The relationship between high technology companies and educational institutions in northern Santa Clara County, California, a major center of technologically sophisticated industry, was studied. Attention was directed to the way that educational institutions in Silicon Valley are changing to meet the demands of a transforming technology. Over 100 interviews were conducted in 1981 with the officials from education, industry, and government, and documents were reviewed. It was found that public schools have been the least responsive and that elite institutions of higher education, especially Stanford University, have the most responsive to the demands of the high technology economy in Santa Clara Valley. Community colleges and four-year universities are making efforts to develop or expand programs congruent with the needs of science-based local industry. These institutions are struggling to find the staffing and resources needed to establish and maintain the programs. Industry managers who were interviewed generally did not believe that an infusion of funds was necessary to upgrade and redirect the public school curricula. Executives were more willing to donate funds, personnel, and equipment to community colleges and universities because students were closer in age to starting employment and because funds could be easily targeted to specific programs. Rapidly developing industries like electronics have special characteristics that create strain for industry-education relations. Undergraduate student enrollments in engineering and computer science are growing in Santa Clara Valley, but the current output of students from undergraduate and graduate programs is not keeping pace with the demands of rapidly growing industry. (SW)