Silicon Valley and the surrounding Bay Area offer a unique case study for economic and technological growth. Understanding what makes this knowledge-based economy tick is the main focus of the Bay Area Council Economic Institute, a research group with unmatched connections to the Bay Area’s entrepreneurs, academic and research institutions, investors and business and public policy leaders. The Economic Institute’s unparalleled knowledge and insights are highly valued by  companies, organizations and individuals seeking to know about the changing Bay Area landscape.

Going back to 1945

“Because of a culture encouraging collaboration and risk, Silicon Valley has expanded well beyond its borders to impact the rest of the world.”

The roots of the Economic Institute can be traced back to the early days of Silicon Valley, when pioneers like Frederick Terman, the Varian brothers, William Shockley and two Stanford University graduates by the name of Bill Hewlett and David Packard were launching a technological revolution that would change the world. Led by a group of business titans, the Bay Area Council was formed in 1945 as a public policy and advocacy organization to pivot the region from a wartime to civilian economy and ensure the region remained innovative, competitive and sustainable. The Council later formed the Economic Institute to provide the important research and analytics crucial to its policy work.

Today, that economy operates at full force, bringing together world-class research institutions, government funding, venture capitalists, start-ups, incubators and much more. Throughout that innovation and growth, the Bay Area Council has been at work advocating for better infrastructure, public transportation, and environmental conditions. The Bay Area Innovation Economy is composed of many interconnected elements, as envisioned by the Bay Area Council, and they have all helped create the Bay Area innovation hub.

Up to speed in the 21st century

What’s extraordinary about the Bay Area Innovation Ecosystem is that it’s a natural phenomenon. Because of a culture encouraging collaboration and risk, Silicon Valley has expanded well beyond its borders to impact the rest of the world. Looking at investment alone, according to 2015 reports from the Bay Area Council Economic Institute, California far outpaces the rest of the United States as it pulls in over half of all venture capital investments, 80 percent of which goes to the Bay Area . This statistic is driven by Silicon Valley’s range of tech-related industries, spanning computer companies like Cisco and HP, internet companies like Facebook and Oracle, and biotech companies like Genentech and Bayer — and the area continues to foster industries surrounding technologies such as artificial intelligence and autonomous vehicles.

Only a few decades ago, research universities in the Bay Area relied on one main client: the government. Now many more commercialized outlets and sources of funding support those entrepreneurs who call Silicon Valley home. From collaborative campus models and federal research laboratories to independent research facilities, the research environment driving innovation is now richer and more diverse than ever before.

Entrepreneurs in this setting are supported by the entire Bay Area ecosystem: researchers, venture capitalists, universities, angel investors, etc. The area benefits from the local influence of technology giants like Google and Apple, and research institutions like Stanford University and the University of California campuses — and also from companies headquartered across the world that have set up shop in Silicon Valley.

The Bay Area, at its core, operates as a successful center of innovation because of the amount of interaction and collaboration taking place, and it’s an innovative environment that continues to spur further growth and advancement.