internet clusters analysis 2000 joint venture: silicon valley network master in engineering policy...

Internet Clusters Analysis 2000Joint Venture: Silicon Valley Network

Master in Engineering Policy and Management of Technology (2001)

Carlos Mora, Nelson Marques, Nuno Constantino

Agenda

• Definition• Context• Key Characteristics• Evolution • 2nd Generation Characteristics• Challenges• Conclusions

Definition• A cluster is a group of entities geographically

contained, where balanced relationships allow cooperation and growth, in a very different way form the traditional linear value chain

• A internet cluster is a special kind of cluster specifically aimed at the new economy

Context

• Internet economy grew to $524 billion• In 1999 supported 2.5 million jobs (US only)• Globalization is complete• Pace of growth is accelerating

Key Characteristics

• Talent

• Pillar companies

• Universities

• Capital

• Support Services

• Supportive Government

Programs

Evolution

• Cities, regions and countries are competing to attract internet clusters

• Actions are based on the secondary characteristics enunciated in the previous slide

• Within three years Europe will overtake US number of users

• Hong Kong cyber-port will accommodate 30 medium/large and 50 small companies

Evolution

• Cities, regions and countries are competing to attract internet clusters

• Actions are based on the secondary characteristics enunciated in the previous slide

• Within three years Europe will overtake US number of users

• Hong Kong cyber-port will accommodate 30 medium/large and 50 small companies

Core characteristics are becoming widely available

2nd Generation Characteristics• Proximity to partners

• Local presence in foreign markets

• Minimize costs of doing business

• Relocations due to Merger&Acquisitions

• Quality of life

Challenges

• Cost of contracting, training and maintaining employees

• Housing prices

• Traffic congestion worsens

• Digital divide

Conclusions

• Clusters are simultaneously horizontal and vertical connections between firms

• Horizontaly because it implements the “learning region” concept

• Verticaly because

it consists of the

“extended vertical

chain”