To answer the question of why Silicon Valley has been so successful, we have to first answer another question:
Where is Silicon Valley?
The answer to both questions is that Silicon Valley was built in the area surrounding Stanford University. Stanford is one of the world’s leading research universities, especially when it comes to technology, and many of the early Silicon Valley pioneers were alumni. Around the beginning of the 1900s, Stanford had taken on the job of supporting the economic development of the American West in order to free it from eastern money. That goal helped lead to the formation of the Stanford Industrial Park in the 1950s. Under the watchful eye of Stanford’s dean of engineering, Frederick Terman, the SIP leased land surrounding the university campus to high-tech companies founded by Stanford alums like HP founders Bill Hewlett and David Packard. Other tech giants who got their start in the Stanford Industrial Park include Kodak, General Electric, and Lockheed Martin.
Terman’s work coincided with the arrival in California of William Shockley, co-creator of the transistor. Shockley’s mother lived in Palo Alto, and he moved his tech company from New Jersey all the way to California when she fell ill. At the Shockley Semiconductor Laboratory, Shockley created the first silicon-based transistor, giving Silicon Valley its name. Its reputation as a tech hub was solidified in the late 60s when Stanford was a major player in the ARPANET project, the predecessor to today’s internet. By the time a young engineer named Steve Jobs founded his own computer company out of his parents’ Silicon Valley garage in 1976, the area was already home to millions of dollars in venture capital.