Silicon Valley is known for both unicorns and blackswans. What political, social and economic ideas shape the culture of Silicon Valley today?

Silicon Valley” from above by Patrick Nouhailler is licensed under CC BY-SA 2.0

“The Entire History of Silicon Valley” by John Coogan. All right Retrieved from


As the world’s technological center of excellence, Silicon Valley is synonymous with innovation. Today, it is home to the headquarters of many of the world’s largest high-tech companies, including more than 30 of the Fortune 1000 and thousands of promising startups. In addition, Silicon Valley accounts for one-third of the nation’s venture capital (Athanasia, 2022). The origin of Silicon Valley normally can be recognized back to the establishment of Shockley Semiconductor in Silicon Valley, which “traitorous eight” later left Shockley Semiconductor and established Fairchild Semiconductor. As semiconductors are the most important technology of the 20th century, the Silicon Valley high-technology cluster start forming. (Kenney & Patton, 2006). The rapid growth of the semiconductor industry in Silicon Valley sets the foundation and spirit in the representation of Silicon Valley, which is technology, innovation, cooperation, and well profitable, it has become the cultural symbol of Silicon Valley. Moreover, the mutual benefit between government and enterprises and high return investment rate towards the high-tech industry. All these shapes the culture of Silicon Valley today. The video above clearly outline and explain the history of Silicon Valley.

Google” by Kazuhisa OTSUBO is licensed under CC BY-SA 2.0

Economic influence

The economic factors play an important role in the dramatic growth of Silicon Valley which Ferrary and Granovetter (2009) point out that Silicon Valley has not only produced one of the highest levels of economic growth in the United States because of its pioneering technological expertise and entrepreneurial engine, but most importantly, its complex web of innovation has helped build it. In this network, interactions with venture capital firms provide an important source of robustness that drives the growth of the most noteworthy high-tech startups. The venture capital industry and Silicon Valley work closely together. At the same time, the former promotes the rapid development of Silicon Valley to a certain extent. Because there is a stage in the life cycle of high-tech startups that requires external funding because they are not generating enough revenue. So, venture capital is crucial at this stage (Ferrary and Granovetter, 2009). And for venture investors, no one wants to miss the next black swan which events are very rare, unpredictable, and have a huge impact (Lebret, 2013), such as Apple and Facebook. The web theory (Ferrary and Granovetter, 2009) points out that at least twelve different agents have been involved in the creation and development of successful start-ups: universities, large corporations, research labs, venture capital firms, law firms, investment banks, commercial banks, certified public accountants (CPAs), consulting groups, recruitment agencies, public relations agencies, and the media. Each of these twelve agents contributes in a different way to the life cycle of creating innovative start-ups. It demonstrates that Silicon Valley creates a positive circulation which is a circular chain acting on Silicon Valley. When a founder builds a startup, venture capital firms will provide it with funding, premise is that the startup has future development, and when a startup is successful, a successful founder guides and invests in new startups companies, increasing opportunities for a new generation of entrepreneurs, successful founders continue to make new investments. And that is the essence of continuous innovation and development in Silicon Valley. For example, one of the founders of Fairchild Semiconductor, Kleiner co-founded the venture firm Kleiner Perkins, which has gone on to invest in hundreds of companies, including Google and Symantec (Morris, 2014). And by 2006, Google which was founded by Sequoia Capital and Kleiner Perkins had become one of the largest companies in Silicon Valley, acquiring startups in the region such as YouTube which was funded by Sequoia Capital. The investment industry is driven by profit first. If a start-up company has the potential of succeeding, it is worth venture investors taking a huge risk for the high return on investment. And it is how innovation, one of the cultural symbols can continuously develop in Silicon Valley.


