Overview Edit

A high tech cluster is a group of interrelated companies and institutions (including suppliers, service providers, universities, and trade associations, etc.) located in a specific area that cooperate as well as compete.[1] As such, clusters provide the opportunity for on-going innovation to meet new demands for products and processes generated by the dynamic relationships among the players. Diversity within the types and sizes of businesses contributes to a good entrepreneurial environment.[2] A varied, educated, and skilled workforce also contributes to the technological advancement in and around the cluster.

While it often takes long periods of time to establish regional clusters, with the attendant risks and uncertainties, several characteristics are common to entrepreneurial areas. These regions typically have a knowledge source, generally a university that can provide a supply of ideas and employees, and on-going R&D. Venture capital is available as is skilled labor. Clusters (or agglomerations) of similar entrepreneurial firms exist as do opportunities for generating new businesses through science parks or incubators. Good transportation and a high standard of living are also complementary. In addition, successful state and local efforts to develop an entrepreneurial environment generally exhibit sustained leadership in such endeavors, support for education and training, use of R&D resources, and public-private cooperation.[3]

Benefits Edit

Clusters are important not primarily because of production but because of the opportunities for knowledge spillovers.[4] "[I]nnovative activity is more likely to occur within close geographic proximity to the source of . . . knowledge, be it a university research laboratory, the research and development department of a corporation, or exposure to the knowledge embodied in a skilled worker."[5] Innovation tends to cluster around industries where knowledge plays an important role11 as evidenced by the biotechnology, computer, advanced materials, and telecommunications sectors, among others.

Commonalities Edit

Commonalities associated with successful programs designed to encourage entrepreneurship include on-going leadership, either by state or local officials or representatives of the private sector. Strategic studies that identify the strengths and weaknesses of the area, increase the visibility of the effort, expand awareness of the process, and develop support are often important. The critical role of education can not be ignored nor can the development of human resources through training.[6] Also present are research and development activities directed toward new products and processes. Promotion of entrepreneurship, often through incubator programs, aims at developing the critical mass necessary for innovative activity. Public-private cooperation is also necessary for developing a commitment by all involved parties, particularly when such efforts tend to require patience.[7]

References Edit

  1. Michael E. Porter, "Clusters and Competition: New Agendas for Companies, Governments, and Institutions," Harvard Bus. School, Div. of Research Working Paper, at 1 (Sept. 1997) (revised Mar. 25, 1998).
  2. Edward J. Malecki, "Entrepreneurs, Networks, and Economic Development: A Review of Recent Reserch," Advances in Entrepreneurship, Firm Emergence and Growth 3, 60 (1997).
  3. State Technology Development Strategies: The Role of High Tech Clusters, at Summary.
  4. David B. Audretsch & Maryann P. Feldman, "R&D Spillovers and the Geography of Innovation and Production," American Econ. Rev., June 1996, at 631.
  5. Id. at 638.
  6. "Promoting High-Technology Industry, Initiatives and Policies for State Governments" 242 (Jurgen Schmandt & Robert Wilson eds. 1987).
  7. Id. at 261.

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