Start-Up Difficulties in Early-Stage Peripheral Clusters: The Case of IT in an Emerging Economy

Abstract

This paper studies the link between firm–level predicaments in high–technology start–ups and collective, cluster–level dynamics in early–stage peripheral locations. We investigate, first, the manner in which high–technology start–ups in early stage peripheral clusters accumulate and utilize resources; second, ways in which managers in start–up businesses and public sector officials work around inadequacies in order to move forward clusters composed mostly of high–technology start–ups; and third, the influence of such experiences on the development of clusters. Empirical findings from three IT clusters in Vietnam reveal resource inadequacies, private sector actors’ inability to resolve such shortcomings, entrepreneurial passivity, risk aversion, and lack of confidence in governmental initiatives. These findings and the comparison with earlier studies about start–up difficulties in other high–technology peripheral locations form the basis for a theoretical framework of high–technology start–up difficulties in early–stage peripheral clusters.