The Role of Silicon Valley in Corporate Innovation

Updated: Feb 10, 2019

In 1969, the senior leadership of Xerox (based in Rochester, New York) decided to create a new corporate research and innovation center and Xerox Palo Alto Research Center (PARC) born. Since then, PARC has played a significant role in the creation and enhancement of many of the technologies we take for granted today:

  1. Computer-generated bitmap graphics

  2. The graphical user interface, featuring windows and icons, operated with a mouse

  3. The WYSIWYG text editor

  4. Interpress, a resolution-independent graphical page-description language and the precursor to PostScript

  5. Ethernet as a local-area computer network

  6. Laser printers

  7. Object-oriented programming

And PARC is famous for failing to effectively commercialize the GUI and the mouse. Instead, the shared their concept with Steve Jobs and Apple. Walter Isaacson in his book, Steve Jobs, describes that event this way: “The Apple raid on Xerox PARC is sometimes described as one of the biggest heists in the chronicles of industry.” The result was first the Apple Lisa and then the MacIntosh – and Xerox’s own graphical interface PC, the Star, never took off. Even so, the development of the laser printer alone made Xerox’s investment in PARC a success.

Since the creation of PARC, an ever increasing number of major corporations have set up Eilif Trondsen, an economist and researcher at the Stanford Research Institute (SRI) and Strategic Business Insights calls Innovation Outposts. Why? Brad Power explained it this way in his October 2013 article in Harvard Business Review, Leveraging Silicon Valley – From where you are:

"How can you build your organization’s ability to sense and respond to rapid improvements in technology? Many large, successful companies are creating offices in California’s Silicon Valley to spot big new trends and learn how they can transform their organization in ways they couldn’t otherwise imagine. It’s no longer good enough to wait for change to come to your industry; you need to be out there where it’s happening. And a lot is happening in Silicon Valley."

So what is an Innovation Outpost? The following graphic gives Trondsen’s definition.

Many Japanese companies have had Innovation Outposts in Silicon Valley for a long time. The earliest arrived in the 1970’s. The number has gone up and down based on the relative health of the US and Japanese economies. From 2010-present, there has been another wave of companies Some of the Japanese companies with a larger presence include:

  • Fujitsu. Fujitsu Laboratories of America in Silicon Valley was established in 1993, to extend the global reach of Fujitsu R&D and in2012, FUJITSU TEN Corp. of America opened a new R&D facility, referred to as Silicon Valley Creative Square (SCS), in Sunnyvale.

  • Panasonic. Panasonic R&D Center Silicon Valley and its venture capital unit are located in Cupertino and the company is pursuing strategic partnerships (including with Tesla) and investments in key business and technology area of the company.

  • Konica Minolta. In 2014, the company established a new Business Innovation Center (BIC) to help transform the company's culture into a more agile and risk-taking operation and to expand beyond products into customer-focused and innovative services.

Most recently, companies from the Japanese auto industry have joined their global competitors in setting up Innovation Centers in Silicon Valley.

Why does this matter to technology companies in Japan?

These Innovation Outposts are actively looking for new technologies. It doesn’t matter if the company is from the US, Europe or Asia, it is almost always easier engage with these dedicated innovation teams in Silicon Valley than it is at the traditional corporate HQ.

If you are looking to partner with or sell to a major corporation, it is worth your time to find out where they have an Innovation Outpost and connect with them through their innovation teams.


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