The Semiconductor Industry: Revolution in Miniature . The History and Impact of Semiconductor Electronics. Ernest Braun and Stuart MacDonald. Cambridge University Press, New York, 1978. vii, 232 pp. $16.95.

The process of creative construction: knowledge spillovers, entrepreneurship, and economic growth

“…Indeed, systematic underulitization of opportunities created by knowledge investments will result in creative destruction rather than creative construction, since incumbents fail to appropriate the value for improving their own performance and survival. For example, among the two types of firms studied by Brittain and Freeman (1986), Shockley Transistor and Fairchild Semiconductor ceased to exist in 1968 and 1979 respectively, while Texas Instruments still lives on.…”

“…Further, scholars have explicitly linked the growth of regions and industries to spinout activity (Brittain and Freeman 1986;Klepper 2007;Saxenian, 1994). They document the positive synergies and agglomeration economies caused due to geographical clusters enabled by knowledge spillover strategic entrepreneurship.…”

“…However, just as calls for balanced scorecards of organizational performance (Kaplan and Norton, 1992) draw attention to non-financial measures of performance, the knowledge spillover view of strategic entrepreneurship highlights the fact that traditional shareholder value maximization measure of firm performance may underestimate the value created by an organization by not accounting for the spillover benefits it generates. Brittain and Freeman (1986) conducted an insightful study that examined value creation of two firms-Texas Instruments and Fairchild semiconductor-in the semiconductor industry and showed that the silicon valley phenomenon can be genealogically traced back to Fairchild (and its own parent Shockley Transistor) due to 351 employee entrepreneurs in the period. The inclusion of the inception and growth of these "Fairchildren" in Fairchild's creation of value, relative to its rival Texas Instruments that generated very few spinouts during the same period, greatly increases the value beyond the traditional performance measures of profitability or survivability.…”

Disagreements and intra-industry spinoffs

“…Most of the studies of intra-industry spinoffs examine U.S. manufacturing industries during their first 30 to 35 years when entry is greatest, including automobiles (Klepper [2007a(Klepper [ , 2007b), tires (Buenstorf and Klepper [2007]), semiconductors (Brittain and Freeman [1986], Klepper [2007c]), disk drives (Agarwal et al [2004], Franco and Filson [2006]), lasers (Sleeper [1998], Klepper and Sleeper [2005], Sherer [2006]), medical devices (Chatterji [2008]), and biotechnology (Mitton [1990], Stuart and Sorenson [2003]). A few parallel studies have been conducted for automobiles in Great Britain (Boschma and Wenting [2007]) and automobiles (von Rhein [2008]) and lasers (Buenstorf [2007]) in Germany.…”

A corporation’s culture as an impetus for spinoffs and a driving force of industry evolution

“…Spinoffs have begun to receive special attention in the literature in recent years due to their central role in the evolution of a number of new industries and industrial clusters particularly early in their life cycles (for an overview, see Klepper, 2009). This class of market entrants spurred the formation and growth of several well researched industries, such as semiconductors (Brittain and Freeman, 1986), automobiles (Klepper, 2002), biotechnology (Stuart and Sorenson, 2003), tires (Buenstorf and Klepper, 2009), disk drives (Agarwal et al, 2004), lasers (Klepper and Sleeper, 2005), and medical services (Chatterji, 2009). …”