Regional Advantage: Culture and Competition in Silicon Valley and Route 128 by Annalee Saxenian (Harvard University Press, Cambridge, 1994) xi + 226 pp., US$24.95, ISBN 0–674–75339–9

NOTES AND REFERENCES

1. Actually, that last part was last week but give me a little poetic license here.

2. A recent literature has come to view the acceptance of failure as a key ingredient to generating persistent innovation. See Michael Schrage, “Innovation and Applied Failure”, Harvard Business Review, Nov-Dec. 1989, p. 42.

3. Nathan Rosenberg has been one economist who has emphasised the importance of organisational diversity in fostering persistent innovation. He argues that a distinctive advantage of market economies is that they allow for economic experiments and, thus, can search for productive opportunities over a wider domain of activities. Such an observation sits well with Saxenian's arguments. See N. Rosenberg, “Economic Experiments” in Exploring the Black Box: Technology, Economics, and History, Cambridge University Press, Cambridge, 1994, pp. 87-108.

4. Alfred Chandler is one person who argues that larger, vertically integrated firms are the desired organisational form in some contexts. Indeed, in 1990, he criticised SV firms for neglecting such lessons: “Instead of making the long-term investments to create organisational capabilities and then continuing to reinvest, they remained small or sold out, often to the Japanese. Repeatedly, groups of engineers left their companies to start new ones. Too many companies --- both old and new --- ignored the logic of industrial growth. Those few that did not --- Texas Instruments, Motorola (both established well before World War II), and Intel --- remain significant players, America's major hope (with IBM) of staving off the Japanese challenge.” See A. D. Chandler, “The Enduring Logic of Industrial Success”, Harvard Business Review, Mar-April 1990, p. 130.

5. If the firms in Route 128 have not made such investments it is probably because the forces of agglomeration come from the availability if skilled labour and specialised intermediate inputs. A closer investigation of this is surely a potential avenue for future research.

6. For more of the role of “cultural beliefs” in economic growth see Avner Greif, “Cultural Beliefs and the Organisation of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies”, Journal of Political Economy, forthcoming, 1994.