The role that location plays in SRI is also embodied in Silicon Valley’s combined effect. Dozen’s of global IT giants and countless small or medium high-tech companies gather here. In addition to the economic agglomeration, cultural agglomeration and talents agglomeration, agglomeration effect also exists in the knowledge management. Through this effect, we can take full use of the dissemination and sharing of knowledge to a large extent.

On top of that, Silicon Valley has become a synonym for high technology. Companies here are led by the microelectronics industry, which is the technological base of the electronic industry, and thus becoming the highest-tech technology. Every new invention here will influence the whole industry and make contributions to other projects and companies. When new products, new technique, new devices appear, we are the first to know. In other words, in such a environment, we have more resources, more specialized information, more technologies to get, and more experience and lessons to draw earlier.

Finally, knowledge, technology and experience are not all that we got here. Great competition also derives from the combined effect. Competition is vital for corporations to get competitive advantage. Gathering in one place, companies of same industry have the ruler of performance evaluation through comparison, and it also bring pressure to corporations. Good performers gain honor while poor performers feel pressure and even go broke. Constant comparison produced constant motivation. Competition is not a zero-sum game but a positive-sum game. We get information and incentives from opponents constantly and never stop improving management and seeking new opportunities. It turns out to be easier to enter the industry’s frontier.

References：
Randall MacLowry. (n.d.) American experience, Silicon Valley. Retrieved from
http://www.pbs.org/wgbh/americanexperience/features/introduction/silicon-introduction/