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Silicon Forest 174 Silicon Forest Chapter 12 Silicon Forest F. E. Ian Hamilton Department of Geography London School of Economics and Political Science The Silicon Valley in Santa Clara Clackamas, Washington (in Oregon) County, south of San Francisco, is well and Clark (in Washington) -- that make known and appropriately named given up the Portland-Vancouver metropolitan its focus on activities based on silicon­ area. Unfortunately the latest data on chip technology. On the other hand, hand are three years old - for March perhaps "Silicon Forest" sounds a 12, 1984. Furthermore, for reasons of rather grandiose title for the new in­ confidentiality about specific firms, dustrial and business service develop­ most Standard Industrial Classification ment in the Portland metropolitan area. (SIC) entries in this source do not give It suggests that the scale, diversity, and exact employment, only bands, such dynamics of the region's high tech are as a range of 2,500-4,999 employees in becoming sufficiently prominent to be SIC 367 in Washington county. This widely recognized at the national level. provides a crude estimate of high tech Of course, the adjective "silicon" has employment in the Portland area as be­ been hackneyed, devalued, even mis­ tween a minimum of 26,548 and a max­ construed by being permutated to de­ imum of 47,041 in the week including saibe so many other areas of the counhy, March 12, 1984 - figures albeit up on like Colorado's "Silicon Mountain" and those of 22,928 to 44,019 in the same Texas' "Silicon Prairie," and places abroad week in 1982. such as Canada's "Silicon Valley North" The second source is a survey of (Steed, 1986), central Scotland's "Silicon firms conducted in 1985 by the Portland Glen" or Japan's "Silicon Island" of Chamber of Commerce and the Tualatin Kyushu. Yet, in a time of slogans, Valley Economic Development Corpora­ cliches and shorthand, the adage "Silicon tion. This is certainly far more accurate, Forest" seems to be apt for the contem­ but may not be complete as it covers porary Portland scene as it captures the only 173 firms, while it is believed that imagination of the public, politicians, there are now more than 200 high tech professionals and entrepreneurs alike firms in Portland (Figure 12.1). The most and encapsulates a set of conditions striking specialization is in SIC 382, and forces with strong implications for measuring and control instruments, a the future . field dominated by Tektronix, followed It is difficuIt to classify high tech by SIC 367, electronic components, a activities in the Portland area. For this very diversified production group, and reason the focus here is on firms. Two SIC 357, office, computing and accounting sources of information are used. The machinery. Of far lesser scale, but first comprises data from the U.S . perhaps not importance, are SICs 366, Bureau of Census' County Business Patterns 384, 361, and 737. covering the four counties -- Multnomah, From this information it is not un­ Silicon Forest 175 Table 12.1. A sample of 173 high tech firms in the Portland-Vancou ver region by SIC groups, 1985 (Tualatin Valley, 1985) . No. of Size Employ­ SIC Firms <49 50-499 >500 ment 356 General industrial machinery 2 2 12 357 Office, computing machinery 21 16 4 2,166 361 Electric transmission equipment 3 2 651 362 Electric industrial apparatus 12 10 2 498 365 Radio and Television equipment 4 3 1 145 366 Communications equipment 20 15 5 970 367 Electronic components 31 24 5 2 5,930 369 Misc. electrical machinery 5 3 2 301 372 Aircraft and parts 4 4 40 381 Engineering, laboratory, 9 7 2 260 scientific instruments 382 Measuring and control 28 23 3 2 22,515 instruments 383 Optical instruments and lenses 3 3 40 384 Surgical, medical and dental 14 11 3 755 instruments 737 Computer, data processing 17 14 3 652 service Total 173 137 31 5 34,934 reasonable to estimate that up to 40,000 - one of the lowest amongst all Ameri­ workers are employed in Portland's can SMSAs - most expansion must high tech today. This is equivalent to have occurred after 1980, considerably only one-tenth of the high tech work raising its U.S. rank. force in Silicon Valley (Saxenian, 1985). Second, changes in the population Although this seems to be a very small of high tech firms since 1976 lend sup­ proportion, the following points should port to the reality of this growth. The be borne in mind. Oregon Department of Economic De­ First, the U.S. Office of Technology velopment claims that the number of com­ Assessment (OTA) in 1984 calculated puter and electronics firms alone in the that Portland's high tech employment State increased by 60 percent from 568 in 1976 was only half that figure to 910 between 1972 and 1984, making (19,214), placing it 26th amongst U.S. it one of the regions of fastest high SMSAs - albeit ahead of such centers tech growth in the entire country. as