Creating Silicon Valley in Europe

Abstract

AbstractThrough the 1990s and early 2000s, a strength of the United States economy has been its ability to foster large numbers of small innovative technology companies, a few of which have grown to dominate new industries, such as Microsoft, Genentech, or Google. US technology clusters such as Silicon Valley have become engines of innovation and wealth creation, and the envy of governments around the world. This book examines trajectories by which new technology industries emerge and become sustainable across different types of economies. Governments around the world have poured vast sums of money into policies designed to foster clusters of similar start-up firms in their economies. The book employs empirical studies of the biotechnology and software industries in the US and several European economies to examine the relative success of policies aimed at cultivating the “Silicon Valley Model” of organizing and financing companies in Europe. Research associated with the “varieties of capitalism” literature has argued that countries with liberal market orientations, such as the US and the UK, can more easily design policies to cultivate success in new technology industries compared to countries associated with organized economies, such as Germany and Sweden. The book's empirical findings support the view that national institutional factors strongly condition the success of new technology policies. However, the study also identifies important cases in which radically innovative new technology firms have thrived within organized economy. Through examining cases of both success and failure, this book helps identify constellations of market and governmental activities that can lead to the emergence of sustainable clusters of new technology firms across both organized and liberal market economies.