SIEPR Policy
paper No. 00-42
Agglomeration and Growth: A Study of the Cambridge Hi-Tech Cluster
Suma S. Athreye
June 2001
This chapter is an empirical study of the growth and change in the Cambridge high technology
cluster. Cambridge shows the paradoxical co-existence of vastly smaller scale outcomes but many
qualitative similarities to Silicon Valley. Our main questions from the empirical enquiry in this
chapter are broad: First, how has the Cambridge hi-technology cluster changed and grown
overtime? Secondly, we are interested in what sorts of microeconomic factors explain these bigger
changes. With an understanding of these two questions we draw some implications of the
Cambridge story for our understanding of what kinds of agglomeration economies and externalities
were important to the growth of the Cambridge cluster. The failure of Cambridge to globalise to
the same degree as Silicon Valley, we argue, accounts for the dissimilarities in the two experiences.
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