At Bloomberg, I express some pessimism about Marc Andreessen's idea of creating single-industry tech clusters via local deregulation:
Why does Silicon Valley exist? Why do software engineers go there to get a job, even though rents are high? Why do entrepreneurs go there to start companies, even though wages there are high? Why do so many big technologies and products come out of that one tiny region of the world?
These are the kind of questions that urban economists ask when they study so-called industrial clusters. But unfortunately, the quest for the secret of how to create the next Silicon Valley has so far met with frustration. We still don’t really know whether companies go where the talent goes, or talent goes where the companies are, or both. We don’t know if government can bring clusters to life by building infrastructure, or by luring big firms to the area, or by encouraging firms to form relationships, or by creating a cool youth culture...Read the whole thing here!