Stanford likely facilitated much of the city’s economic circular-cumulative causation of the later 20th century. Because this cumulative industrial growth was not limited to one particular type of industry, San Francisco and its surrounding metropolitan area kept growing even when national demands shifted in the post-industrial age. According to Hartshorn, research institutes at Stanford University were heavily involved in weaponry research-connections that paved the way for the high technology research and development that gives the Silicon Valley its current reputation. While these military industries brought great economic activity to the city in the 40s, they also helped fuel one of the America’s greatest economic regions of the late 20th and early 21st centuries. The port and active military posts made the city an ideal location for wartime manufacturing, specifically shipbuilding and defense production. Circular-cumulative causation in San Franciscan history is again clearly demonstrated beginning with World War II. Today, we still see effects of that time period in the banking and financial sector-now one of San Francisco’s largest economic trades. The demand for lodging, restaurants, and entertainment venues particularly impacted the lumber, cattle, and banking industries.

In Historic San Francisco: A Concise History and Guide, Rand Richards says this “caused a ripple effect that led to the birth and rapid growth of many industries designed to service the miners and their needs,”.

First, the Gold Rush brought a wealth of capital to the city-even if the gold was not physically in the city bounds. In the case of San Francisco, a couple key points demonstrate circular-cumulative economic patterns that promoted regional interaction. However, as Truman Hartshorn points out in his chapter “City Development: Theory and Practice,” high technology has reinvented industrial clusters, and therefore circular-cumulative processes have now taken on new contexts. Allan Pred introduced this theory, mainly discussing it in terms of the manufacturing industries that dominated the greatest American cities of the late 19th and early 20th centuries. Typically, the cities that have been able to sustain these cyclical industry growth patterns have fared better within their regions, and have therefore increased their regional interaction. Circular-cumulative causation theory states that a cyclical pattern of economic multipliers drives growth in an area: increased demand for goods and services brings new industry, which brings new families and new demands, and ultimately more new industry.

Historic San Francisco by Rand Richards