Follow the Money: Engineering at Stanford and UC Berkeley During the Rise of Silicon Valley

A comparison of the engineering schools at UC Berkeley and Stanford during the 1940s and 1950s shows that having an excellent academic program is necessary but not sufficient to make a university entrepreneurial (an engine of economic development). Key factors that made Stanford more entrepreneurial than Cal during this period were superior leadership and a focused strategy. The broader institutional context mattered as well. Stanford did not have the same access to state funding as public universities (such as Cal in the period under consideration) and some private universities (such as the Massachusetts Institute of Technology and the Johns Hopkins University in their early histories). Therefore, in order to gather resources, Stanford was forced to become entrepreneurial first, developing business skills (engaging with high-tech industry) at the same time Cal was developing political skills (protecting and increasing its state appropriation). Stanford’s early development of entrepreneurial business skills played a crucial role in the development of Silicon Valley.