The University Centrifuge: Spin-offs and Economic Development

The design for Apple Computer’s new headquarters in Cupertino, California, suggests that the US$5 billion dollar building will be as sleek and modern as the iPads, iPhones and computers that the company produces.

This spaceship-like building will run entirely on renewable energy, will use natural ventilation for 75% of the year, and will sit amongst 7,000 cherry, plum and apple trees.

Yet, why would a company choose to spend such a massive amount of money building a headquarters in this region south of San Francisco?

The answer lies in the realm of higher education, and in particular, one university: Stanford.

Long before the rise of Apple, Google, and Facebook, the Santa Clara Valley, also known as Silicon Valley, was a fertile farmland lined with citrus orchards and palm trees.

It would take the efforts of one man to help convert this region into the high-tech cluster it is today: Frederick Terman, the Dean of the School of Engineering at Stanford University.

It was Dr. Terman, who in 1951, helped to spearhead the creation of the Stanford Industrial Park, encouraging entrepreneurial graduates from the university to grow their companies on university land.

Frederick Terman clearly understood the power of a university to act as a centrifuge, spinning out innovative ideas that would create new industries.

However, what he did differently was to use the allure of subsidized university real estate to keep entrepreneurs close to the school, and in the process keep the brightest minds in close contact with one another.

As a result, the ‘apple’ would never fall far from the tree.

Marketing a destination as a place where smart, cool, and creative people live is a wise approach to stimulating economic development, and it usually requires a social meeting point for people to share and receive new ideas, such as a great university.

That’s why Apple refers to its new headquarters as a ‘campus.’

With its eco-friendly, modern design, the building will be an allure for people around the world who will dream up new Apple-related products and then set-up shop – right next door.







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