To date, the literature on the economic geography of the U.S. computer industry has been focused on two main regions: Route 128 on the East Coast and Silicon Valley in the West. The Route 128 industry flourished for two decades from the mid-1950s before the center of action moved to Silicon Valley in the 1970s, where it thrives today. This important book by Tom Misa locates a third region of early computer development, in Minnesota, mostly centered on the twin cities of Minneapolis-St. Paul. [End Page 296]
The University of Minnesota in Minneapolis was a vital source of science and engineering manpower. Misa is director of the Charles Babbage Institute for the History of Information Processing at the university, and its foundation there in 1979 was connected to the then-flourishing local computer industry. He focuses on the major manufacturers Univac, CDC, and Honeywell, all located in the twin cities, and IBM Rochester, about eighty miles south. Each receives a full chapter in the book, and the narrative also brings in smaller firms in the industrial ecosystem.
The first computer firm in the region was Engineering Research Associates (ERA) founded in St. Paul in 1946, a spin-off from the U.S. Navy’s cryptographic operations. Benefiting initially from defense contracts, ERA developed expertise in magnetic storage technology and produced scientific computers. In 1952 the firm was acquired by the office-machine giant Remington Rand which had already entered the computer race by acquiring the Eckert-Mauchly Computer Corporation of Philadelphia two years earlier. Remington Rand’s computer operation traded as Univac, and the machines built in St. Paul were the most powerful the firm produced.
In 1957 William Norris, an ERA founder somewhat stifled by the Remington Rand acquisition, founded the Control Data Corporation in Minneapolis. The company produced conventional mainframe computers and supplied disk stores to other firms. Magnetic storage technology was becoming a regional specialty, and (apart from IBM) CDC was the biggest producer of disk stores. In the mid-1960s, rather than competing head-on with the now-dominant IBM, CDC decided to specialize in high-performance computers in which IBM was relatively weak; it quickly dominated the supercomputer niche.
Honeywell—an established industrial electronics manufacturer—also saw computers as a natural market for it to enter. Its first mainframes met with only modest success, but in response to IBM’s dominance, it invented the strategy of designing for software compatibility. This strategy was very successful—Honeywell’s model 200 computer could run the same software as IBM’s top-selling 1401, but sold for much less.
IBM opened a plant in Rochester in 1958, initially manufacturing traditional accounting machines. Later IBM Rochester designed and manufactured the company’s mid-range computers, and “if IBM was the largest computer company in the world, IBM Rochester was the second largest” (p. 12).
Minnesota was a major region for computer production for twenty years, but when mainframes were challenged, first by minicomputers and then personal computers, its fortunes waned. CDC—having lost its star designer Seymour Cray, who set up shop in Wisconsin in 1972—tried but failed to switch into computer services. Honeywell survived into the 1980s but left the business as the market shifted. Univac merged with Burroughs in 1988 to form Unisys, and the new firm increasingly moved from hardware manufacture to computer services. Similarly, IBM switched from hardware to software and services and Rochester’s manufacturing facility was cut back. [End Page 297]
The last part of Misa’s book describes the legacy of the once-thriving Minnesota computer industry. Although the industry employed 68,000 at its peak in 1989, it was never the mainspring of the economy—its decline was nothing compared to the collapse of the auto industry in Detroit. What was left was primarily human capital and much of it found new employment—for example, Minnesota became a world center for medical electronics, and it fostered many second-tier computer software and service firms.
This richly detailed book...