Austin, Texas, Miami, Florida, and Based on this, only California and the Raleigh-Durham, North Carolina, Massachusetts, the historic high tech but well behind Seattle, Washington (c. core areas, have more of these firms on 48(000). Since the report claims that a population ratio basis than Oregon ' Portland's 1976-80 high tech employ­ amongst the 50 states. New births, ment growth rate was only 18.3 percent spin-offs from existing firms, and in­ 176 Silicon Forest movement of firms from outside Oregon (3,250) in Hillsboro; and Coe Manufac­ explain these increments. But much turing (150) in Tigard. All in all, about growth was localized in Portland 23,000 jobs are localized in this zone. which, according to the American Elec­ Other clusters are far less marked. tronics Association, now ranks 10th in Those worthy of note occur: in central the nation in the numbers of electronic and inner Portland, which with over and information-processing companies. 1,000 employees, still serves as an "in­ Third, until recently firms have cubator" for small firms but also con­ significantly expanded numbers of jobs. centrates several important computer For instance, by 1985, employment in software producers; and in the south­ Tektronix alone, the leading firm in eastern Milwaukie/Clackamas area Portland, exceeded 75 percent of the along highway U.S. 224 near the 1-205 OTA's 1976 total of high tech jobs for interchange (Figure 12.1). There, some the entire metropolitan area; and many medium-sized firms were joined in other firms had grown, too. 1986 by OECO (650 workers) which re­ Fourth, Portland-located firms have loca ted from inner southeast Portland achieved very significant U. S. and to what is believed to be the area's world market penetration in selected largest new electronics facility since high tech niches. This is particularly 1979. About 3,000 people work in high true of the "raw materials" end of the tech in this zone. Many small firms are production chain. Two-thirds of the scattered elsewhere, though medium­ non-communist world's entire silicon sized ones are sited near Portland 1nter­ wafer output for microchips is localized na tional Airport in the northeast. within 40 miles of downtown Portland. Wacker Siltronic (800) forms a major At the other end of the chain, Portland "outlier" along the Willamette River in firms are pre-eminent in final goods the northwest. Across the Columbia, such as measuring, controlling, and Vancouver, Washington, hosts a notable navigational instruments, array proces­ group of firms with about 3,000 sors, and computer-assisted design employees, the most prominent being (CAD) and computer-assisted engineering Shin- Etsu Handotai (SEH) America (CAE) equipment. (675), Hewlett-Packard (500), and a The location of high tech firms in branch of Tektronix. the Portland area is characterized by clusters (Figure 12.1). The dominant FACTORS IN THE RISE OF aggregation is on the west side along PORTLAND'S HIGH TECH INDUSTRY the Interstate Highways 1-5 and 1-217, Silicon Valley is loca ted near the site especially in Tigard and Beaverton, and in the Sunset Corridor in Beaverton, of the first electronics breakthrough -­ the invention in 1912 of the cyclotron, Hillsboro and Forest Grove along U. S. from which television, telecommunica- Route 26. Growth here has been the major phenomenon of the last decade. By far the largest firms (by employment) have located here on spacious sites: Tektronix (13,024 workers), Floating Point Systems (1,320), Electro Scientific Figure 12.1: Di stribution of high tech es­ tablishments in Portland Instruments (800) and Mentor Graphics metropolitan area (various (780) all near Beaverton; Intel Corporation sources). t-.. t-....... .... <IJ ...QJ ....o r::: o ~ (j) i I. (.l ~I!.~ ~' 'for",t­ . 'Gro.... • ," - c-~"' ' J!. - -; -~~ !~: ~ '---i. -l .. ~ 1/ ':•• t 't' ... " .. , ... , TJ.c. TRONI X I' 1:'0• • • - -­ . J...-1'-P~~~~ ,-,_ INT~ ~:~;E- •• ~1! ~~~(n'FII:IP ~ \ ~' ~ ', j ~,.'II , 'weNTOR :: ... GRAPHICS ...~ ,. il f..-w...-. il :~ ... ,..: " Jflll'i . ~. ~ -,....-!.:~ ..~ WASHINGTC* CO. ' YAMHIa: to.- - I ,-~ / H_­ .. ~J .. I',t ,.._/., ,{""!.-:.-;',, .~ ' -..... ..-..J--... HIGH TECHNOLOGY INDUSTRIES , ~.' - L,.:;-.,-p ..~,. \ < \ "­ \ • FIRWS WITH lESS THAN "9 \ E~PLO Y EES \ \. "~ • FIRWS WITH 50- 49g EMPLOYEES 01 • FIRWS WITH 600-2 499 E'*lOYEES ;j e FIRWS WITH MORE THAN 2500 Etr.FLOYEE S 178 Silicon Forest tions and computers were all developed. be linked to three major factors. By contrast, Portland's high tech origi­ New Market Opportunities nated only 40 years ago. Yet the seeds were sown in the 1930's. Then, Portland Local and Pacific Northwest regional had a lively radio club, a reflection, market opporhmities induced the develop­ perhaps, of the desire of Oregonians ment and adaptation of existing firms to reduce or overcome their relative iso­ and the birth of new ones.
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