Tuesday, February 01, 2011

Route 128: Birthplace of The Digital Age

When most people are asked to name the location of the  Digital Age, the first place which comes to mind is  Silicon Valley. While Silicon Valley has certainly played a key role in the Digital Age, its birthplace was 3,000 miles East within a circumferential highway around Boston named  Route 128.
The original analog and early digital computers were built by companies during the 1950s which set up operations in the Greater Boston area. Major companies located in the broader Route 128 area included  Digital Equipment Corporation Data General Thermo Electron Corporation AnalogDevices Computervision GTE Polaroid Sun Microsystems BEA Systems EMC Corporation, and  Raytheon.

“The Magic Semicircle”
In 1955, Business Week ran an article titled “New England Highway Upsets Old Way of Life” and referred to Route 128 as “the Magic Semicircle”. Magic referred to the nascent computer science companies which emerged to change the world forever.
A key resource in the Boston area is MIT, as well as Harvard and several other universities that have developed technology expertise in specific areas: Boston University in photonics, for instance. Graduates of these institutions founded groundbreaking tech companies such as Digital and Data One. The founders of Digital Equipment were alumni of the Digital Computer Laboratory at the Massachusetts Institute of Technology (MIT)
Digital, located in Maynard, MA is best known for introducing the minicomputer to the information processing industry, a development that altered the way potential customers perceived the computer. In defining the needs of a new generation of computer users, Digital set the stage for the development of the personal computer and the workstation. In 1960 the company introduced its first computer, the PDP-1 (Program Data Processor). The PDP-1 came with a cathode-ray tube (CRT), a screen which allowed the user to see what was being entered and received from the central processing unit. Unlike the room-sized mainframe computers of the day, the PDP-1 was no larger than a refrigerator. In the fall of 1965 Digital unveiled the PDP-8. This machine triggered the explosive growth of the minicomputer industry, and the company grew from a small technical company to a major computer manufacturer.
Digital’s competitor, Westborough based Data General-One, was one of the first minicomputer firms from the late 1960s. Three of the four founders were former employees of Digital Equipment Corporation. Their first product, the Nova, Data General-One, made it one of the first minicomputer firms from the late 1960s. The Nova was a 16-bit minicomputer.
By the ’70s and early ’80s, the computer architectures driving the industry were developed by people working in companies such as Digital, Prime, and Data General. With the overwhelming dominance of the PC, however, the center of heat and light for the PC is Intel as the microprocessor provider and Microsoft as the operating system provider.
These computer technology companies were the key generators of economic growth in Massachusetts during the 1980s. The term “Massachusetts Miracle” refers to a period of economic growth in the state of Massachusetts during most of the 1980s. Previous to this, the state had been hit hard by deindustrialization and resulting unemployment. The growth was heavily centered in high-tech industry and financial services, within Boston and in its suburbs along Route 128. The expansion of the high tech industry along MA-128 has led to the term “128″ meaning more than just the road itself, but the technology area as a whole, much like Silicon Valley.
20th Century Business Model
The early success of Route 128 was their innovative technology and management style. Though cutting edge for it’s time, most companies lost their competitive edge by the mid 1980s. Digital is a good case study. Digital’s customers were mostly scientists and engineers who did not require technical support, the company provided virtually none of the software and maintenance services offered by its giant competitors. Digital did not spend its capital on software design and maintenance services, and passed its savings along to customers. With its lion share of the workstation market, it was content with its dominance in the core minicomputer market. However Digital was slow to adapt its product line to new markets.
By 1990, companies such as Digital, Data-One and Wang were unprepared for the 21st Century and the advent of cyberspace. Though Norwood, MA based Wang enjoyed far more success in the PC market, it succumbed to a hostile takeover. Digital had ignored IT consultants and trend analysts who predicted the old mainframe model was fast becoming obsolete.
IBM, which invented the PC, saw the potential of the consumer market for computers after the Applecompany sold its first computer in 1978. The Route 128 companies lacked the vision to look for market other than big business as well as other software and hardware engineers.
Silicon Valley, in contrast, was ahead of the curve regarding the consumer computer market. Intel made strategic partnerships with IBM and other PC manufacturers, as well as partnering with Microsoft which placed Silicon Valley front and center of the the dot com boom.
Route 128 Today
Today, according to economists, venture capitalists, and technology executives, Boston’s strength lies in fields like Internet software and biotechnology, which are fueled by the concentration of talent flowing out of MIT, Harvard, Boston University and others. A 2004 study by MIT and the Bank of Boston, an early national review of the economic impact of a research university, found that MIT graduates and faculty had founded 4,000 companies, employing 1.1 million people and generating $232 billion in worldwide sales. If the companies founded by MIT alumni formed an independent nation, it would be the 24th-largest economy in the world, somewhere between South Africa and Thailand, the study said. Massachusetts has the highest number of patent applications per capita of any state. There remains, however, no comprehensive report of these figures since the Panic of 2008.
Greater Boston remains a global technology hub. It has a healthy competition with Silicon Valley. IBM’s Lotus Development Corp., based in Cambridge, is holding its own in groupware vs. Netscape and Microsoft. EMC Corp. in Hopkinton, Mass., is the world leader in computer data storage products and is on the leading edge of cloud computing. Open Market Inc., another Cambridge company, is successfully competing against Microsoft and Netscape in selling software for electronic commerce.
Boston’s greatest strength is that it remained relatively unscathed by the Dot Com Crash of 2000, which left a devastating impact on Silicon Valley in terms of the number of lost jobs. Another asset compared to Silicon Valley is Boston’s lower cost of living. Most of the companies are accessible by Boston’s old yet efficient public transit. While commercial and residential rental rates remain high, the cost of renting an apartment in Somerville or Medford is lower than in Silicon Valley. Even in the current turbulent housing market, housing prices in Greater Boston are competitive with Silicon Valley.
While Boston remains in the shadow of Silicon Valley, it shows no sign of disappearing as a region of IT innovation and development.

Labels: , , , ,


Post a Comment

<< Home