Much technological innovation occurs within clusters, to the extent that the creation and enhancement of technological clusters are widely believed to warrant public support. However, an examination of the origins of technological clusters, going back to the late nineteenth century, suggests that efficient and effective public support is difficult to achieve directly: the emergence of the most successful clusters, including Silicon Valley, has owed little to public planning and resources and much to chance and circumstance, while in contrast many conscious public efforts in the U.S. and elsewhere have achieved disappointing results. The paper concludes with a survey of the kinds of public-policy support - generally indirect and focused on the science base - most likely to succeed.
JEL Codes: O31, R11, N70, O38, O51-52, H23
- technological innovation
- origins of clusters
- Silicon Valley
- endogenous technological change
- research subsidies