Is location irrelevant to the information economy? Historically, the industry clusters that are both a result and a condition for economic growth have always required a geographic concentration of resources. A unique blend of technology, industries, access to networks, culture, available investment capital, geography, research facilities, universities, and labor markets has made the San Francisco region (which includes Silicon Valley) one of the richest and most innovative design centers on earth.

England in the time of the industrial revolution was ripe with innovation and seemingly endless combinations — of technologies steam engines, gears, electrical cells, internal combustion engines, telegraph, railroad, new steel technology. Today's correlations in Silicon valley are: routers, search engines, integrated circuits, wireless, relational databases, fiber optic cables, code compilers, CAD/CAE/CAM, productivity software, network management, etc.

The area's cultural landscape plays a part in innovation. New transplants are often unaware of or ignore social conventions and ways of thinking that restrict the discovery of new solutions.

San Francisco was the West's first real financial center — it spawned banks such as Wells Fargo and Bank of America. Cotton jeans made from the sails of the ships that brought the miners helped to start a thriving apparel industry, with companies like Levi Strauss, the Gap, Banana Republic and Esprit. Its concentration of artists, writers, software developers, scientists, musicians, and filmmakers evolved into Multimedia Gulch, home to companies like Macromedia, Wired. Most of the top high technology firms in the world are represented here, by headquarters or main offices: Adobe Apple, HP, Intel, Genentech, Raychem, etc.

A large number of inventions and innovations critical to IT were made in the region, such as: Postscript, the PC, the mouse, Netscape, the laser printer, Arpanet, television, integrated circuitry, and online banking.

One of the most critical factors in the region's success is the deep relationship between its educational & research institutions Xerox PARC, Interval Research, SRI and Stanford and businesses. This relationship allows companies to benefit from research that they would not be able to afford on their own. The first Internet browser and precursor to Netscape Navigator, Mosaic, was developed at the University of Illinois, Yet Netscape the company was founded and flourished in Silicon Valley. Why? Because the University of Illinois did not see itself as an integral part of the business community, to the disadvantage of the local economy.