Source: http://www.wired.com/2015/05/inside-ilm/

NO ONE WANTED Star Wars when George Lucas started shopping it to studios in the mid-1970s. It was the era of Taxi Driver and Network and Serpico; Hollywood was hot for authenticity and edgy drama, not popcorn space epics. But that was only part of the problem.

As the young director had conceived it, Star Wars was a film that literally couldn’t be made; the technology required to bring the movie’s universe to visual life simply didn’t exist. Eventually 20th Century Fox gave Lucas $25,000 to finish his screenplay—and then, after he garnered a Best Picture Oscar nomination for American Graffiti, green-lit the production of Adventures of Luke Starkiller, as Taken From the Journal of the Whills, Saga I: The Star Wars. However, the studio no longer had a special effects department, so Lucas was on his own. He would adapt, and handily: He not only helped invent a new generation of special effects but launched a legendary company that would change the course of the movie business.

Industrial Light & Magic was born in a sweltering warehouse behind the Van Nuys airport in the summer of 1975. Its first employees were recent college graduates (and dropouts) with rich imaginations and nimble fingers. They were tasked with building Star Wars’ creatures, spaceships, circuit boards, and cameras. It didn’t go smoothly or even on schedule, but the masterful work of ILM’s fledgling artists, technicians, and engineers transported audiences into galaxies far, far away.

As it turns 40 this year, ILM can claim to have played a defining role making effects for 317 movies. But that’s only part of the story: Pixar began, essentially, as an ILM internal investigation. Photoshop was invented, in part, by an ILM employee tinkering with programming in his time away from work. Billions of lines of code have been formulated there. Along the way ILM has put tentacles into pirate beards, turned a man into mercury, and dominated box office charts with computer-generated dinosaurs and superheroes. What defines ILM, however, isn’t a signature look, feel, or tone—those change project by project. Rather, it’s the indefatigable spirit of innovation that each of the 43 subjects interviewed for this oral history mentioned time and again. It is the Force that sustains the place.