which criticized large organizations for suppressing personal expression. The moderate climate of Silicon Valley, combined with a pool of educated talent from California universities and a largely nonunion workforce, attracted investors and corporations alike. Publicity about Silicon Valley in the 1970s generated discussion about new opportunities for U.S. industry, especially in electronics. In this respect the Valley represented a significant demographic change in American society: a shift in political and economic power from the older industrialized Northeast and Midwest to the Pacific Coast. The rise of Silicon Valley occurred at a time when major changes in financial markets and the availability of capital were affecting many established electronics companies.
During the 1950s and early 1960s, much of the valley relied on military contracts, but this dependence declined as commercial and then personal markets for computers emerged. Investors hoping for a very high rate of return increasingly were willing to risk supporting the new electronics companies even though as many as 25 percent of them failed within a few years. Demand for capital increased as the size of electronic components, such as memory chips, decreased. Hand in hand with smaller components developed the need for more sophisticated and costly technologies in manufacturing. By the late 1980s companies estimated that they needed as much as $1 billion to establish a manufacturing facility for the latest generation of semiconductors. Observers of investment practices and corporate strategies began to