The big questions in this month’s MIT Technology Review Business Report are why technology clusters arise and what the ingredients are to create one. Unhappily for regions that have spent billions attempting to become the next Silicon Valley, the answers to these questions are still in debate. “Clusters exist—it’s empirically proven,” Yasuyuki Motoyama, a senior scholar at the Kauffman Foundation, told me. “But that doesn’t mean governments can create one.”
What’s certain is that they are trying. The largest such effort we know of is the Skolkovo complex outside Moscow, where $2.5 billion is being invested in a university, a technology park, and a foundation. Another, in Waterloo, Ontario, aims at gaining a lead in a particular advanced technology, quantum computing. The price tag there: $650 million so far.
The problem for governments is that they often try to define where and when innovation will occur. Some attempt to pick and fund winning companies. Such efforts have rarely worked well, says Josh Lerner, a professor at Harvard Business School. Governments can play a role, he says, but they should limit themselves mostly to “setting the table”: create laws that don’t penalize failed entrepreneurs, reduce taxes, and spend heavily on R&D. Then get out of the way.
I think in general, things that are forced just don't work as well as things that just "happen". Whether it's technology clusters, music scenes, revolutions, fads or just having fun, they tend to reach higher levels for the participants when they're spontaneous rather than scripted.
Companies, like Apple, Microsoft, Ford, etc don't start out to change the world or industry, they're just doing something they enjoy or are interested in. No one knows where the next music scene like San Francisco in the 60s or Seattle in the 90s will develop but you can bet it will be a surprise to the music industry. Kids playing a pickup game tend to have more fun than when playing in an "organized" sport. A spontaneous party/event will generally be more fun than a highly organized event. It's just hard to script stuff and keep it fresh.
The one thing that does seems to matter is a lot of intelligent, educated young people doing things they're interested in without the interference of a lot of rules imposed by the old guard. So maybe instead of a government,.. creating laws that don’t penalize failed entrepreneurs, reducing taxes, and spending heavily on R&D. Governments should focus educating young people and keeping the old farts who are in power out of their way.
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