The Communal Roots of Entrepreneurial-Technological Growth? Social Fragmentation and the Economic Stagnation of Atlanta’s Technology Cluster

Abstract

Why do some entrepreneurial high-technology industrial clusters grow and prosper, while others stagnate? Even after several decades of research, we have yet to find a definitive answer. One of the main debates in the literature revolves around the importance of societal variables, such as the growth of a cohesive community, versus the importance of factor availability, such as the supply of highly educated labor. Employing a critical case study design utilizing a multi-method research strategy to analyze the technology industry in metropolitan Atlanta this paper shows that although the availability of certain factors might be necessary, it is not sufficient without the crystallization of a cohesive social structure. More specifically, we argue that unless a local high-technology industry develops rich multiple, locally centered social networks, which embed companies in the region, cluster development will stagnate. This is true even if the region is extremely rich in all the factors identified as growth-inducing in the literature.

Keywords: entrepreneurship, Industrial Clusters, High Technology, Regions, Economic Development, Public Policy

JEL Classification: R30, R38, R11, O30, O40, O18, L86, L63, L65, L50