The Dynamics of Industrial Clustering

Why do firms in high technology industries cluster at particular locations? Do firms grow faster at such locations and are disproportionately more new firms created in clusters? The contributors to this volume establish that new firms in computing and biotechnology have been attracted to particular sites by the presence of opportunities not taken up by incumbent firms. These opportunities arise when the cluster is strong in a mix of industrial sectors and in its science base. By contrast, incumbent firms benefit from locating in clusters that are strong in their own industrial sector, but tend to miss out on opportunities that arise too far from their immediate sphere.

This book compares the clustering process in the UK and the US in both computing and biotechnology. There are surprisingly similar tendencies towards clustering in both industries, though different structures and scale of the industries contribute to slower growth rates in the UK. There are other conditionsco-operation, critical mass in R&D, networking across disciplinesthat are lacking in the UK, and these hinder cluster formation and growth.

Policy needs to focus on infrastructure in particular regions, building on existing resources and specialisms, and it needs to support those features of a cluster that attract new resources to a region.