Silicon Valley's `Capital City'

0 Comments | Insight on the News, March 15, 1999 | by Gayle M.B. Hanson

"Silicon Valley in itself has become an ecosystem" says Furst. "All of the infrastructure for the creation of high technology is right here. It also is a place where the risk-taking dynamic is deeply rooted. What is happening now is that we have a lot of companies that feel strongly that they need to be here in their start-up phase. As they grow larger and get into manufacturing they move out into other parts of the Valley, but there is a definite sense that people want to be where the investors are."

If SRI represents the techno-economic arm of Stanford, it is the enduring myth of the garage-based techno-whizzes that infuses the air with entrepreneurial possibility. If that notion was solidified during the 1970s when a couple of guys named Steve Jobs and Steve Wozniak started tinkering around with the idea of a personal computer, it had its inception in the 1930s when a couple of electrical engineers who graduated from Stanford started tinkering around in a Palo Alto garage.

"Dave Packard and Bill Hewlett have been called the DNA of Silicon Valley" says Karen Lewis, the former Harvard archivist who now works for computer giant Hewlett-Packard. "There is no question but they were sitting on the nose of the rocket when it took off."

The two engineers formed their partnership in 1939, and today Hewlett-Packard remains a world leader in technological innovation. In the early years, says Lewis, there was a real sense that folks in Palo Alto were doing things a little bit differently than their counterparts back East. "There were no traditions pulling them down," says Lewis. "There was this exciting environment in which people were talking about technology all the time. It is like the way the Chinese have just jumped in and adopted cellular technology. I'm a Yankee; I was born in New England and raised there. I was at Harvard University. At Harvard you have lunch at the faculty club; here you eat in the cafeteria."

You may be eating in the cafeteria, but chances are that you're going to get a choice between sushi, homemade pizza and a vegetarian stir-fry. If the techie stereotype is of an unwashed guy washing down cheese doodles with gallons of Mountain Dew, the reality is that when ultrachic Bloomingdales went looking to establish a retail beachhead in California, they placed their flagship store in Palo Alto. A walk down Palo Alto's main retail drag reveals a mixture of longtime tenants bumping up against the new and the hip.

With its top-ranked public-school system, extensive public library facilities and 30 miles of bike trails, it's little wonder that the young and stock-optioned are elbowing each other in the ribs for the opportunity to pay a minimum of $500,000 in cash to move into a two-bedroom, 1,600 square-foot bungalow. And the prices just keep going up, creating a community that increasingly is in danger of losing its middle class.

"There is no question but that we are becoming a victim of our own success" says Palo Alto Mayor Gary Fazzino. "When I moved here at the age of 13 there was a real middle class. To a large extent we are losing that. On one hand it is exciting to be living next door to the superstars of high tech; on the other hand is the concern that there are fewer real people living here. People who've been here for a long time really lament the loss of diversity."