Factors Governing the Development of High Tech Industry Agglomerations: A Tale of Three Cities
High tech industries are thought to precipitate structural change in local economies through the creation of backward and forward linkages and new firm spinoffs. Case studies of high tech firms and products indicate interindustry linkage development is closely associated with product type and organizational structure of firms. Three product configurations, one-of-a-kind, customized and standardized, generate differing levels of linkage and spinoff potential. Firms producing customized products with highly variable input structures and established subcontracting relationships are more amenable to linkage and spinoff creation than firms producing one-of-a-kind or standardized products. The potential for linked industry development is further diluted because the spatial expansion path of high tech firms has been through the creation of ‘technical branch plants’ which are stand-alone profit centres. Moreover, technical branch plant support for industrial complex development is inversely related to the strength of the linkage to the parent headquarters location.
TitleFactors Governing the Development of High Tech Industry Agglomerations: A Tale of Three Cities