloud- based meta-platform of design tools for programming matter across domains and scales”)
119

120. Artificial Intelligence
•Amazon (Kiva, 2012), Google (Industrial Robotics, Meka, Holomni, Bot & Dolly, DNNresearch, Schaft, Bost, DeepMind, 2013-14), IBM (Watson project), Microsoft (Project Adam, 2014), Apple (Siri, 2011), Facebook (DeepFace, 2013), Yahoo (LookFlow, 2013), Baidu, Foxconn, and others have made multi-billion dollar investments in artificial intelligence and robotics in the 2010s
120

121. Artificial Intelligence
•McKensey on A.I.
121

122. Artificial Intelligence
•Machine Learning
•Domestic robot
•Image recognition
•Voice recognition
122

123. Artificial Intelligence
•Today’s robot: you
123

124. Artificial Intelligence
•Robot of the future: thousands of eyes and arms geographically distributed
124

125. Artificial Intelligence
•Programming:
–Sequential programming (deterministic)
–Nonsequential (AI, deterministic)
–Probabilistic (Baysian, nondeterministic)
–Probabilistic and distributed
125

126. Artificial Intelligence
•The 20-minute answer to a search (Peter Norvig at Google)
126

127. Artificial Intelligence
•Memorable pictures
Following slides are from MIT’s AI Lab
127

128. Artificial Intelligence
•Memorable pictures
128

129. Artificial Intelligence
•Memorable pictures
129

130. Artificial Intelligence
•Memorable pictures
130

131. Artificial Intelligence
•Memorable pictures
131

132. Super-intelligence
•The Singularity?
•2014: Deep Knowledge Ventures (Hong Kong) appoints an algorithm to its board of directors.
132

133. Management Science
•Transitioning into a new era:
–Hierarchical -> Network
–Proprietary -> Open
–Market Economy -> Gift Economy And Sharing Economy
133

134. Management Science
•"Design for loss of control" (JP Rangaswami)
•Turn an organization into a social enterprise
134

135. Management Science
•How to prepare the next generation of leaders to deal with extremely complex and rapidly mutating systems
•Grand challenges require interdisciplinary thinking
135

136. Stanford Entrepreneurship
136

137. Entrepreneurship Organizations
•Association of Industry-Minded Stanford Professionals – postdoc networking to link entrepreneurship and industry
•Business Association of Stanford Entrepreneurial Students – business plan competitions, E-Challenge and Social E-Challenge
•Center for Entrepreneurial Studies at the Graduate School of Business – personalized counseling and mentorship
•Innovation Farm Teams – students and faculty/industry/OTL teams
•SPARK – School of Medicine and volunteers from biotech, pharma and healthcare; seed funding to bridge basic science and pre-clinical
•Stanford Angels & Entrepreneurs – foster relationships between potential investors and entrepreneurs
•Stanford Biodesign – needs finding and invention of biomedical tech
•Stanford Entrepreneurship Network – federation of organizations
•Stanford Technology Ventures Program – accelerate high-technology entrepreneurship education and research on technology-based firms
137

138. Entrepreneurship Courses
•School of Engineering – over 30 courses within the Stanford Technology Ventures Program
•Graduate School of Business – 20 courses related to entrepreneurship
•Entrepreneurial Design for Extreme Affordability – jointly offered by Graduate School of Business and School of Engineering
•Lean Launchpad – hands-on learning on what it’s like to start a high tech company
138

139. Stanford University
•Interdisciplinary education promoted at the various schools at Stanford’s engineering, business, medicine, science, design
•Students from diverse majors encouraged to come together to solve real or abstract problems
•The goal is to have them become what are called “T-shaped” students, who have depth in a particular field of study but also breadth across multiple disciplines.
•Eg, Institute of Design, or the d.school, housed in the school of engineering
139

140. Stanford University
•Stanford forms T-shaped people
140

141. Stanford University
•Faculty invest in start-ups launched by their students or colleagues.
•There are probably more faculty millionaires at Stanford than at any other university in the world.
•2005: the stock grants that Stanford had received in exchange for licensing Google’s technology were sold for 360 million dollars.
•The real value for a student is the networking
141

