Indian Entrepreneurs in Silicon Valley: The Making of a Transnati ...

At the time, private industry showed little interest in funding academic research, whereas federal support for basic research grew significantly, reaching approximately $140 million in 1949. Terman ensured that Stanford would be a successful recipient of federal monies. For Terman, industry was not an alternative to the government but rather an essential leg in a triangular relationship: university-government-industry. Stanford would conduct research sponsored by Washington, and industry would draw on Stanford-trained employees to develop technology for the government. Even though Terman’s vision clashed with those of the then-president of Stanford University, it was Terman’s vision that prevailed, and he was extremely successful in the endeavor to secure funds for the engineering programs he supervised. In 1946, Stanford’s total government contracts amounted to $128,000; a decade later, due largely to Terman’s efforts, total Department of Defense contracts amounted to $4.5 million. Obtaining funds was the first of many steps that led to invigorating the engineering departments at Stanford (Lowen, 1997).

The university instituted programs and invested in constructing a campus to ensure that there was a constant source of funding for Stanford’s research programs, that faculty and students at the university would have direct ties with local industry, and equally importantly, created a physical space that would make it possible for a closely knit technical community to interact with one another.