A recent study provides one more argument against government officials who tout “industry clusters” as the Holy Grail of regional growth and innovation.
The formula for creating these clusters is always the same: Pick a hot industry, build a technology park next to a research university, provide incentives for businesses to relocate, add some venture capital and then watch the magic happen. But, as I have noted before, the magic never happens. Most of the top-down cluster-development projects in the United States and around the world have died a slow death in relative obscurity. Politicians who held the press conferences to claim credit for advancing science and technology are long gone. Management consultants have cashed in their big checks. Real estate barons have reaped fortunes, and taxpayers are left holding the bag.
Regional planners eager to replicate the job growth of areas such as Silicon Valley or North Carolina’s Research Triangle Park use them as examples of government-sponsored clusters that worked. While it’s true that World War II investments in defense-related research at Stanford planted the seeds for Silicon Valley’s semiconductor industry, that forest burned down long ago. The Valley has reinvented itself many times since then. Meanwhile, Research Triangle Park achieved its success decades ago but, in my opinion, has lost momentum in the Internet era.