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58 Pekka Himanen and Manuel Castells(see figure 2.5). Therefore, although Silicon Valley is known as a businessdrivenmodel of the information society, the state has had a very significantrole in financing some of the key technological innovations.In this way, the spatial interaction between a specific raw material (knowledge),specific labor (highly skilled scientists and engineers), and specificcapital (defense funding first, then venture capital), concentrated in a givenarea, led to the formation of Silicon Valley as a milieu of innovation. But thelocation in this particular area and the formation of the milieu were a functionof the initiative of an institutional entrepreneur, Stanford University, whichplayed the role that public sector development agencies have played in othercountries. Thus, Stanford University and the Defense Department, as a sourceof funding and markets, show that non-profit and public sector institutions arealso essential in the United States, as in other countries, in inducing technologicalinnovation and economic growth.It is also important to note that Silicon Valley, as all production complexes,relies on a vast array of local supporting services, something that many imitatorsof the Silicon Valley model have not understood. As important as financialservices are business services, such as legal and marketing services. Infact, one of the most influential players in Silicon Valley is the law firmWilson, Sonsini, Goodrich, and Rosati, whose clients include, among others,Intel. Like all other service companies, law firms also go beyond legal assistancein intellectual property rights and high-tech deals: they are also businessadvisers who often establish the initial contacts between start-up entrepreneurs,venture capitalists, and partner companies. Equally important are themarketing services for making technology products into global brands. In the40353025201510501987198819891990199119921993199419951996199719981999FinlandUSFigure 2.5Share of public funding in private research and developmentprojects (OECD Main Science and Technology Indicators),1987–1999