What India Can Learn From Stanford, The Catalyst For Silicon Valley’s Success

“India can benefit tremendously from the lessons learned from Stanford University’s remarkable rise to preeminence, its role in the success of Silicon Valley, and the impact on students, society, and the nation.” — Nalanda 2.0, a think tank on higher education.

You probably know about Silicon Valley, the hotbed of research, innovation, and start-ups located in California (USA), and birthplace of companies such as Apple, Google, Facebook, Intel, Oracle, Cisco, HP, Salesforce and LinkedIn.

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But do you know who is credited for the formation of Silicon Valley?

You may be surprised to know that the person regarded as the “father of Silicon Valley” is not any of the incredible entrepreneurs, like William Hewlett or David Packard (of the Hewlett-Packard fame) or Gordon Moore (of the “Moore’s Law” fame and co-founder of Intel) or Steve Jobs (the co-founder of Apple), but Fred Terman, a faculty member at a world-class multidisciplinary research university.

Terman was former provost and faculty member at Stanford University. He is also credited for the amazing rise of Stanford from a regional university in the United States in the 1940s to a premier research university in the world by the 1960s.

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Stanford: An Elite University and an Innovation Powerhouse

Stanford’s breadth and depth of research are driving significant wealth creation, economic prosperity, and an impact on humanity. Global brands such as Google and Cisco originated from research conducted at Stanford. According to a 2012 study, since the 1930s, Stanford entrepreneurs (faculty and alumni) have started 39,900 companies, which in turn have created 5.4 million jobs and generated the US $2.7 trillion in annual revenues.

Currently, there are more than 5,300 externally funded sponsored projects across Stanford. In 2014, Stanford received US$1.33 billion in research funding. This includes funding for the SLAC National Accelerator Laboratory, originally called the Stanford Linear Accelerator Center (SLAC). In 2013–14, the university received approximately US$108 million in gross royalty revenues from licensing 655 of its technologies.

Its faculty members are extending the frontiers of knowledge; increasing our understanding of the world and universe we live in; educating and preparing students for their lives and careers; and informing policy, affecting change, and starting companies. No wonder, the best and the brightest students and faculty members from around the nation and the world are flocking to be part of this intellectual and innovation hub.

The current faculty includes 21 Nobel Prize and 5 Pulitzer Prize winners, 2 Fields Medalists in mathematics, and 27 MacArthur Fellows. It also includes faculty members who have been inducted to prestigious memberships: 50 in the American Philosophical Society, 66 in the Institute of Medicine, 105 in the National Academy of Engineering, 154 in the National Academy of Sciences, and 276 in the American Association of Arts and Sciences, to name a few.

In 2014, the university raised close to US$1 billion in private resources from alumni, grateful patients, friends, corporations, and foundations. Stanford is an innovation powerhouse and getting stronger every year.

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India: Importance of World-Class Higher Education System

There are 20-26 million children born in India every year. In the next 35-50 years, India has to prepare and educate 700 million to 1.3 billion young men and women for their lives and careers. This is India’s defining challenge and opportunity of the 21st century!

India must also address its mega challenges—issues that are affecting over 100 million people—such as jobs for the youth, poverty, urban migration, energy, water, food, health, environment, climate change, gender inequality and women’s security, law and order, corruption, and education.

Stanford offers compelling evidence on why the higher education system is the nerve center for any nation and society—a world-class university educates and prepares professionals for various sectors of the society; spurs the research, innovation, and start-up ecosystem; and addresses the challenges facing the society.

Inspiringly for India and its higher education system, Stanford was not always like this.

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Stanford’s Remarkable Rise to Preeminence

Leland Stanford, railroad president, land baron, and US senator, and his wife Jane founded Stanford University in 1885 in memory of their son. In 1891, David Starr Jordan, president of Indiana University, was appointed as the founding president of Stanford. Stanford opened with 555 students and fifteen faculty members.

It has grown in size, scope, and prestige since then. In 2014, it had an enrollment of over 7,000 undergraduate students and over 9,000 graduate students for a total of over 16,000. It had over 2,100 faculty members in its seven schools and colleges: the Graduate School of Business, School of Earth Sciences, Graduate School of Education, School of Engineering, School of Humanities and Sciences, School of Law, and School of Medicine.

Stanford’s rise to preeminence is especially remarkable after World War II. Since then, it has been climbing steadily toward the upward echelons of universities and now is firmly placed at the very top of global rankings. Now, Stanford is consistently ranked in the top 5 universities in the world. The 2014 Academic Ranking of World Universities (ARWU) placed it as the #2 university in the world. In all the fields ranked by ARWU, it was placed in the top 10.

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What has driven Stanford’s spectacular transformation since World War II?

“Terman Model” and Building Steeples of Excellence

“Fred Terman set a standard of excellence for the Stanford campus that has endured to this day,” noted Richard C. Atkinson, president emeritus of the University of California, who was a faculty member at Stanford during Terman’s tenure as the provost.

