physical and social beings.” The best position is to be locally grounded but globally connected.

Clusters Reflect the Qualities of the Place

In this light, it is logical that cluster formation reflects the local qualities of the place where it forms. And it follows that it is seldom possible to imitate a cluster formed elsewhere. In the words of Robert Metcalfe, a pioneer of the Internet: “Silicon Valley is probably the only place on earth not trying to copy Silicon Valley.”1 How, then, do clusters come into existence? That is, how do regions change from being inert—with little innovation, little entrepreneurship, slow economic growth—to being active places? She said that a central finding of scholars who study clusters is that they are not “economic development sausage machines,” where the right ingredients added at one end produce the desired product at the other. This logic leads to a persistent creation myth that calls for lining up a research university, some venture capital, and some entrepreneurs, and then “turn a crank” to produce a cluster with good economic growth.

Studies of famous clusters revealed no evidence of a single creation formula; on the contrary, they suggest the opposite. Hollywood, California, for example, is such a successful cluster of film industry activities that the name refers to both the place and the industry. This success, according to a study by Allen Scott of the University of California, Los Angeles, drew on a unique blend of causes. The movie business, he showed, depends on its own form of clustering and a coincidence of new ways of organizing the film industry.2 Similarly, Silicon Valley had its own particular characteristics as a cluster region that far transcended the presence of major universities, entrepreneurs, and venture capital firms. The task of creating a cluster by conscious intent is further complicated by the fact that many appear to be the products of historical accidents or serendipity. She concluded that the consensus in the literature is that social processes are the most important determinants of cluster development.

These social processes, more than location or physical attributes, combine with or produce a vision of some new way of doing something.


1Robert Metcalfe, an early pioneer in developing the Internet, has also been an entrepreneur, publisher, and columnist, and is currently a venture capitalist with Polaris Venture Partners in Waltham, Massachusetts.

2Allen J. Scott, On Hollywood: The Place, the Industry, Princeton, NJ: Princeton University Press, 2004. Scott attributes much of Hollywood’s success to its physical density and the proximity of many specialized but complementary skills. This clustering is essential, he writes, because “the relations between firms cannot be planned over extended periods of time so that useful inter-firm contacts need to be constantly programmed and reprogrammed.”

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