Handbook of Research on Innovation and Clusters
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Handbook of Research on Innovation and Clusters

Cases and Policies

Edited by Charlie Karlsson

The role of innovations and clusters has increasingly dominated local and regional development policies in recent decades. This authoritative and accessible Handbook considers important aspects of high-tech clusters, analyses insightful cluster case studies, and provides a number of recommendations for cluster policies.
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Chapter 3: Entrepreneurial Dynamics and the Origin and Growth of High-Tech Clusters

Colin Mason


Colin Mason 1 Introduction This chapter develops the proposition that entrepreneurial activity has been the central mechanism in the emergence of high-tech clusters. It might be expected that new technologies would be exploited by incumbent firms which dominated the existing technology. However, this is not the case. Existing firms are too preoccupied with their existing businesses, and so underemphasize their significance, or are unwilling or unable to exploit them because it would involve cannibalizing or writing off much of their existing activities (Christensen, 1997; Kenney and von Burg, 1999). The essence of high-tech regions such as Silicon Valley and Route 128 ‘lies in the[ir] continuous ability to create firms’ (Kenney and Von Burg, 1999, 72). By exploiting emerging technologies that established firms either resist or fail to react to, this process of ‘entrepreneurial spawning’ results in an upgrading of the regional economy (Castilla et al., 2000). The genesis of most technology clusters can be traced to a few individuals in a region who left their existing organizations in order to start their own companies to commercialize technological advances that they had been exposed to in their employment. Once seeded, the cluster becomes part of a self-reinforcing cycle. The examples of the pioneering entrepreneurs prompt imitation, generating further spin-offs from the original ‘anchor’ organization(s) and from the first generation new companies, thereby fuelling the initial growth of the cluster. Since spin-offs generate innovations distinctive from those of their parents they provide a source of innovative diversity...

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