Agglomeration and Growth: A Study of the Cambridge Hi-Tech Cluster

Abstract

This paper is an empirical study of the growth and change in the Cambridge high technology cluster. Cambridge shows the paradoxical co-existence of vastly smaller scale outcomes but many qualitative similarities to Silicon Valley. Our main questions from the empirical enquiry in this chapter are broad: First, how has the Cambridge hi-technology cluster changed and grown overtime? Secondly, we are interested in what sorts of microeconomic factors explain these bigger changes. With an understanding of these two questions we draw some implications of the Cambridge story for our understanding of what kinds of agglomeration economies and externalities were important to the growth of the Cambridge cluster. The failure of Cambridge to globalise to the same degree as Silicon Valley, we argue, accounts for the dissimilarities in the two experiences.

Keywords: hi-technology clusters, agglomeration economies,silicon valley