Entrepreneurship and Innovation in Second Tier Regions

Entrepreneurship and Innovation in Second Tier Regions

Heike Mayer

Second tier high-tech regions are taking a different path than their well-known counterparts such as Silicon Valley or Route 128 around Boston. They may lack many prerequisites of growth such as a world-class research university or high levels of venture capital funding. Often, however, they can successfully leverage anchor firms and entrepreneurial spinoffs. This book explores the evolution of these regions in the United States.

Chapter 3: Identifying Emerging High-Tech Regions

Heike Mayer

Subjects: business and management, entrepreneurship, economics and finance, economics of entrepreneurship, economics of innovation, regional economics, geography, economic geography, innovation and technology, economics of innovation, urban and regional studies, regional economics


‘No longer do Silicon Valley and Route 128 have the monopoly on innovation; there are other alternatives, and many cases equally satisfactory.’ Herbig and Golden (1993: 29) High-tech industries have a special allure among policymakers and economic development practitioners. The industries are typically associated with rapid employment growth and a high capacity for innovation. High-tech firms are viewed as having potential to spin-off new firms, leading to renewed entrepreneurial dynamics in a region. Many policymakers consider high-technology to be a more or less ‘clean’ industry without polluting smokestacks. Since the 1970s, high-tech industry has become a desirable target of urban and regional development efforts. In this chapter, I discuss the nature of high-tech industry sectors and their industrial organization. In addition, I explain three key drivers of high-tech growth: talent, innovation, and entrepreneurship. Defining the industry and its key drivers is important if we want to gain a nuanced understanding of how cities and regions benefit from the growth of high technology. I also present a typology of high-tech regions. While many analysts have ranked cities based on the size of their high-tech economy, I employ a substantively different approach. This approach focuses on the degree to which different metropolitan areas share similar industrial, innovation, human capital, and entrepreneurship dynamics. Simply ranking metropolitan areas by the number of high-tech jobs favours regions with a large high-tech economy such as Silicon Valley or Boston. It also favours regions that are merely large, and places where urbanization economies may lead to large...

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