Ever since Silicon Valley emerged as a leading high-technology region a half-century ago, other cities, states, and nations have sought to duplicate its economic success. This valuable new collection addresses the question of how and why new high-tech clusters develop, bringing together thoughtful case studies of some prominent non-U.S. high-tech clusters with suggestive statistical analyses of public and private investments on U.S. regional markets. Leaving behind the irrational exuberance that marked many discussions of the subject during the Internet boom of the late 1990s, Building High-Tech Clusters reminds us that there is no magic formula for high-tech success and demonstrates that, in the words of the editors, “old-economy factors are crucial for new economy outcomes” (p. 357).

Rather than comparing nascent high-tech clusters with the fully grown Silicon Valley of today, the volume instead begins with a more historically grounded and dynamic approach, contrasting the Silicon Valley of the 1950s and 1960s with the newer high-tech clusters elsewhere in the world. As Silicon Valley pioneer Gordon Moore and co-author Kevin Davis argue in the first essay in the collection, this moment witnessed the creation of “a new and unique growth trajectory” in the area that, contrary to other historical accounts, had little to do with existing industries and institutions (p. 15). The chapter provides an important first-person reminder that Silicon Valley was not built in a day, but was the result of a long and incremental process of firm-building, managerial expertise, hard work, and good timing.

The following five chapters present six international comparative cases, ranging from Catherine de Fontenay and Erran Carmel's analysis of the software and Internet industries of Israel's “Silicon Wadi,” to AnnaLee Saxenian's discussion of the PC component-makers of Taiwan and John E. Richards's examination of the wireless telecom firms of Norway and Finland. The cases demonstrate the vast scope of industrial types and labor classes labeled “high-tech” in the postindustrial global economy, a level of variation that makes direct comparison questionable at times. Yet, taken together, the cases clearly indicate that success depends on a region's ability to fill a market niche not yet occupied by U.S. high-tech companies, or to complement the activities of existing U.S. companies by providing a service or product that such companies—for reasons of space constraints or materials and labor costs—cannot provide themselves. When regions attempt to create an agglomeration of small white-collar firms providing products and services similar to those found in Silicon Valley, such as the example of Cambridge described by Suma Athreye in the book's fifth chapter, they have a difficult time maintaining a distinct and localized market niche.

The case studies provide important insights about firm structure and network development, although they left this reviewer with some lingering questions about the degree to which the political institutions of each country under study affected cluster formation and market outcomes. although the authors acknowledge the effect of state-provided educational infrastructure and public subsidies, the more indirect drivers of high-tech development—trade policy, immigration policy, tax burdens, public services, political stability—receive less attention in the chapters and are left to the editors to address in their concluding essay. One also wishes that India (a case discussed in tandem with Ireland in a thoughtful but sometimes unwieldy chapter by Ashish Arora, Alfonso Gambardella, and Salvatore Torrisi) had merited a chapter of its own, given its growing importance in global high-tech labor markets, research, and production.

The following two chapters turn their attention back to the United States and provide some long-overdue statistical assessments of the effects of public and private investments on the geography of its domestic high-tech economy. Scott Wallsten's county-level study examines the two most common policy interventions used to spur high-tech activity: state-sponsored science parks and public venture-capital programs (in this case, the U.S. government's Small Business Innovation Research Program, or SBIR). Wallsten finds strong indications that the strategies have little effect on high-tech cluster growth, noting correctly that science parks usually emerge as an economic-development solution in areas already suffering from slow growth, and that the modest size of public venture capital pales in comparison to that provided by private markets. Michael Horvath's analysis of venture capital investment over the late 1990s vividly demonstrates the concentration of this capital—11 U.S. regions captured 80 percent of venture capital investment in 2000—and underscores the overwhelming dominance of Silicon Valley in this critical determinant of high-tech growth.

This is a timely and engaging collection of interest to historians of both the “old economy” and the new. One regrets that the high cover price may limit its nonscholarly audience and its use in the classroom, as the research in this volume has important implications for business leaders, policy makers, and students of the history of business and of technology.