Obama Pride on Facebook” by Barack Obama under CC BY-NC-SA 2.0

Political influence

Tracing the origin of Silicon Valley from a historical perspective, O’Mara (2019) illustrated that the government played a key role in building Silicon Valley, Silicon semiconductors and integrated circuits invented and developed in Silicon Valley were exactly what NASA needed—small, light, and powerful. As the Apollo program progressed, NASA placed large orders and became the most important early customer for Silicon Valley start-ups, with high demand driving down prices and enabling the chips to hit the market at the same time. In this process, the government builds a healthy partnership with the start-up companies like Fairchild Semiconductor. The government needs high-tech companies to continue to innovate products and the start-up also benefit from the government-issued scientific research funding and development subsidy programs. From the founding of Fairchild Semiconductor to the successful landing of the US on the moon, nearly 90% of US chip manufacturing companies were born in Silicon Valley (O’Mara, 2019). And this has also spawned a brotherly culture of close collaboration in Silicon Valley, where people are used to sharing ideas with each other rather than sticking to their own perspectives, as the truth is that no independent company can monopolize large orders from the federal government (O’Mara, 2019). Moreover, the freewheeling startup style of Silicon Valley leaves little room for the participation of the government, and a distaste for bureaucracy and political normality has been a hallmark of tech culture for a long time, the tech industry has a consensus dissatisfaction towards the government. However, the government has played a role in Silicon Valley in a way that perhaps was not consciously intended to be the catalyst, but it did promote the rapid development of Silicon Valley (O’Mara, 2019). In another aspect, the rapid development of social media platforms in the 21st century makes it as the most powerful propaganda tool. Traditional mailing ads are worthless in the face of cheap and disseminated social media, and a single tweet from a candidate can attract more voters than any speech (O’Mara, 2019). And Silicon Valley loves Democrats which in the 2012 presidential election, 83 percent of donations from top tech companies went to the Obama campaign (Ferenstein, 2015). It demonstrates the relationship between Silicon Valley and the government has become closer, and leading social media companies in Silicon Valley, such as Facebook, control the attitude of American public opinion towards the government to a certain extent. Silicon Valley cannot achieve such a large national influence without policy and the role of government in it, and the relationship between Silicon Valley and the government has also shaped the overall culture of Silicon Valley today.


 “Social media” by Susanne Nilsson under CC BY-NC-SA 2.0

Social aspect

The problem with diversity in Silicon Valley has always had a lot of attention and people of color and women do not have justice treatment in Silicon Valley. And it can track back to the progress of Fairchild Semiconductor. Early Silicon Valley was a vibrant male environment, such as marijuana smoking, and LSD injections are very common in Silicon Valley (O’Mara, 2019). It has led to becoming a culture in Silicon Valley in which white people and the upper middle class dominate Silicon Valley. Ten large technology companies in Silicon Valley did not employ a single black woman in 2016. Three had no black employees at all. Six did not have a single female executive (Rangarajan, 2018). And the diversity reports from tech companies reflect poor demographics for Silicon Valley’s workforce, which remains predominantly white and predominantly male (Cook, 2019). This entrenched perception needs to change, and Silicon Valley tech companies need to have further action on diversity instead of just making a promise through statements.


Silicon Valley is one of the symbols of economic development in the United States in the 20th and 21st centuries. Cooperation with the government, high ROI in the high-tech industry and unicorn companies, and social background build today’s Silicon Valley. Silicon Valley is the outcome of the rapid economic development of the United States in the twentieth century, various aspects of political, economic, and social shape the cultural background which are innovation, collaboration, equality, and freedom of Silicon Valley today. However, social issues such as diversity still need the companies in Silicon Valley to have further action.


References list

Athanasia, G. (2022, February 10). The Lessons of Silicon Valley: A World-Renowned Technology Hub. CSIS. Retrieved October 13, 2022 from

Cook, K. (2019). Culture & Environment. In (1st ed.), The Psychology of Silicon Valley Ethical Threats and Emotional Unintelligence in the Tech Industry. Springer International Publishing.

Kenney, M., & Patton, D. (2006). The Coevolution of Technologies and Institutions: Silicon Valley as the Iconic High-Technology Cluster. Cluster Genesis: Technology-Based Industrial Development, 38–60.

Ferenstein, G. (2015, Nov 6). The unusual politics of Silicon Valley, explained. Vox. Retrieved October 13, 2022 from

Ferrary, M., & Granovetter, M. (2009). The role of venture capital firms in Silicon Valley’s complex innovation network. Economy And Society, 38(2), 326-359.

Lebret, H. (2013, May 13). The Black Swan and Start-ups. Start-up. Retrieved October 13, 2022 from

Morris, R. (2014, July 26). The First Trillion-Dollar Startup. TechCrunch. Retrieved October 13, 2022 from

O’Mara, M. P. (2019). The code: Silicon Valley and the remaking of America. Penguin Press.

Rangarajan, S. (2018 June 25). Here’s the clearest picture of Silicon Valley’s diversity yet: It’s bad. But some companies are doing less bad. Reveal. Retrieved October 13, 2022 from

Reese, H. (2019, July 8). The Hidden History of How the Government Kick-Started Silicon Valley. OneZero. Retrieved October 13, 2022 from