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54 Pekka Himanen and Manuel CastellsIncarceration rate(per 100,000)3002502001501005001090.3601871170.349154960.3411950 1960 1970 1980 1990US Finland US Finland1130.3521381062930.37869Gini index0.400.350.300.250.20Source: UNDP (2001)Figure 2.4Social inequality and exclusion in the US and Finland,1950–1990in a Palo Alto garage in 1938. The company was started by two StanfordUniversity students, William Hewlett and David Packard, who were encouragedand supported with 1,062 dollars by their professor, Frederick Terman,later to become Dean of Engineering and Provost. To advance this kind ofentrepreneurship further, in 1951 Terman created the Stanford IndustrialPark where technology companies could interact with the university andwith each other. They paid an annual fee of 1 dollar for this prime real-estatelocation. They were carefully selected by a committee, which considered,above all other criteria, the potential of the company as a technological innovator.Terman also encouraged William Shockley, the inventor of the transistor, tostart his company Shockley Transistors in Palo Alto in 1956, recruiting a groupof talented engineers. However, seeing the potential of using silicon for integratingtransistors, eight young engineers decided to leave after a year andstart their own company, Fairchild Semiconductors, with venture capital organizedby Arthur Rock. Thus, Fairchild was the company that started the SiliconValley model of turning innovations into business with the help of venturecapital. It was also the company that developed the integrated circuit with theplanar manufacturing process and began the microelectronics revolution inSilicon Valley.Because of the option included in Fairchild’s venture capital agreement that