Wikipedia has a good history of how Silicon Valley became Silicon Valley.
The area had roots in military research. Then in 1951 Stanford established an industrial park specifically for high-tech firms. It's also where much of the early work on the transistor took place and the semiconductor industry emerged.
(I'm basically summarizing Wikipedia's first few chapter headings)
"...The idea for such a region originated with Dr. Frederick Terman, a Stanford University professor who encouraged his students to start up their own electronics companies in the area instead of joining established firms in the East. The first two students to follow his advice were William R. Hewlett and David Packard, who in 1938 began developing their first product, an audio oscillator, in this garage."
Another contributing factor to this is that the largest Backbone to the internet terminates in the silicone valley. This makes it very desirable for internet companies who require maximum speed of data.
I notice that you’re all conveniently not mentioning Redmond, Washington (outside of Seattle)—home of Microsoft.
I’m familiar with the greater Silicon Valley area, though. My best friend’s brother co-founded Autodesk and co-invented AutoCAD. Autodesk is located outside of Silicon Valley, however, in the city of San Rafael (just across the Golden Gate Bridge from San Francisco), whereas Silicon Valley is located in the San Jose area.
@MrBlogger: SOME parts of California, such as its Central Coast—where I currently live. However, I’m actually thinking of moving back to Seattle (where I moved down here from, although I was raised in L.A.), because I’m a “big city” boy and the beautiful—but too little—town I’m living in is driving me nuts! I wouldn’t touch the L.A. of today with a ten-foot pole; it should be re-named North Tijuana!
Silicon Valley, New York (google for “Silicon Alley”), Seattle area, Austin, Atlanta all have strong concentrations of tech companies. The first three probably have the highest concentrations of startups.
Reasons: SF area, NYC & Seattle for obvious quality of life (no problem attracting employees); Atlanta because it’s a travel hub & the area is a manufacturing hub; Austin because it’s a arts-filled and liberal hub in a very conservative region (quality of life, again, and concentration of forward-thinking young/tech-connected people).
A first generation of companies spawned around the likes of HP and Fairchild Semiconductor have resulted in a great ecosystem of educational institutions, talent and venture money. Similar thing happened in LA for motion picture biz. And I guess Detroit to some extent. Initially not sure what conditions prevailed for HP and Fairchild. I think there was some military research nearby, too so DOD was likely a source of talent and cash, too.