Theory, Evidence and Implications
Edited by Phillip H. Phan, Sankaran Venkataraman and S. Ramakrishna Velamuri
Chapter 3: Institutional Transformation During the Emergence of New York’s Silicon Valley
3. Institutional transformation during the emergence of New York’s Silicon Alley Andaç T. Arıkan INTRODUCTION The importance of technology entrepreneurship in facilitating regional development is well known (Saxenian, 2000; Phan and Foo, 2004; Venkataraman, 2004). In fact many regional governments in the USA and across the globe aim to promote technology entrepreneurship through various policy initiatives, yet very few areas actually succeed in initiating entrepreneurship and even fewer regions turn into centers of large scale entrepreneurial activity such as Silicon Valley. In the face of such policy resistance (Sterman, 2001), an important question to ask is what is the process by which a region that lacks an entrepreneurial tradition initiates entrepreneurship and develops a favorable entrepreneurial infrastructure (Van de Ven, 1993). Recent entrepreneurship research under the title of ‘demand side perspective’ has put a heavy emphasis on the inﬂuence of environmental factors on triggering entrepreneurial activity (Thornton, 1999). In contrast to the ‘traits approach’ that views entrepreneurial personality characteristics as the primary determinant of entrepreneurial outcomes (Brockhaus and Horwitz, 1986; Gartner, 1988), the demand side perspective holds that region speciﬁc environmental factors constitute an objective opportunity structure which gives particular regions diﬀerential advantage over others in terms of generating entrepreneurship. Based on this premise, researchers have studied the environmental characteristics of regions such as Silicon Valley that have been successful in stimulating large scale entrepreneurship. The factors that create a favorable environment for entrepreneurship were found to range from the availability of resources (for example, venture...
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