The Dominant Cybersecurity Industry Clusters: Evolution and Sustainment

Industry & innovation. 2022

Posted: 3 Jan 2023

See all articles by Erran Carmel

Erran Carmel

American University - Kogod School of Business

Edward M. Roche

Columbia University

Date Written: December 24, 2022

Abstract

Three mega-clusters dominate the cybersecurity industry: the San Francisco Bay Area, the Washington D.C. area and Israel. Together they are home to about half the influential cybersecurity firms; they have remained dominant since industry take-off in the 1990s. How have they remained dominant? We answer this question by synthesizing firm-level data, case studies, and interviews, compiling an extensive history of their evolution; then using a Geographic Information System to map these clusters. Applying the Menzel and Fornahl cluster lifecycle model, we find these clusters advanced into the Growth (2nd) stage but have not reached an equilibrium state. The model points to heterogeneity as key to avoiding cluster weakening through lock-in. Three vectors of heterogeneity explain how these clusters remain dominant: The absence of a de facto standard design, spatial expansion, and the ever-increasing cyberthreat landscape. Additionally, powerful anchor institutions are present in two of the three clusters.

Keywords: Clusters, heterogeneity, anchor, threat landscape, regional comparison

JEL Classification: O18, 032, R11, M13, L86

Suggested Citation

Carmel, Erran and Roche, Edward M., The Dominant Cybersecurity Industry Clusters: Evolution and Sustainment (December 24, 2022). Industry & innovation. 2022, Available at SSRN: https://ssrn.com/abstract=4311424

Erran Carmel (Contact Author)

American University - Kogod School of Business ( email )

4400 Massachusetts Avenue NW
Washington, DC 20816-8044
United States

Edward M. Roche

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States

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