Silicon Valley Garage or Government Lab: Personal Computing

April 7, 2009 | Jesse Jenkins,

The following is an excerpt chapter from the Breakthrough Institute report, Case Studies in American Innovation: A New Look at Government Involvement in Technological Innovation. You can download the full report here or read more excerpts from the document here.

An antique Apple II, one of the first commercial personal computers. The story of the PC is usually a romantic tribute to the unrestrained genius of lone inventors tinkering in garage workshops. Yet history shows that the active support of the federal government, particularly the U.S. military and space programs, was critical to the rise of Silicon Valley. Indeed, today's personal computer embodies a decades-long collaboration between private innovators and an active government.

The legend of the personal computer (PC), as it's normally told, emphasizes individual brilliance and initiative. The origins of today's industry titans like Microsoft and Apple are surrounded by romantic images of college dropouts tinkering away in garage workshops. This story is one of independence, of genius allowed to run free and inventions flourishing in the open market. Of course, the government is conspicuously absent here; as Bill Gates has said, "the amazing thing is that all this happened without any government involvement."

The PC legend may be compelling, but like all legends, it has more to do with fiction than fact. While the role of individual innovators can hardly be understated, the active involvement of the federal government - especially the military - was critical to the rise of Silicon Valley. Indeed, today's personal computer embodies a decades-long collaboration between private innovators and an active government.

From the beginnings of the computer industry, federal and military agencies promoted vital basic research into computing hardware and deployed early computers throughout the government. As economist Vernon Ruttan writes, "The role of the military in driving the development of computer, semiconductor and software technologies cannot be overemphasized. These technologies were, until well into the 1960s, nourished by markets that were almost completely dependent on the defense, energy and space industries." In fact, the ENIAC, the first electronic computer, was built in 1945 to crunch numbers for the Army Ballistics Research Laboratory. In the 1950s, the Army Signal Corps funded research into semiconductors, and weapons labs at the Atomic Energy Commission were the first purchasers of supercomputers, the ancestors of today's desktop PCs. NASA, the Department of Defense, the National Center for Atmosphere Research, and the U.S. Weather Bureau commissioned their own supercomputers soon after. Perhaps most importantly, the Air Force's SAGE air defense project generated numerous innovations in computing design and production during the early 1950s, including cheap manufacturing of computer memory, communication between computers, and the use of keyboard terminals.

The government was also heavily involved in the development of computer software. Defense agencies funded the basic R&D that led to early computer programs and programming languages. During the 1970s, in fact, defense spending fueled over half of all academic computing research, and grants from the military's Advanced Research Project Agency (ARPA) established the first university computer science programs at MIT, Stanford, Carnegie Mellon and elsewhere. The defense establishment took computing seriously. In 1962, ARPA's computer research budget exceeded that of all other countries combined; by 1970, its funding had increased fourfold. The Department of Defense was the single largest purchaser of software well into the 1980's, ensuring the consistent market demand that fueled an ever-growing industry.

In addition to producing major computing advances through research funding and direct acquisition, the federal government also cultivated the innovators and engineers of the modern computer industry. Many of the minds behind the groundbreaking work at Xerox's Palo Alto Research Center (PARC), the famous computer research center, and at corporations like Microsoft and Apple came straight from government agencies. Bill Gates and Steve Jobs might be famous names today, but others were crucial in the PC's development - men like J.C.R. Licklider, a pioneer theorist of human-machine interactivity and computer networking, and Ivan Sutherland, whose government-funded Sketchpad project created the first interactive graphics program and led to the invention of the computer mouse.

No less important, however, were the innumerable programmers, system designers, and computer theorists who cut their teeth and honed their skills at ARPA. So many veterans of ARPA and ARPA-supported university programs came to work at Xerox PARC that insiders there jokingly referred to an "ARPA Army." These numerous veterans of government-funded programs helped Xerox PARC develop the graphical user interface and the Alto, the world's first modern PC, and later scattered to run startup firms like Apple, Microsoft, and Adobe.

Popular myths about the rise of the PC make little mention of the government, but in reality, public funding built the foundations of personal computing. The government's prescient investments in computer research, hardware and software deployment, and computer science education unleashed a transformative technology and helped build a massive industry from the ground up.


  • Fong, Glenn (2001). "ARPA Does Windows: The Defense Underpinning of the PC Revolution." Business and Politics, 3(3), 213-237.
  • Ruttan, Vernon (2006). Is War Necessary for Economic Growth?: Military Procurement and Technology Development. Oxford University Press.
  • Weik, Martin (1961). "The ENIAC Story." Ordnance, January-February 1961. URL.

You can download the full report, Case Studies in American Innovation here or read more excerpts from the document here.