142. Art/Science/Tech Interaction
142

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Art/Science in the Bay Area
•Leonardo ISAST leonardo.info (Frank Malina, 1967)
•YLEM (Trudy Reagan & Howard Pearlmutter, 1981)
•UC Berkeley's Art, Technology, and Culture Colloquium (Ken Goldberg, 1997)
•Zero1 zero1.org (Andy Cunningham, 2000)
•LASERs lasertalks.com (Piero Scaruffi, 2008)
•UC Santa Cruz's OpenLab (Jenifer Parker and Enrico Rameriz-Ruiz, 2010)
•Codame codame.com (Bruno Fonzi, 2010)
•BAASICS baasics.com (Selene Foster and Christopher Reiger, 2011)
•UC Santa Cruz's Art/Sci Institute (John Weber, 2013)
•Life Art Science Technology (LAST) festival lastfestival.com (Piero Scaruffi, 2014)
•Djerassi's Scientific Delirium Madness (Margot Knight, 2014)

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www.nasonline.org
events.stanford.edu
www.lasertalks.com
Since January 2008
usfcalendar.usfca.edu
http://dma.ucla.edu
www.unex.berkeley.edu
arts.ucsc.edu/
artsciencefusion.ucdavis.edu/
londonlaser.net

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•San Francisco: since Jan 2008 (SFSU, then USF)
•Silicon Valley: Feb 2009 (SETI Inst, then Stanford)
•Washington: Mar 2011 (National Academy of Science)
•New York: Sep 2011
•UCLA: Jan 2013
•Berkeley: Jun 2013
•Santa Cruz: October 2013
•Davis: October 2013
•London: February 2014
•Texas: 2014
•Kansas: 2015
•Toronto: 2015

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www.lasertalks.com

147. 147
LAST Festival Life Art Science Technology festival June 2014: Silicon Valley - October 2014: San Francisco
www.lastfestival.com

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The Best Kept Secret in Silicon Valley
•Why did it happen there???

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Why did it happen here?
•The technology, the money and the brains were on the East Coast and in Europe (the great electronic research labs, the great mathematicians, Wall Street, etc)
•The great universities were on the East Coast (MIT, Harvard, Moore School, Princeton, Columbia), and in Europe (Cambridge)
•Bell Labs, RCA Labs, IBM Labs
•Britain and Germany won most of the Nobels
•Transistor, computer, etc all invented elsewhere

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Silicon Valley in 1950

151. 151
Silicon Valley in 1950
(2007)
31
$4.4
$1.3
(2013)

152. 152
Why did it happen here?
•The official history of Silicon Valley
–Defense/DARPA
–Fred Terman at Stanford and Stanford Industrial Park
–William Shockley’s lab
–Fairchild/Intel/semiconductors
–Xerox PARC, SRI Intl/computer-human interface
–Apple, personal computing, videogames
–Unix, Internet, Relational databases
–The dotcoms
–Google, Facebook, …

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Why Silicon Valley?
•Until the 1950s the Bay Area was mainly famous for
–Eccentric artists/writers
•Student protests of 1964
•Hippies
•Black Panther Party (1966)
•Monterey’s rock festival (1967)
•"Whole Earth Catalog“ (1968)
•The first “Earth Day” (1970)
•Gay Pride Parade (1970)
•Survival Research Labs (1978)
•New-age movement (1980s)
•Burning Man (1986)

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Why Silicon Valley?
The first major wave of immigration of young educated people from all over the world took place during the hippy era (“Summer of Love”)
The first major wave of technology was driven by independents, amateurs and hobbyists (From ham radio to the Homebrew Computer Club)

155. 155
Why Silicon Valley?
•Anti-corporate sentiment
•The start-ups implement principles of the hippy commune
•SRI Intl and Xerox PARC: computation for the masses, augmented intelligence
Xerox PARC
The first mouse

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Why Silicon Valley?
•The Bay Area recasts both Unix and the Internet as idealistic grass-roots movements
•Young educated people wanted to change the world
•They did

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Why Silicon Valley?
•Dysfunctional synergy between two opposite poles
–The rational and the irrational
–Technologists and anti-technologists
–Hippies and engineers
–Amateurs and corporations
–Nerds and outlaws (the "traitors", Jobs, Ellison, Zuckerberg, hackers)

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Why Silicon Valley?
•Innovation is a vague word: everything is an "innovation". What kind of innovation does Silicon Valley specialize in?

