Cluster Theory: Geography Is Destiny

Geography is destiny, particularly when it comes to biomedical innovation.

The Kauffman Foundation and the Information Technology and Innovation Foundation have released The 2010 State New Economy Index, which tracks state performance on 26 indicators divided into five categories: knowledge jobs; globalization; economic dynamism; transformation to a digital economy; and technological innovation capacity. Most of the states have improved, with Massachussetts taking home the trophy.

Clusters are formal and informal geographically circumscribed networks that link participants with similar interests. Silicon Valley for IT, New York and London for finance, Hollywood for entertainment are examples. Bioclusters, linking inventors and researchers, service providers, industry representatives and public agencies, have erupted in every state in the US and most major industrialized countries. Their growth is driven by economic development, jobs and revenue for the regions that spawn them. If you are interested in bioentrepreneurship, follow Meyers Law: go where the innovation is. In most instances, that will be a cluster close to a major research university, populated with creatives and linked by an entrepreneurial ecosytem that provides money to early stage companies.

Harvard Business School Professor Michael Porter, one of the founders of cluster theory, defines a cluster as “a concentration of companies and industries in a geographic region which are interconnected by the markets they serve and the products they produce.” This nexus of acitivity is associated with high performance economies and regions. They are where the action is and that's where you should be if biomedical innovation is in your future.

If you want to act, go to Hollywood. If you want to hit it big in financial services, spend some time on Wall Street. If you want to learn biomedical innovation, pick a place with a proven track record of creating great companies and management alumni and hitch your wagon to a local star.