In the success of a large and complex organization such as Stanford, there are always many contributing factors—the unifying vision and mission; capable and dedicated leadership, faculty members, and staff; an engaged community and friends; and successful, generous, and committed alumni and families. California’s culture and its sunny weather are also said to have contributed to its success. However, as Atkinson and many others have noted, Terman is credited with the transformation.

To make Stanford “Harvard of the West (coast)”, Terman steadfastly followed a philosophy that he advocated and implemented at Stanford as a professor, chair, dean, and provost. Referred to by some as the “Terman Model,” it can be summarized as: building steeples of excellence in targeted areas by recruiting outstanding faculty members; having close links to industry and government; promoting the talents of faculty and students; providing the best research and teaching facilities; actively involving alumni and benefactors; having large numbers of outstanding students; and enabling entrepreneurial, corporate, and academic cultures.

Much like leading universities around the world, Terman viewed faculty hiring as critical. He explained, “If we are to build up a department of the greatest possible strength, the appointments to the lower ranks must be guarded just as carefully and given just as much consideration as appointments to the higher positions.” To make Stanford more attractive for exceptional faculty members, he helped increase faculty salaries and raised funds for fellowships, chair endowments, and research facilities. He also used the vast land gifted to Stanford by its founders as a magnet to attract them. By offering an opportunity to own a house on the university-owned land, he made Stanford even more attractive for faculty members who were typically weighing offers from multiple universities.

Terman also encouraged his students to start companies. David Packard and William Hewlett were Terman’s students. He mentored and brought them together. Soon, Hewlett-Packard (HP) was formed, and the rest, as they say, is history. He also encouraged start-ups and large corporations to locate their businesses in the newly established Industrial Park (later renamed Stanford Research Park.) Varian Associates, a company started by Stanford alumni and mentored by Terman, was the first company to lease space at the park. He was also pivotal in William Shockley’s return to Silicon Valley. Shockley’s co-invention of transistors spawned a whole new semiconductor industry.

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Terman believed that the proximity of corporations and new ventures would spur interactions with Stanford. He believed that it would also lead to meaningful research interactions, and Stanford students would receive valuable experience and employment. Faculty members also received valuable consulting engagements. The Honors Cooperative Program that enabled engineers from local companies to get their master’s degrees was another innovation that helped Stanford enormously. It fostered closer ties with the local companies and gave the university higher tuition revenues. Finally, these corporate relationships also benefitted the fund-raising efforts. Stanford Research Park and companies located in it further attracted additional companies to move their businesses to the area. Terman and Stanford nurtured the Research Park and this ecosystem has evolved into today’s Silicon Valley.

Terman ensured that Stanford benefited from the post-war research. The increased research funding provided much-needed resources to increase faculty salaries, hire more graduate students, and improve research facilities. Winning big projects also gave Stanford’s prestige a welcome boost.

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So, what can leaders of India’s central and state governments and higher education institutions, bureaucrats, and philanthropists learn from Stanford, its amazing transformation and it’s even more impressive impact?

Lessons from Stanford for India and Its Colleges and Universities

Stanford University’s contribution to research, education, innovation and startups makes it evident that colleges and universities are the nerve centers for the society and the nation. There are a number of lessons from Stanford, most importantly:

1. Existing institutions can transform themselves. Stanford’s transformation from a regional university to the top of the world rankings is inspirational. It provides evidence that existing colleges and universities in India, with the right vision, mission, leaders, model, and hard work, can transform themselves to a premier status in the country and the world.
2. The Terman Model. The demonstrated success of this well-thought-through and executed approach could transform existing institutions as well as provide a blueprint for building new ones.
3. Innovation and startups matter. The ultimate testament for basic and applied research and innovation is building new products or services that make our lives more productive, improve our health and environment, and make the world a better place. Despite the odds of success, startups generate tremendous wealth and collectively create millions of jobs. Stanford provides compelling evidence that an innovation and startup culture in a university pays dividends for all the stakeholders in the long-term.

The land of Vedas, Gautama Buddha, Panini, Aryabhatta, Vivekananda, C.V. Raman and universities such as Takshashila and Nalanda deserves four to five elite universities like Stanford. Therein lies India’s opportunity to provide an excellent education to its people, spur its research, innovation and start-up ecosystem, and address its mega challenges—clearly a US$10+ trillion opportunity for a nation of 1.3 billion people!

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Note: This article includes an excerpt from Building Golden India (2015). The author and publisher of Building Golden India have granted The Logical Indian the rights to publish the copyrighted materials.

About the Author: Shail Kumar is the Founder and President of Nalanda 2.0., Former administrator at UC Berkeley and UC San Diego. He received his MBA from Indiana University, Bloomington and B.Tech. (Hons.) from IIT Kharagpur.

Corresponding author: [email protected]

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Acknowledgments:

Additional Resources:

• Gillmor, C. Stewart. Fred Terman at Stanford: Building a Discipline, a University, and Silicon Valley (Stanford: Stanford University Press 2004)
• Stanford University:

Nalanda 2.0 is a nonpartisan and nonprofit think tank that aims to make India’s higher education system world-class.

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