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Why Silicon Valley?
•What Silicon Valley does best
–Not invented here: computer, transistor, integrated circuit, robots, Artificial Intelligence, programming languages, databases, videogames, Internet, personal computers, World-wide web, search engines, social media, smartphones, wearable computing, space exploration, electrical cars, driverless cars…

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Why Silicon Valley?
•What Silicon Valley does best
–Invented here: disrupting products

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Silicon Valley 2014
•World's #1 company in…
–Internet services: Google
–Social Media: Facebook
–Semiconductors: Intel
–Personal computers: Hewlett-Packard
–Business software: Oracle
Most valued company in the world: Apple
Location with the most venture capital: 3000 Sand Hill Rd, Menlo Park

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Why Silicon Valley?
•Culture of failure: it comes from the artists (risk inherent in being an artist)
•Culture of success: it comes from the artists (congrats if you make a lot of money out of the crazy ideas you had)
•Meritocracy: it comes from the artists (industrial power is usually inherited)
•Casual work environment - just like an artist’s studio
•Silicon Valley is about the garage (like the artists)

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Why Silicon Valley?
•Crowdfunding, peer-to-peer file sharing, the gift economy and the sharing economy are NOT natural consequences of traditional industrial capitalistic society
•but they are a natural consequence of the artists' way of life

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Why Silicon Valley?
•Immigration of young educated people from all over the world (Note! USA gets brains, Silicon Valley gets YOUNG brains)
•Young people are less specialistic (narrow minded? parochial?) than older people
•Computer geeks and nerds are actually more likely to absorb the influence of artists (and even to become polymaths)

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Europe vs SV
•Europe: no trust in a young person starting a business
•SV: young people are the ones who found new music genres and become rock stars
•Europe: frightened by new technology
•SV: what kind of party can I throw with this new technology?
TechCrunch Disrupt September 2013
The first LAST festival June 2014

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Europe vs SV
•Europe: fear of “Big Brother”
•SV: please take my privacy and make me cool and famous (just like an artist)
Viviane Reding, EU’s justice commissioner
Steve Jobs
Sergey Brin
"It is better to be absolutely ridiculous than absolutely boring“ (Marilyn Monroe)

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Replicating Silicon Valley
The rest of the world consistently failed to create their own Silicon Valleys:
•Sophia Antipolis (France)
•Munich (Germany)
•Oulu (Finland)
•Skolkovo (Russia)
•Israel
•Hsinchu (Taiwan)
•Singapore
•Cyberjaya (Malaysia)
•Bangalore (India)
•Zhongguancun (China)

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Progress does not need SV
•One century ago, within a relatively short period of time, the world adopted:
–the car,
–the airplane,
–the telephone,
–the radio
–the record
–cinema
•while at the same time the visual arts went through
–Impressionism,
–Cubism
–Expressionism

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Progress does not need SV
•while at the same time science came up with
–Quantum Mechanics
–Relativity
•while at the same time the office was revolutionized by
–cash registers,
–adding machines,
–typewriters
•while at the same time the home was revolutionized by
–dishwasher,
–refrigerator,
–air conditioning

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Progress does not need SV
•while at the same time cities adopted high-rise buildings

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Progress does not need SV
•There were only 5 radio stations in 1921 but already 525 in 1923
•The USA produced 11,200 cars in 1903, but already 1.5 million in 1916
•By 1917 a whopping 40% of households had a telephone in the USA up from 5% in 1900.
•The Wright brothers flew the first plane in 1903: during World War I (1915-18) more than 200,000 planes were built

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… but it may need the arts…
•Accelerating progress happened simultaneously in the sciences and the arts
Monet
Stravinsky
Einstein
Gaudi
Edison

173. Piero Scaruffi
p@scaruffi.com
scaruffi@stanford.edu
www.scaruffi.com