California Dreaming? Cross-Cluster Embeddedness and the Systematic Non-Emergence of the 'Next Silicon Valley'

The importance of social embeddedness in economic activity is now widely accepted. Embeddedness has been shown to be particularly significant in explaining the trajectory of regional development. Nonetheless, most studies of embeddeddness and its impacts have treated each locale as an independent unit. Following recent calls for the study of cross-cluster social interactions, we look at the consistent failure of numerous localities in the United States with high potential to emulate Silicon Valley and achieve sustained success in the ICT industry. The paper contends that the answer lies in high-technology clusters being part of a larger system. Therefore, we must include in our analysis of their social structure the influence of cross-cluster embeddedness of firms and entrepreneurs. These cross-clusters dynamics lead to self-reinforcing social fragmentation in the aspiring clusters and, in time, to the creation of an industrial system in the United States based on stable dominant and subordinate (feeder) clusters. The paper expands theories of industrial clusters, focusing on social capital, networks, and embeddedness arguments, to explain a world with one predominant cluster region. It utilizes a multimethod analysis of the ICT industry centered in Atlanta, Georgia, as an empirical example to elaborate and hone these theoretical arguments.

Innovation Agency Case Study: Canada's Industrial Research Assistance Program (NRC-IRAP)

Unpublished report on the design of Canada's Industrial Research Assistance Program (IRAP) - a public innovation agency - produced for the Inter-American Development Bank's Division of Competitiveness, Technology, and Innovation. Contributed to the IDB's report available here: https://publications.iadb.org/bitstream/handle/11319/8569/Agencias-latinoamericanas-de-fomento-de-la-innovacion-y-el-emprendimiento-caracteristicas-y-retos-futuros.PDFCanada’s Industrial Research Assistance Program (IRAP) is a longstanding program under the National Research Council; its primary mission is to increase research and development and technology commercialization by Canadian small and medium enterprises (SMEs). Although it has a relatively small number of instruments for intervening in the private sector to improve technological research and development, it has highly effective frontline agents (Industrial Technology Advisors - ITAs) that are able to deploy those instruments well. The ITAs discretion allows them to adapt flexibly to changing economic and technological conditions, even if the IRAP more broadly has not been more experimental or evolutionary. This case study of Canada’s IRAP is based on the analytical elements developed in the accompanying methodological document, “Innovation Agencies: The Road Ahead.” (Breznitz and Samford 2016).https://deepblue.lib.umich.edu/bitstream/2027.42/143810/1/Breznitz Samford IDB IRAP Report 2017.pdfDescription of Breznitz Samford IDB IRAP Report 2017.pdf : Main articl

Innovation in China: Fragmentation, Structured Uncertainty, and Technology Standards

This Article discusses the history of China’s attempts to develop indigenous technology standards. A case study is presented on China’s attempts to develop digital optical storage media standards, the failure of which we attribute to fragmentation of production and structured uncertainty in China’s economy. Despite the market failures of China’s domestic standards development efforts, we conclude by highlighting some of the appurtenant benefits they produce for Chinese manufacturers

Innovation Agencies: The Road Ahead

Unpublished report on the design of public innovation agencies produced for the Inter-American Development Bank's Division of Competitiveness, Technology, and Innovation. Contributed to the IDB's report available here: https://publications.iadb.org/bitstream/handle/11319/8569/Agencias-latinoamericanas-de-fomento-de-la-innovacion-y-el-emprendimiento-caracteristicas-y-retos-futuros.PDFMany Latin American countries have been aware of their stagnating rates of productivity. Most of the large countries in the region do have a national innovation agency whose goal it is to promote innovation, knowledge, and productivity growth. Several of the agencies even date back to the 1960s. The puzzle is that, in spite of the presence of these agencies, countries in the region continue to fall behind their global competitors in terms of investment, productivity, and innovation. Why is this the case? What do we know about how effective innovation agencies in other parts of the world work? How are the Latin American innovation agencies like or unlike their peers in more innovative economies? These are all questions that have not been systematically researched. To date, there is no broad comparative study of the regional IAs that compares LAC IAs to each other or to the group of globally prominent and IAs, which have effected transformation in their own economies. What follows is a general framework for documenting and comparing the goals, characteristics, and outcomes associated with existing agencies in Latin America and in wealthier countries where IAs have performed well.https://deepblue.lib.umich.edu/bitstream/2027.42/143809/1/Breznitz Samford IDB Report 2016.pdfDescription of Breznitz Samford IDB Report 2016.pdf : Main articl

Development strategies for high technology industries in a world of fragmented production : Israel, Ireland, and Taiwan

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Political Science, 2005.Includes bibliographical references (p. [318]-331).One of the most unexpected changes of the 1990s is that firms in a number of emerging economies not previously known for their high-technology industries have leapfrogged to the forefront in new Information Technologies (IT). Surprisingly, from the perspective of comparative political economy theories, the IT industries of these countries use different business models and have carved out different positions in the global IT production networks. Of these emerging economies, the Taiwanese, Israeli, and Irish have successfully nurtured the growth of their IT industries. This dissertation sets out to establish that emerging economies have more than one option for developing their high technology industries. Moreover, it advances a theoretical framework for analyzing how different choices lead to long-term consequences and to the development of successful and radically different industrial systems. Hence, this dissertation strives to give politics - the art and profession of creating alternatives and the social struggles of choosing between, and acting on, them - the importance that it seems to have lost in the social sciences. The research focuses on the role of the state in shaping the structure of the IT industry in Israel, Ireland, and Taiwan.(cont.) It argues that the developmental path of the IT industry is influenced by four critical decisions by the state. First, decisions about how to acquire the necessary R&D skills influence which organizations - public or private - play a leading role in innovation. Second, state decisions about financing significantly affect both the R&D resources available to the industry and the scope of R&D activity. Third, state efforts to develop local leading companies have long-term consequences for the industry's opportunity structure. Fourth, state decisions regarding foreign firms and investors within and outside national borders affect the resources and the information that the industry receives from its customers, as well as the diffusion and development of specific innovative capabilities. Of particular importance are state decisions that develop specific links between local and foreign companies, investors, and financial markets. Overall, the dissertation utilizes this framework to explain the divergent development of the IT industry in Taiwan, Israel, and Ireland.by Dan Breznitz.Ph.D

The role of venture capitalists in the formation of new technological trajectories: Evidence from the Cloud

We investigate the role of venture capitalists (VCs) in the creation of new technological ecosystems and in particular examine how VCs facilitate new ventures’ product development decisions to use new technological platforms. Focusing on the recent rapid rise of a new computing paradigm, cloud computing, we develop and test a set of hypotheses based on a 1999-2009 sample of start-up firms that offer enterprise software products. We find evidence of strong complementarity between VC financing and the introduction of new products offered over the cloud. Moreover, the complementarity effects are significantly stronger for firms backed by VCs that had rich experience in the IT industry and are significantly weaker for firms that had prior experience developing traditional client/server products

3 Diffusion of Academic R&D Capabilities as an Industrial Innovation Policy? – The Development of Israel’s IT Industry

2 The views expressed herein are the author’s responsibility and do not necessarily reflect those of the MIT Industrial Performance Center or th